Condo-Hotels - New Hotel phenomenon set to sweep the Philippines
Below is a MRR and PLR article in category Finance -> subcategory Real Estate.
Condo-Hotels: A New Trend Set to Transform the Philippine Hospitality Scene
Introduction
Condo-hotels are emerging as a new investment trend in the Philippine hotel industry. Already popular in the U.S. and Europe, this innovative concept is poised to become a significant part of the Philippine hotel market.
What are Condo-Hotels?
Beth Collingz, Overseas Marketing Director and Investment Sales lead for PLC International Marketing, explains that a condo-hotel is a hybrid between a condominium and a hotel. Individual investors purchase hotel units such as rooms, suites, or studios, while a single brand manages the entire operation as a cohesive hotel.
Owners enjoy full ownership of their units, along with freehold title deeds, similar to standard condos. There is no time restriction on ownership, making this investment model appealing to those looking to explore hotel investments.
Rising Demand and Market Potential
Collingz notes a shift in consumer preferences, moving away from traditional timeshares towards condo-hotels. This change, along with an increased interest in hospitality investments, indicates a promising future for condo-hotels in the Philippines.
International hotel brands are recognizing the potential of this market, either integrating condo-hotels into existing hotel operations, developing standalone condominium projects, or including them in mixed-use developments like the Lancaster brand.
Current Market Landscape
While condo-hotels are not as prevalent in the Philippines as in the U.S., they are gaining traction. The market is currently driven by private retail buyers, usually individuals with moderate wealth seeking urban or resort investments. Increasingly, first-time property buyers are also entering this sector.
Metro Manila and Cebu are particularly attractive locations for investment. There is potential for a broader range of investors, including institutional and real estate investors, to engage in condo-hotel projects or to form partnerships with developers.
Affordable Opportunities
The appeal of the Philippine market is partly due to its competitive pricing compared to regions like Europe, notably the UK. Flexible payment plans also add to its attractiveness. Various investor groups, including offshore property investors, foreign retirees, and overseas Filipinos, are looking to maximize returns as they approach retirement. Many opt for condo-hotels, which can double as vacation homes and rental income sources, boasting projected returns of 12-16%.
The Lancaster Atrium: A Case Study
Pacific Concord Properties Inc's Lancaster - The Atrium on Shaw Boulevard in Metro Manila is a "Full Service" condo-hotel. Set to be completed by December 2010, it will offer studio, one, two, and three-bedroom suites. Owners can choose to enroll their units in a rental pool, earning income when not in use through in-house management, marking Lancaster condotels as a top investment opportunity in the Philippines.
Conclusion
A critical factor in the sector's growth will be educating a new investor demographic familiar with traditional buy-to-let properties or commercial real estate. The development of a secondary market in the Philippines will further enhance transparency and liquidity, paving the way for widespread acceptance of condo-hotels.
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