Spotlight on Dublin
AS AN OPPORTUNITY MARKET FOR SERVICED APARTMENTS, Dublin ranks second in Europe only to Stockholm, according to research undertaken by Savills. “That is largely driven by supply constraints and also what’s driving demand there, which is pretty strong,” says commercial research director for Savills, Marie Hickey. “For Dublin it was 0.08 units per 1,000 overseas travellers.” According to Savills, annual overseas visitor numbers were up 13.7 per cent in 2015 over 2014 but signs of investment are still relatively small, with around 273 units in the pipeline to the end of 2018. “There are not many players in the market in Dublin. We are the largest with just under 200 keys in three buildings,” says Staycity CEO Tom Walsh. “Construction is about to start on another with over 200 keys and we are reasonably advanced on three or four other deals, so we are intending to increase our footprint dramatically; otherwise, there are no other serviced apartment buildings under construction and a limited number in the pipeline and planning stages.
“The city needs more hotels and serviced apartments because
there was effectively a moratorium on developing anything for ten years, as there was no money,” he says. Dublin-based serviced apartment company Your Home from Home increased its portfolio by 12 units to 96 in the last year but, says general manager Donal McGing, “demand is exceptionally high and at the moment we can’t find suitable properties for expansion next year. However, there are around 300 apartments going up in Silicon Docks, where Google, Facebook and Twitter have headquarters, and developments like this will help alleviate the problem.”
“The sector is dynamic and it has become apparent that serviced apartments have a resilient business model”
managing director of Silverdoor and Citybase, Marcus Angell. And because Citybase and Silverdoor had the same business model – pure agency – integration would be relatively straightforward. Silverdoor originally targeted the corporate market and has built a strong management service team, while Citybase targeted the leisure sector investing in building technology. “Citybase needed much stronger
account management and in London we needed a stronger technology focus to drive our business,” says Angell. “One of the difficulties Silverdoor has had over the years is competing with much smaller, more agile agencies, with the ability to provide technology solutions. Now that is part of our suite of offerings.” Citybase’s online serviced apartment network, Orbital Partnership, will be tweaked and relaunched. It will still be free and will give apartment operators that don’t want agency services an outlet for enquiries where they don’t have property.
HOT PROPERTY
The serviced apartment sector is attracting the interest of hotel groups, including Bespoke and Yotel. “We are the Best Western of the serviced apartments world and provide a range of services such as marketing, procurement and
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reservations,” says CEO of Bespoke Hotels, Nick Turner.
“There are hundreds of serviced apartment operators and there is a big opportunity to consolidate. The majority of our pipeline is conversions from existing operators that tried it and realised it is hard for them. Most of that inventory will be Bespoke Residences,” he says and describes this as a soft brand with a minimum standard but “not prescriptive”. Its first incarnations are two properties in Dubai.
Bespoke’s relationship with boutique operator Staying Cool does not fall into this category, and Bespoke chairman Robin Sheppard has been on Staying Cool’s steering group for a while. “About 18 months ago, he offered to help us roll out the brand,” says director of Staying Cool, Paul Taylor, who set up the company with Tracey Stephenson. Through a wider relationship with Bespoke, Staying Cool was able to access more properties and third-party funding, and Bespoke took a minor stake in the company, which Staying Cool is using as development capital. Sheppard has also joined the board. Staying Cool has bid for developments in Manchester and elsewhere, plus a new aparthotel and spa in Birmingham. “In the next three years, we aim to open two schemes, which will
bring us to 140-150 apartments,” says Taylor. Yotel’s foray into serviced apartments is inspired by the flexibility of the model. “We are interested in applying the ethos that we have in the hotel business – convenience, time, affordable luxury – to serviced apartments,” says Yotel chief development officer Jason Brown. He anticipates that the corporate/leisure ratio will be 50/50, and sees a gap in the market for a budget offering but adds that “descriptors” are increasingly difficult to apply to brands such as Yotel and Citizen M. He hopes Yotel’s take will produce “something unexpected, almost like a luxury yacht experience”. The serviced apartment sector continues to evolve. The ‘service’ aspect is getting broader, as players forge alliances with suppliers outside the genre, and the ever- more compelling aparthotel model is not only gaining traction in the segment but rattling hotel cages, too.
In short, the sector’s dynamism continues apace and, as became apparent in the global economic crisis, serviced apartments have a resilient business model that appeals when the chips are down. So while this year may not appear to be as financially secure as the last, the future for serviced apartments looks bright.
BBT September/October 2016 107
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