primeresi.com
http://www.primeresi.com/fit-for-purpose-londons-new-wave-of-private-gyms-and-spas/32049/
Fit for purpose? London’s new wave of private gyms and spas Residents of modern luxury developments are increasingly looking for more than an apartment, displaying an appetite for “lifestyle packages” to rival those found in the world’s top hotels. Richard Barkham, Group Research Director at Grosvenor, explains how spa and gym facilities have become the star attractions, and the implications for prime and super-prime developers… A high end residential boom is underway in London. More than 1000 units priced over £5m (£4,000 per square foot) will be delivered over the next five years, possibly more. The majority of these schemes are in Knightsbridge, Kensington & Chelsea, Belgravia and Mayfair, so location provides a solid value base of around £3,000 per square foot. Design, specification, service and ‘hotel living’ facilities can push values up to £6,000 per square foot and above.
Pride-of-place in this nexus of value drivers are the spa and gym facilities
Luxury hotels are increasingly defined by the quality of their fitness, spa and wellness facilities, and the high-end apartment sector is increasingly competing in the same market. Hotel living, is what modern luxury residential development is all about and facilities include business suites/boardrooms, private screening rooms, function rooms, wine storage, private dining and concierge services. But pride-of-place in this nexus of value drivers are the spa and gym facilities. The benchmark is the customer experience offered by London’s top spas, such as the Corinthian and Bulgari Hotels, alongside the equipment and service levels of the top health clubs namely, KX, Equinox, 3rd Space and The Reebok Club. Phillippa Hardman, Managing Director of Raw Corporate Health (RCH), a well-established and leading consultant and operator of residential gyms and spas, comments that ‘’the last 12 months have been the busiest we have ever seen in the residential sector of our business. It is very exciting to see these facilities become increasingly more developed. We frequently work with our clients at the beginning of the concept and design phase. One of our key objectives is health and safety from an operating perspective for the completed product as well as being part of the design process helping to create what our clients need to establish them as a leader in this field’’. 375 Kensington High Street (St Edwards): An exclusive development with a state of the art private gym, private training room, pool and spa plus a screening room and two luxury treatment rooms
375 Kensington High Street Residents’ Swimming Pool and Spa Facilities
State of the art Private Residents’ Gym at 375 Kensington High Street
It is not hard to understand the drivers. The post global financial crisis (GFC) economic landscape has been very favourable to prime property. Economic stimulus in China created an emerging markets boom. Many purchasers
are high net worth individuals (HNWI) from resource rich nations, seeking to create a safe place for their family and money in the long term. There are few better spots than London, with its governance, transparency, educational facilities, culture and recently devalued currency. Sterling fell by 20% in the wake of the GFC, so although prime central London residential is up by 30% since 2007 in terms of pounds, it is the same price in dollar and euro terms. Knight Frank estimates that there are 190,000 HNWI in the world and there will be 50% more by 2022*. Globalisation creates both wealth and inequality and robust demand for luxury living.
Arguably, London is only just catching up with New York, where full service spa and gyms were the norm in the early 2000s
High end buyers are also peripatetic: living sometimes in their home country and at other times in London, New York, Hong Kong or Singapore. This drives innovation in design, facilities and service offer. Arguably, London is only just catching up with New York, where full service spa and gyms were the norm in the early 2000s. Albion Riverside pointed the way, but it was 199 Knightsbridge that set the new benchmark in 2005 with business facilities, a swimming pool and a stunning gym, alongside well-appointed treatment rooms. The developer was Hong Kong born Sammy Lee, who had the international experience to see what London lacked in terms of its ability to cater for the nouveaux HNWI demand. ONE Hyde Park by OHP came next and so the race was on to create the most glamorous apartments on the planet. So what constitutes the ‘state of the art’ in super lux gym, spa and wellness facilities? Hardman states ‘‘First and foremost is exclusivity. We are now seeing the emergence of the ‘Residents Club’. Residents only access to 6,000 to 25,000 square feet of space, which would include many of the following: a grand entrance, a lounge, golf simulator room, squash court, a large gym often with private training space, studios – one holistic- one high energy, luxurious changing rooms, large swimming pool, high end hydrotherapy pool with sauna and steam rooms creating the wet spa experience of relaxation and luxury. Male and female changing rooms often with single sex sauna and steam rooms and up to five treatment rooms with dry relax space.’’ The Corniche, Albert Embankment (St James): A prime development with luxury private residents’ facilities including an exclusive gym, pool and spa, luxury treatment room, screening room and residents’ lounge
CGI of The Corniche Residents’ Swimming Pool
The phrase ‘putting a gym in’, does not begin to capture recent trends in the high end market. Neo Bankside on The South Bank (Native Land): An iconic building with a stunning standalone residentsonly glass gym
Neo Bankside Gym
The main danger in the super-lux market is the facilities becoming too big, as they have in some cases in New York. As well as build cost, size drives up operating cost. In New York, some residents’ only fitness and spa facilities have had to be mothballed because the service charges to run them have become too high and usage levels too low. Super-lux facilities require a high level of staffing and exclusivity requires that facilities are not shared with non-resident users. It is hard to see it at the moment, given the breadth and depth of HNWI interest in London living, but it could turn out that if the market continues to expand, the facilities could overshoot in terms of size and specification. Hardman points out that ‘’sizing is relative to the amount of apartments being built. With 300 apartments compared to 2000 apartments clearly the mix of facilities can vary extensively. More is not necessarily better; it’s about quality and selection of facilities. Residents do not want to have to wait to use the treadmills if they have paid top prices for their apartments but, equally, they don’t want to be in a huge empty gym with no staff close by. Overseas buyers moreover, often have very specific requirements. For example the Middle East market will want single sex sauna and steam rooms not just pool side, but the UK market would expect these to be shared. You often need to cater for both at the very top end where space allows’’.
Once a pool is included the facilities must be staffed during opening hours with emergency procedures closely monitored by the company operating them
Developers will argue that without the best possible facilities the apartments will not sell. Some will even say that good facilities add up to 20% to the price. True, but excess marks the high point of any property boom and we are probably at that point, right now. Hardman: ‘’be aware of running costs very early on. Budgets need to be set as always. Positioning within the development of the facilities can help save on staffing sometimes. All wet facilities add high running costs. Dry facilities have a much lower cost to operate. Once a pool is included the facilities must be staffed during opening hours with emergency procedures closely monitored by the company operating them. It is vital that the spa and gym are operated by a qualified experienced company’’. Alongside the super-lux developments of Mayfair and Belgravia, London is also experiencing a boom in the development of high end apartments. As at July 2013 there were 17,000 units under construction. There are 86,000 units with planning permission and 13,800 at the application stage**. Most of these developments are within Zones 1 and 2 and a significant proportion are in riverside locations. Average values in this market are from £600 per square foot to £2,000. Developers, as is always the way, are rushing to emulate the top end of the market and include exclusive wellness options. A ‘standard’ gym and wet facility in this market would be 4,000 to 8,000 square feet with gym, changing rooms, pool with pool side sauna and steam room, spa pool and one to two treatment rooms. Hardman goes on to say: “A ‘dry gym only’ residents’ facility rather than the full pool and spa will be in the region of 1200-2500 square feet, dependent on the size of the development. We are regularly installing these in areas just outside central London, for example, Telford Homes’ The Panoramic development in Poplar, East London, includes a very cool state of the art residents’ only gym with a distinctive younger feel for their buyers.’’
Telford Homes Panoramic Gym
If size and over specification are the dangers associated with the super-lux market what are the potential problems in the less rarefied, but no less active upper end of the mass market? They arise from a combination of developer cynicism and inexperience. Cynicism has previously driven some developers to place their gyms in space which is compromised in some way so that it cannot be used for apartments. Space allocated to gyms does not attract a Section 106 levy. Inexperience, particularly on the part of architects, leads to the creation of gyms and spas that have higher running costs than they need to have and offer a poor ‘user’ experience. This can occur in a number of ways. For wet and dry facilities, the classic mistake is putting the pool too far away from reception and then needing extra staffing. All wet facilities need onsite trained staff very close by. For dry gym only facilities, mistakes include placing the residents’ gym to far from the concierge, to offer coincident security, or failing to implement an adequate induction process in order to meet with Health and Safety guidelines. All of these mistakes force up the service charge, which buyers tend not to be concerned with at the time of purchase but have problems with later on. In conclusion, London is prospering and it has led to a development boom. This offers to transform the capital making it an ever more attractive place to live. However, as in every boom, there is a combination of excess at the top of the market and a lowering of standards elsewhere. Pools, spas and gyms are a brilliant addition to the built environment and, in some ways, act like parks and private gardens did a century ago. However they can require quite a high level of service and maintenance. Our concern is that this is not always being given sufficient attention ahead of time. Higher service charges and poor customer experience will result. The key is to bring an experienced consultant to sit alongside the architect into the design process at the earliest possible stage. By now the expertise does exist; knowledge and experience can enhance value and reduce cost in the long term. Raw Corporate Health is a residential gym and spa consultant and operator T. 0208 789 9600 rawcorporatehealth.com
grosvenor.com *Knight Frank, The Wealth Report, 2012 **Jones Lang LaSalle, Residential Eye, October 2013