Revival in condohotel segment

Almost 1,000 apartments were built in condohotel projects in 2014 and more than 1,500 are planned for 2015. According to REAS’ research, the prices of holiday apartments are very varied, ranging from a PLN 4,000 to PLN 23,000 per sqm net. The most expensive are located in Warmia and Masuria and the cheapest are on the coast. A revival in this market segment was particularly evident in 2010–2012. Many factors have been influencing the growth of the condohotel property segment. One of the most important has been developers looking for a suitable niche as sales plummeted on the traditional residential market. Predictions of an increase in the number of tourists travelling to Poland for Euro 2012 also had an impact on the growth of interest in the condohotel segment. However, it needs to be emphasised that due to the small size of the market, the investment decisions of just a handful of developers had a considerable influence on the scale of the supply.

Now you can choose from 60 condohotel projects in Poland (including phases of multi-stage projects). Half are located in the coastal zone, others are in mountain towns and regions, and a few are located in Masuria. The majority of apartments are in buildings that are to be completed in the next two years, and so cannot yet generate any actual profit from leasing for the buyers. According to a survey of the apart- and condohotel market carried out by REAS in June 2015, the most popular model offered by operators is for the buyer’s revenue from an apartment to be linked to the amount of lease revenue generated. In the first few years of the agreement the operator guarantees revenue in terms of a percentage of the apartment’s price. This is usually no less than 5 pct of the net purchase price of the apartment. The highest guaranteed rates of return are to be found in Warsaw projects.

According to the REAS study, condohotels are projects involving a lease option at the time of buying the apartment/a hotel suite, regardless of the character of the lease operator (e.g. a developer’s SPV company or a recommended external operator), the type of the unit (a hotel suite or an apartment) and any additional services offered.