How demand is rising among wealthy buyers for ‘hotel-serviced living’

Salvador Dali at the Hotel Le Meurice in Paris in 1974, where he lived one month every year

She may have survived on just four hours’ sleep a night when she was in office, but Margaret Thatcher chose a suite at the Ritz in London to recuperate after an operation in her final months rather than return to her Belgravia townhouse and negotiate its five floors. The late British prime minister was an old friend of the hotel’s owners, the Barclay twins, and they reportedly invited her to stay as long as she liked.

Thatcher was one in a long line of people who have chosen to live in hotels. “The Ritz is my home,” declared Coco Chanel. And it was: she moved into a suite in the Paris hotel in 1934 and remained there until her death in 1971. Salvador Dali spent at least one month a year occupying the presidential suite at the Hotel Le Meurice, also in Paris, where he once requested that a herd of sheep be brought to his room and proceeded to shoot at them. Fortunately, his gun contained only blanks.

In London, Oscar Wilde conducted his affair with Lord Alfred Douglas at the Savoy while they lived in adjoining rooms. After his consequent trial and imprisonment for sodomy, Wilde left England and settled in the Hotel d’Alsace in Paris. It was there that he gave his famous ultimatum: “This wallpaper will be the death of me: one of us will have to go.” On November 30 1900, it was Wilde who went.

The actor Richard Harris was a long-term guest of The Savoy in London. He lived in the hotel for 15 years, and was clear about its advantages. “If you’re paying the mortgage on a home, you can’t ask the bank manager to fetch you a pint,” he said. In 2002, Savoy staff were worried when they hadn’t seen Harris for a week but feared entering his room, with its Do Not Disturb sign on the door. His ex-wife was called and she found him dying; as he was taken out on a stretcher, he announced to the crowded lobby, “It was the food”.

Such people had – and have – their own reasons for choosing to reside in hotels, but service and ease seem to be common factors. For international business people, hotel living can be an easy alternative to owning flats in multiple cities, with all the upkeep they entail. The Lanesborough hotel in London even offers to store the belongings of regular guests – from suits and ties to furniture – and lay them out when they return, often in the same room or suite.

And yet there is no denying that living in a hotel is still considered odd by many. Why would you choose not to choose your own wallpaper? Does the novelty of all-hours room service and endless clean towels really never wear off? With the days of Downton-style service long gone in Britain, most people value privacy and the freedom to, say, cook up a storm in their own kitchen over the convenience of ringing for a cup of tea.

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Coco Chanel at The Ritz in Paris in 1937

For the rich, there is a middle way between home and hotel. In recent years a market has grown up for private properties joined to hotels – like serviced apartments but with a famous hotel brand attached. The first of these to appear in London was The Knightsbridge, a development of about 200 homes by Hong Kong property tycoon Sammy Lee, offering residents “six-star” hotel-style service. The scheme, which is linked to the Hyatt hotel group, was completed in 2005 and, since then, the trend for so-called “serviced living” has grown.

“Over the last decade, there has been a surge in demand for high-end residential properties in central London,” says Dean Main, founder of the lifestyle and property management company Rhodium. “And, as high net worth individuals have become more accustomed to a personal approach to their property needs, we have seen a convergence of property-related issues and general lifestyle requirements. These individuals are calling for the stress of home ownership and maintenance to be outsourced.”

Dominic Grace, head of London residential development at Savills, says concierge services have become “de rigueur for top-end developments” in the past five years. He believes hotel brands “add value” to serviced apartments, acting as a stamp of quality.

Coco Chanel’s suite at The Ritz in Paris

One of the most high-profile examples of hotel apartment living in London is One Hyde Park: The Residencies at Mandarin Oriental. Completed in 2011, it is a development of 86 high-end properties designed by Richard Rogers, which is physically linked to and serviced by the hotel. Prices start at £6m, although in 2010, a six-bedroom apartment was sold for £140m, making it the most expensive residential property in Britain at the time. Residents pay a fixed fee for services and facilities, depending on the size of their property (the press department will not disclose the fee, but insists it is “competitive”). Services include 24-hour concierge, valet services, car cleaning, housekeeping and security. The list of facilities available is also exhaustive: a private cinema, 21-metre swimming pool, saunas and steam rooms, treatment and relaxation rooms, private exercise studios, squash court, gym, golf simulator, virtual games room, wine cellars, business suite with private meeting rooms and underground parking.

On the market in Mayfair, central London, is a new two-storey penthouse adjoining the five-star Connaught hotel, priced at £15m-£20m through Knight Frank. It comes with 45 days’ annual housekeeping, year-round concierge and room service, and access to The Connaught’s spa and restaurant via a private lift. Senior designer Danielle Joyce opted for a neutral colour scheme – creams, greys and blues – so as “not to scare” potential buyers. Yet she scattered the penthouse with one-off items from antiques shops to distinguish it from the hotel rooms next door.

Nearby is Savoy Court, a block of upmarket flats adjacent to The Savoy hotel whose owners can opt for housekeeping and concierge services provided by the hotel, membership to the Savoy’s fitness centre and private access to the hotel. A two-bedroom flat at the block is on the market for £1.95m through Knight Frank; the annual service charge is £24,487 and the ground rent is £700 per year.

Also in central London, five new upscale apartments in a Grade II-listed, Lutyens-designed building on Lincoln’s Inn Fields are on sale for about £2m through Savills. They are linked to the new private hotel Club Quarters and, as at similar developments, residents benefit from the hotel’s services and facilities.

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The trend for serviced living also extends to out-of-town homes. Glenaig in Perthshire is a new six-bedroom house with concierge services in the grounds of the Gleneagles Hotel (“aig” meaning “beside” in Gaelic). The hotel is famous for its golf course and will host the 40th Ryder Cup in September next year. The house, which is part of a gated development, is being sold through Knight Frank with an asking price of £2.5m, while concierge services are about £2,000 a year.

In Salcombe, Devon, the Estura development consists of 10 high-end houses and two flats serviced by the Salcombe Harbour Hotel and Spa. They are on sale through Savills, from £1.5m. Residents will have two years’ access to the hotel’s facilities, including use of the pool and gym. For £1,800 a year, the hotel’s maintenance team is on call seven days a week, while the housekeeping charge is £2,500 a year.

It is hardly surprising – given that the target audience for these properties are the international jet set – that serviced living is common outside the UK, too. It is becoming an increasingly popular choice in Chinese cities like Shanghai, especially for business people and expats. Savills has a serviced residence division in China marketing “elegant private apartments with the services of an international hotel”. The estate agent’s Century Park development, which opened in the Pudong district of Shanghai last year, has 65 one- and two-bedroom apartments and three-bedroom penthouses that come with housekeeping services and on-site facilities. Savills is due to market similar apartments in Shanghai, Shenzhen, Hangzhou and Taipei in Taiwan over the next two years.

In Australia’s Gold Coast, the Palazzo Versace Residences and Hotel combines five-star hotel accommodation with 72 homes designed by Donatella Versace. “This type of residence has yet to hit Sydney, but it won’t be long before it does,” says Tony Leong, an associate at Savills Residential Australia. He says that since the launch of the country’s new “significant investor visa” last year – for which applicants must invest at least A$5m in government bonds or Australian companies – there has been an influx of wealthy people from Hong Kong and China looking to buy residential property in Australia.

In the US, residential serviced buildings are nothing new: 960 Fifth Avenue, built in the 1920s, is an early example. It boasts a French chef, its own dining room and entertainment facilities. The monthly maintenance charges on recently sold apartments range from $3,732 for a two-bedroom unit to $11,682 for a four-bedroom flat. But to buy into the building, you have to be approved by the board and, as real estate agent A Laurance Kaiser IV puts it, “if you have less than $100m, you’d be considered poor”.

Apartments serviced by hotels are equally well-established in the US. In 1912, Alfred Vanderbilt built the eponymous New York hotel on the site of his former family home on Park Avenue, and moved into the top two floors. The New-York Tribune noted that the Vanderbilt suite was “the equivalent of a complete town house”. Kirk Henckels, vice-chairman of New York-based agent Stribling, says that hotel-serviced residences in the US – including those at the Trump International, The Plaza and The Pierre – “have always been very successful”.

The Connaught penthouse, priced £15m-£20m

So-called “hotel condos” are also common in the US if not in Europe. The term refers to an apartment that the resident effectively owns for a certain number of days per year, leasing it back to the hotel for short-term guests to use when he or she is away and benefiting from the income generated in that time. It may sound ideal, but Henckels says this model “has always been a very tough sell”. Most experts still do not understand why such schemes are not more popular, he says, except that, “if you have the money to do this kind of thing, you’d probably buy your own apartment anyway. It’s a practical solution for people who don’t necessarily have to be practical”.

As long as “people who don’t have to be practical” are attracted to prime city locations like Manhattan and central London, there will be a demand for top-end property – and for lifestyle management services attached to it.

In London, that demand is growing. Finchatton, the developers of the penthouse at Connaught Apartments in Mayfair, report a 32 per cent increase in new applicants registering interest in buying a £10m-plus home in the first five months of 2013, compared with the same period last year. The penthouse was once reserved for the manager of The Connaught hotel and his family. That seems unthinkable now: it is simply worth too much.

Artists who checked in – and checked out

It is not just all-night porters and hydro pools that have attracted long-term hotel guests. For some, it is more about community than exclusivity, as demonstrated by the Chelsea hotel in Manhattan.

First opened in 1884 as a housing co-op, the Chelsea became a hotel in 1905 and long-time owner Stanley Bard went on to turn it into a famed bohemian hub. It is said he charged guests what he thought they could afford, encouraging artists to focus on their work. Leonard Cohen met Janis Joplin at the Chelsea. Jimi Hendrix rehearsed there. Mark Rothko used the old dining room as a studio. The Beat poets William Burroughs, Allen Ginsberg and Jack Kerouac were regulars. Other celebrated guests included Patti Smith, Bob Dylan and Arthur Miller, who stayed for six years.

The hotel saw no shortage of drama. Dylan Thomas is alleged to have downed 18 glasses of whisky in his room before falling into a coma and dying in a nearby hospital. And Nancy Spungen, girlfriend of the Sex Pistols’ Sid Vicious, was found stabbed to death in the bathroom of room 100 in 1978.

In 2007, Bard was ousted by the hotel’s board of directors, and the Chelsea was sold for a reported $80m. Though some long-term residents have been allowed to stay under state rent rules, many believe they are being forced out. As one of the Chelsea’s most famous guests once observed, “The times, they are a-changin’”.

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