Corporate News

By Krista A. M. Montealegre, Senior Reporter

Branding partnerships to boost real estate projects

Posted on October 29, 2015

MORE property developers are seen partnering with international hotel operators for hotel-branded type of residential projects in a bid to generate more value for their real estate developments amid rising land prices, Asia-based hospitality consulting group C9 Hotelworks said.

HOLIDAY Express Siam in Bangkok Thailand is a 300-room hotel located in the district. --
C9 Managing Director Bill Barnett said in an interview yesterday there are over 11,000 hotel residences worth P158 billion for sale in the Philippines with Metro Manila and Boracay as the top two locations for these types of developments.

“We’re seeing this market move forward,” Mr. Barnett said.

“After the global financial crisis, we’ve seen in every Asian country that developers want to mitigate the risk because you have expensive land so they develop residences and pair it together with a hotel. The project generates stronger capital returns from residential alongside recurring income stream from the hotel,” he said.

One key growth driver of this segment is the increasing number of mixed-use developments as a result of escalating land prices, Mr. Barnett said.

Aside from residential, property firms add in commercial, sporting and tourism attractions to widen its lifestyle offerings, he noted.

Partnership with hotel brands boost prices for property sales, which in market-wide terms translated to an upside of 26% in resort locations and 14% for urban products compared to independent projects, he said.

Four more hotel brand alliances are in the pipeline in the short term, Mr. Barnett said, the latest of which was AppleOne Properties, Inc. signing with global Starwood group for a new Sheraton in Cebu.

The turning point for the resurgence of this sector in the last three years was the Raffles Residences, Mr. Barnett said, citing its strong sales pace and high pricing points.

Now, growth is shifting to the mid-scale market such as the Citadines tie up at CDC Millennium Ortigas and the investment-driven yields from Hotel 101 in Pasay City and Lancaster the Atrium in Mandaluyong City, the official noted.

With more developers embracing projects that contain both traditional accommodation elements and real estate components, C9 sees a large push into resort properties will occur in the next two to three years in the sector.

“Asia and the Philippine property cycles have typically seen these types of investment-driven projects at the top markets in the mid-1990s and again in the mid millennium, hence, history is recreating itself, yet this time, at a considerably higher scale,” Mr. Barnett said.