Leisure real estate summit returns to LondonAB Property Marketing

Leisure real estate summit returns to LondonAB Property Marketing

More than 100 international industry figures from a range of real estate disciplines gathered at The Montcalm Marble Arch in London last week for the Leisure Real Estate Summit 2014.

Leisure Real Estate Summit is designed to provide hotel and other leisure real estate asset owners, asset managers and investors with new and complementary strategies to create real value, identifying routes to investment in order to release the potential of UK and international assets.

Following a successful launch in London last year, the event is a reaction to both the continued difficult economic situation, and the growing synergies and crossovers between various elements of the international mixed-use leisure real estate sector, including hotels, lodges and leisure parks, second home ownership, vacation ownership, REITs and vacation rental.

Sponsors for this year´s event were The Registry Collection, Azure Malta, Key Location Properties and Hutchinson & Co Trust Company.

The conference got off to a thought-provoking start when journalist and trends forecaster James Wallman explained his theory of “stuffocation”. Wallman says the 21st century will see the rise of experientialism, where people are more driven by amassing experiences rather than material possessions. Partly due to disullusionment and partly due to the rise of social media, he says status in the 21st century will be expressed by what we do, not we own.

Aimee Valaitis of Rightmove Overseas revealed the results of her company´s recent survey of 3,000 existing and future overseas property buyers. The respondees´ primary motives for purchase were made up of 51% second home owners, 36% who bought for emigration and 13% for investment purposes. Spain and France were the most popular markets for both second homes and emigration.

Luis Carmo Costa of Neoturis gave a fascinating presentation on the relationship between the holiday home market and airlift. He warned of the pitfalls of developing in areas where the transport infrastructure was not sufficiently developed to attract a sizeable tourist audience, which would become the bedrock of a second home industry. He cited the examples of golf resorts in Bulgaria and Lake Balaton in Hungary as areas where development went ahead without sufficient airlift to make the projects viable.

Low Cost airlines brought regular seat-only capacity from source markets to the resort second home destinations, said Carmo Costa, and said that the volume of low cost traffic is likely to continue growing. Sounding a note of caution, he said that the likes of EasyJet are now allowing group bookings, combined with a rise in charter flight activity, mean that second home developers should become an engaged part of the tourism sector. Developing relationships with local communities and businesses, and use their lobbying power can help to ensure that flight frequencies are sufficient to support a second home market.

Dejan Djordevic of ESTA Holdings gave a case study about bringing a distressed asset back to health. The Four Seasons Bora Bora resort was launched “at the worst possible” time, just as the global financial crisis kicked in, but a combination of strategic cost cutting and revenue boosting exercises enabled the resort to weather the storm, and it is now one of the top performing properties in the Four Seasons portfolio. Djordevic said that guest expectations remain as high as ever, even during the tough times, so it is essential that a resort has a strategy to cope with every situation.

The rapidly growing potential of the retirement market was discussed in a panel devoted to this important buying demographic. Gil Summers of Summers Retirement Villages said that the traditional view of retirees is outdated, and these buyers are now active, sociable and often heavily involved with their communities. Perry Newton of Azure Malta had noticed a similar trend and stressed the importance of providing sufficient and suitable facilities and activities for retired buyers.

Presentations from Dan Kiernan of Intelligent Partnership and Kathryn Miller of STR Global looked at investment type and activity in hotel and resort property, and hotel performance respectively.

A breakout session on shared ownership resorts (fractional ownership and timeshare) included presentations on vacation rental, legal and trust structure, and exchange programmes.

During a session on attracting Chinese buyers in to European leisure real estate markets, Carlos Leal of United Investments Portugal, part of the IFA Group, said: “The Golden Visa programme for Chinese investors is not a miracle drug for an ailing property market. It has a limited timeframe, and a resort should not base its business plan on it.”

Towards the end of the day, during a session where panellists were asked to predict future trends for the market, Russell Bragg of Bragg and Co said that “PIGS will fly” and predicted strong growth for the markets in Portugal, Italy, Greece and Spain. He also predicted that most fractional developments in the UK and Europe will fail, and said that UK buyers purchasing overseas property off-plan is a thing of the past.

Delegate feedback from Leisure Real Estate Summit 2014

‘Great Summit providing depth and insight into the leisure real estate market’
Thierry Hellin, deputy group CEO, Group Pierre et Vacances, Center Parcs

‘A real variety of truly insightful speakers’
Rob Sykes, senior associate, WATG

‘Great value from industry experienced executives’
John Mather, CEO, Thor Estates Limited