The magnificent seven?

We will only know the answer in a few years, after which Qualia Development, so far known only for its residential developments, will have finished a number of pipeline projects. The company, which belongs to the capital group of PKO BP bank, has just signed a framework agreement for a franchise partnership with the French Louvre Hotels Group, the eighth biggest hotel group in the world (the operator of over 1,000 hotels in 40 countries). The partnership is to last a minimum of 15 years and should by then have resulted in the development of 7 hotels, including 951 rooms and suites in condo hotels (each unit is to have a separate owner who will also have a share in the ownership of the common areas). The cost of the investment programme - over PLN 500 mln - is only an estimate at this point, as so far construction work has only begun on the first facility - Golden Tulip Residence in Międzyzdroje.

From the Baltic seashore to the mountain peaks
The opening of Tulip Residence in Międzyzdroje, which is to offer 110 suites, is planned for the summer, with the general contractor being Henpol. This is to be followed by Golden Tulip Gdańsk-Residence in Gdańsk-Jelitkowo. The opening of this condo hotel, which is to be built next to the Neptun Park residential estate, is to take place in 2013. The developer has also secured a plot next to the pier in Jurata, where it is to build its first five-star Royal hotel, which should open its doors in 2015. Additionally, Qualia is to invest in the Golden Tulip-Władysławowo Residence in Władysławowo (to be opened in 2014). Meanwhile, the company will soon finalise the purchase of a site in Zakopane for the Golden Tulip Zakopane-Hotel (also to open in 2014). Qualia also intends to expand in the capital. The Tulip Inn Warszawa-Hotel is to be built on a site on ul. Żwirki i Wigury that currently belongs to PKO BP, but is soon to be transferred to the land bank of the developer. The final planned project (still under negotiation) is likely to be built in Duszniki- Zdrój. Golden Tulip Duszniki-Zdrój-Hotel will probably be finished in 2016, as will the Warsaw project.
"We have identified a gap in the market between residential developments and traditional hotels. We have defined all the weak points of existing facilities of this type in order to eliminate elements of risk both at the stage of project development and management. This is how the idea of cooperating with an experienced partner was born, as this company will give us the benefit of its know-how with all of its years of experience, as well as its international reservation system," explains Leszek Piotr Nałęcz, president of the management board of Qualia Development. Its entry into the condo hotel market, which is new for the residential developer, forms part of a broader strategy that consists of building up the company's value through commercial projects, including hotels, and also - in the longer term - offices.
"We expect that the eventual occupancy rate will be around 50-55 pct per year. These estimates are based on the tried-and-tested reservation systems of the Louvre Hotels Group who we are cooperating with, as well as on research carried out by the Horwath HTL consultancy. In the first three years - when a facility has to ?warm up' as they say in the industry - we at Qualia will provide our investors with a fixed rate of return on the investment amounting to 21 pct. Afterwards half of the revenues go to the apartment owner while the second half goes to the operator. Qualia Hotel Management will promote the facility, cover the operating costs and create a fund for renovations, which will make it possible to modernise the building on a regular basis, so that it maintains the Golden Tulip standard for many years," says Leszek Piotr Nałęcz. The developer is currently building a company structure and team of professionals who will eventually be responsible for the facility management, the sale of reservations, the marketing and advertising of the hotel. It will be supported, and also supervised, by its French partner with regard to compliance with standards, such as the furnishing of rooms, conference centres and common areas.

Who will buy these beautiful condos?
"We have constructed our offer in a way that will make it attractive not only for clients with cash, but also for those who only have 5 pct of the price of a suite at their disposal. We are preparing a credit line in cooperation with the banks that will make it possible to finance the purchase of a property with a loan of up to 95 pct of the value of a suite. According to our calculations, clients who commit resources of 30 pct of the value and borrow the rest of the capital from the banks will have paid all the principal instalments as well as the interest in 15 years," says the head of Qualia Development. How many interested parties will the developer find? On the one hand, a middle class has slowly been forming in Poland and is looking for safe investments to rely on in the autumn of their lives; on the other hand, the competition is not sleeping.