Why urban developers should offer a co-ownership option to their buyers
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Urban tourism has seen growth of nearly 60% over the last 5 years and now accounts for over 20% of the market. The growing 'bleisure' trend is adding new demand for high quality accomodation in the world's major cities.
Tourists have long been attracted to large cosmopolitan cities that offer a high cultural, arts and retail mix. Now, the popularity of combining business travel with leisure, or 'bleisure travel', is also growing rapidly as business travellers are increasingly looking to extend their stay in a major city by taking friends and family with them to enjoy all the city has to offer.
With this growth, developers have also recognised the potential of offering fractional interests in urban areas. Only cities with international appeal - world class shopping, high levels of cultural attractions and a world business centre are likely to be successful for larger resort developments. The potential for urban fractionals is even greater as city visits are less seasonal and less governed by the weather than traditional coastal vacation destinations.
For developers, there are several unique factors to bear in mind when considering an urban fractional scheme:
Urban fractionals are more likely to be used by couples rather than families, although space to entertain friends and family during visits is important. This means that one or two bedroom properties will be more popular in urban locations compared to coastal and mountain destinations where three or four bedroom properties work better.
Urban fractions in London are popular with buyers from Hong Kong, Singapore and Malaysia who prefer the privacy and security of apartments rather than houses.
Different services will be required for a successful urban fractional offering - a high level of concierge services, health club membership and even use of a car.
Careful consideration will need to be given to usage rights. Not only will many urban fractional offerings be aimed at couples, they are also likely to want the flexibility of being able to arrange visits on relatively short notice, so an innovative reservation system will be needed to cater for this demand.
A key attraction of fractional ownership - enabling owners to part own properties in several destinations around the world has the potential to work very well with urban fractionals - see our article on portfolio ownership here.
Please contact us if you are interested in selling a property on a fractional basis, or if you are interested in acquiring an interest in an urban property - we may be able to assist you in establishing a buyers group.