High-profile luxury hotels used to be exclusive affairs, but with mixed-use developments rising, hospitality now plays a more ‘open’ role in urban development
In the past, high-profile luxury hotels were often standalone affairs. Although the finest of these offered guests unimpeded access to the cultural and financial nerve centres of their respective cities, they traditionally remained separate entities.
Recent years, however, have seen these projects play a rather different role in urban planning. As investors seek to maximise their return through more efficient land usage, many developers across Asia-Pacific are incorporating large-scale hospitality properties into vertically integrated mixed-use developments that involve residential and often retail components.
From a strategic standpoint, the move towards mixed-use developments is fairly logical, albeit not without a distinct set of challenges. In the current residential property market frenzy, developers are often finding it necessary to offer potential investors a little something extra to stand out from the glut of competitors.
A well-executed mixed-use development essentially creates its own internal ecosystem, in which each of the various components benefits from its proximity to the others. An upscale shopping centre is more likely to prosper if placed within easy walking distance of luxury condominiums and hotel rooms designed to harbour affluent clientele.
A mixed-use property that combines both resort and residential elements provides investors with the best of both worlds. It provides optimal personal lifestyle end-usage with good investment returns
Similarly, restaurants will flourish when located next to a prestigious office block. Businesses profit from the relationship, just as tenants and hotel guests enjoy the additional access to top-flight amenities and dining facilities. The overall combination of factors helps to generate buzz and adds to the overall prestige of the property.
“A mixed-use property that combines both resort and residential elements provides investors with the best of both worlds,” says Aekkachai Na Ranong, vice president of international affairs and development at Apex Development Public Co., Ltd., which was responsible for the The Residences at Sheraton Phuket Grand Bay. “It provides optimal personal lifestyle end-usage with good investment returns.”
A world-renowned hotel such as a Four Seasons, Mandarin Oriental or Raffles adds an undeniable cachet and air of sophistication to its surroundings. That stems from the fact that all of these are internationally recognised brands that have built up a certain level of credibility over the course of decades. Their reputation carries considerable monetary value and is enticing to investors all over the region. The presence of one of these hotels elevates all of the other elements of a mixed-use development and enhances the overall value of the real estate.
As a result, hotels often form the backbone of these sorts of projects. Finding a way to seamlessly integrate a hotel into the framework of a larger development can be tricky, as it involves working with global representatives from the brand to ensure that it upholds that hotel name’s standards of service and quality. When executed correctly, however, a hotel can be a powerful asset in securing additional investors and interest. One particularly successful example of this sort of integration is The Residences at The St. Regis Jakarta.
“The brand positioning elevates the residences,” points out Kent Rick Masbrata, who handles sales and marketing at the Rajawali Property Group. The presence of both a St. Regis and a sizeable office block add to the profile of the property. “The exclusivity, services, and comfort factor all combine to enhance the overall experience,” he says.
Integrated mixed-use development projects are hardly unique to Asia-Pacific. Investors around the globe are already wise to their myriad benefits. For example, this year New York City will fully unveil Hudson Yards, the largest private real estate development in the United States of America. The scope of the project is staggering and includes more than 1.6 million square metres of residential and commercial space. When completed, the development will include more than 4,000 high-end residences and offices for some of the most prestigious companies in Manhattan.
Hudson Yards is a textbook study in how such developments prove advantageous for investors. Every single aspect of the project has been engineered from ground up to attract a specific, highly desirable clientele. For instance, the carefully curated mix of eateries in the USD20-billion development includes entries by all-star chefs and restaurateurs such as David Chang, Thomas Keller, and José Andrés. The 100-plus shops focus on big-name international luxury brands, while the starting rental for a one-bedroom apartment hovers around USD5,300 a month. The subtle air of opulence from each element complements the whole. It also gives it a lasting appeal that makes it especially tempting to investors, since spaces such as these are all but guaranteed to increase in value with time.
Although the details vary from property to property, this particular strategy has been employed with considerable success throughout Asia-Pacific. Part of why mixed-use developments are so highly prized in this part of the world is that many prime Asian destinations are challenging to navigate. Jakarta, for example, lacks the transportation infrastructure necessary for a capital city of its population and size. A journey across town can easily entail hours spent snared in a traffic jam. Consequently, residents are even more inclined to pay extra to stay at a prestigious address that includes shopping, dining, fitness and residential facilities, all in one convenient package.
While mixed-use developments often represent a considerable initial investment and a great deal of planning, the long-term rewards have the potential to be tremendous. The following are some of the leading examples throughout the region. Each incorporates various elements in ways that make sense with its individual surroundings for some truly spectacular results.
The Residences at Sheraton Cebu Mactan Resort
Set on a prime piece of beachfront real estate at the edge of a peninsula, this mixed-use development will combine a stylish 250-key resort with an impressive 154 residential units. The former component is slated to open in 2019, while the latter should be fully operational by 2020. Although the residential units still require those final flourishes, the early details are already more than sufficient to lure potential investors. The pet-friendly complex is within easy access of the airport, making it ideal for families seeking a beach getaway. Equally critical is the long list of available resort-style amenities, which range from personal fitness trainers to in-residence catering and housekeeping.
Twin Lakes Hotel
This sprawling 1,200-hectare project operated by Global One Hotels Group features sweeping views of Taal Lake. At the core of the development lies a 126-room, eight-storey hotel, which will feature a grand ballroom capable of hosting 500 guests. Combined with the resort’s spa, all-day dining, and Instagram-friendly infinity pool, the space is ideally suited to lavish weddings and large events. Adding to the property’s panache is one of the only vineyards in the Philippines. The three residential condominiums entitled The Manor at Twin Lakes, The Belvedere, and The Vineyard already promise to provide suitably elegant accommodations, while an additional two residential villages, Domaine Le Jardin and Lucerne, offer additional possible lots for investors.
Le Méridien Cam Ranh Bay Resort & Spa
With a bold interior design courtesy of award-winning Vietnamese firm Kaze Interior Studio, this impressive project is poised to be a game-changer in its city. Other internationally known hotel brands have been muscling into the area for the past few years, making this spot one to watch for investors. Upon completion, the Le Méridien Cam Ranh Bay Resort & Spa will feature a thoroughly contemporary design to match its eye-catching oceanside location.
Colombo City Centre
After years of civil unrest, Sri Lanka has emerged as one of Asia’s fastest growing and most dynamic destinations. Until recently, Colombo lacked the upscale infrastructure or flow of capital needed to support a mixed-use luxury development. Colombo City Centre, a joint effort by the Next Story Group and the Adans Group, is a clear sign that the times are indeed changing. The Mall at Colombo City Centre will be the country’s largest shopping destination and one of the only places in Sri Lanka to offer premium brands such as Apple, Fossil, Aldo, and more. Shoppers and residents at Colombo City Centre will be able to enjoy everything from upscale Chinese dishes to Italian gelato while perusing the wares. A hotel catering to both business and leisure travellers will rest at the heart of the development, as well as 192 elegantly appointed residences, many with views of Beira Lake.
The Residences at Sheraton Phuket Grand Bay
Thanks to its easily accessible international airport, superb dining scene, colourful history, and legendary nightlife, the island of Phuket has long been one of the safest property investments in Thailand. These luxe accommodations represent the first Sheraton branded residences in the country and boast a suitably striking design. The 106 fully furnished units range from one-bedroom suites to freestanding, two-storey, two-bedroom pool villas. While parts of Phuket are notoriously chaotic, Po Bay affords residents all the oceanic serenity one would hope for on a tropical island. As a bonus, the development is a mere 20-minute drive from Phuket International Airport and a 10-minute drive from Po Bay Grand Marina, making it perfect for nautically inclined types hoping to park their yachts nearby.
The Residences at The St Regis Jakarta
The Indonesian capital is booming, with five-star hotels crowding into town in order to accommodate the steadily rising levels of business. All that bustle makes Jakarta both intriguing and exhausting, which is why this towering edifice was specially designed to help residents get away from it all. The Sky Residences offer panoramic views of the CBD, while the ground-level sculpture garden creates a verdant oasis. Developer Rajawali Property Group spared no expense with the project, and all that extra investment shows. Thoughtful touches such as the Wine Lounge and Cigar Lounge make it easy for guests and residents to mingle. A state-of-the-art fitness studio and pool make it a breeze to stay in shape.
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