Real Estate Gazette
Total Page:16
File Type:pdf, Size:1020Kb
ISSUE 37 Real Estate Gazette FOCUS ON: OPERATIONAL REAL ESTATE www.dlapiperrealworld.com France Poland Hotels, franchising and third party Poland’s hotel sector: rapid change, investor operators: structural trends in opportunities and likely challenges European hospitality operations Portugal Germany Operational real estate: the future Flexible workplaces: new relationships mean of the sector in Portugal new legal and commercial considerations Romania Hong Kong Latest regulatory changes and their impacts on The effect of disruptions on operational real estate sales-based rental models in Hong Kong Sweden Italy Towards a better functioning rental market: Italy’s highest court allows for rebate of legislation for subletting residential apartments property tax to commercial tenants UK Namibia ‘Cool’ is the new hot… will the UK see a Namibian real estate: investment buy-to-rent model that caters for all? opportunity or liability? US Norway New technology and US real estate: Norwegian amendments to financial assistance seeking “the best way to do it” and their implications for real estate REAL ESTATE GAZETTE | ISSUE 37 | 2020 2 WWW.DLAPIPERREALWORLD.COM A note from the Editor Operational real estate is a rising star in the real estate investment market. One element that makes this asset class so interesting is the various sub sectors it covers, each calling for specialist experience and practical Susheela Rivers know-how in both commercial and legal terms. Co-Chair, Global Real Estate Sector That diversity is reflected in this Germany looks at flexible workplaces issue. You’ll find information on and how changing commercial market opportunities, possible relationships bring new legal risks and changing laws relating considerations (page 9). to investments and development projects in Hotels and Hospitality, From Italy, we hear about a legal Retail, Healthcare, Residential precedent that provides some Property, Buy-to-Let, Senior certainty around controversial Living, Leisure and Tourism, and clauses in lease agreements Student Accommodation. (page 16). Meanwhile, legislation in Sweden for subletting residential Operational real estate appears apartments could mean a better to be the future of the industry functioning rental market (page 35), “ One element that makes this in Portugal (page 28), while the while regulatory changes (and their USA describes how innovation and impacts on operational real estate) asset class so interesting is new tech are reshaping real estate are also covered in our article from the various sub sectors it across asset classes with a focus Romania (page 32). In Norway, on the user experience (page 40). amendments to the Companies Act covers, calling for specialist Hong Kong reports on retailing could have a big impact on financing experience and practical know- and the implications for landlords the acquisition of property-owning and tenants of the recent street companies (page 22). how in both commercial and protests (page 12). legal terms.” Finally, the UK asks if “cool is the The hotel market in Poland is seeing new hot” in terms of developing a rapid growth, with demand for buy-to-rent model that caters for all services and an increase in market parties (page 37), while falling house supply (page 25). Our contributor prices and economic challenges from France stays in that in Namibia are pushing real estate neighborhood, looking at structural in the direction of an improved trends in hospitality and their impact client experience and end user on hotels, franchising and third party satisfaction (page 19). operators (page 6). We hope you enjoy this issue. 3 REAL ESTATE GAZETTE | ISSUE 37 | 2020 Contents Operational Real Estate FRANCE Hotels, franchising and third party operators: structural trends in European hospitality operations ................................................................................6 GERMANY Flexible workplaces: new relationships mean new legal and commercial considerations ..............................................................................................................................9 HONG KONG The effect of disruptions on sales-based rental models in Hong Kong ..............................................12 ITALY Italy’s highest court allows for rebate of property tax to commercial tenants ..................................16 NAMIBIA Namibian real estate: investment opportunity or liability? .....................................................................19 NORWAY Norwegian amendments to financial assistance and their implications for real estate ............................................................................................................................22 POLAND Poland’s hotel sector: rapid change, investor opportunities and likely challenges............................25 PORTUGAL Operational real estate: the future of the sector in Portugal .................................................................28 4 WWW.DLAPIPERREALWORLD.COM ROMANIA Latest regulatory changes and their impacts on operational real estate ...........................................32 SWEDEN Towards a better functioning rental market: legislation for subletting residential apartments ...................................................................................................................................35 UK ‘Cool’ is the new hot… will the UK see a buy-to-rent model that caters for all? ..................................37 US New technology and US real estate: seeking “the best way to do it” ...................................................40 5 REAL ESTATE GAZETTE | ISSUE 37 | 2020 Hotels, franchising and third party operators: structural trends in European hospitality operations Antoine Mercier, Paris How third party hotel operators are unlocking the full potential of properties – and optimizing returns In the last decade, most of hotels, through either leases for incorporating all possible details international hotel operators or management agreements with of the standards and technical have focused on developing their owners, and so obtain a franchise specifications imposed by an brands rather than the operational from international brands. They can international brand’s franchisors, management of hotels. As a result, then offer to owners the same range which they have become familiar they are now using the franchise of marketing tools for the hotels with after developing hotels in model, apart from their upscale that international brands provide. similar schemes. Finalizing a and luxury brands, particularly in Third party operators can also project to this level of detail at the flagship locations, where they are combine this offer with integrated authorization phase enables owners reluctant to lose the control that development, design and technical to better negotiate contractual direct management ensures. teams that possess the skills and arrangements for construction local market knowledge that most work. This approach also Consequently, hotel owners face a international brands do not. Their significantly reduces the possibility scarcity of international brands able assistance to owners then covers of a band compliance dispute with to actually perform the operational the full spectrum necessary for their the franchisor when a hotel opens. management of their hotels with (re)development projects. the degree of specificity and hands- Expanding the on management that optimizing The process begins with positioning franchise model: revenue and value creation require. a project in its environment and new opportunities for exploring new segments before third party operators This gap presents an opportunity moving to more precise definitions While the franchising business for third party operators. Their in the planning authorization phase. model is less developed in Europe business model involves The added value of a third party is (estimated at 40%) than the USA providing the full management their ability to take on responsibility (estimated at 70%), it’s increasingly 6 WWW.DLAPIPERREALWORLD.COM seen by hotel chains as a way to As a result, the third party hotel administrative restrictions that may expand their brands and a way for operators familiar with certain exist in some locations – imposing owners to retain full control over brands have become the key to prior licensing to property agents operations.1 At the same time, developing relationships between and/or intermediaries – are likely brands are key for international those international brands and to be overruled as a result of a operators to quickly enter new hotel owners on a large scale. decision by the European Court of markets. Brands are more important Ultimately, third party operators Justice dated December 19, 2019. than ever because they provide only develop relationships with Based on the EU e-Commerce owners with the resources to keep a handful of brands for which Directive that instituted free up with new technology standards they fully understand their market circulation of electronic services, where they operate. positioning and standards and the ECJ ruled it would be illegal for which, combined in the portfolio any country within the EU to impose of hotels they manage, make them any license for the carrying out of “ Because of the successful in the territories where such activity. they operate. relative flexibility Overcoming this new competition of the franchise Brands move towards from international brands, non-traditional which in some cases are marketing model, third