There was a time when luxury tower residences in London would provide a few amenities such as gyms, parking and swimming pools to attract buyers. Today, luxury buyers are looking for more in their amenities and services to help in the decision making process of where to live. One service that has become popular is concierge services offering all kinds of residential assistance from dry-cleaning to planning large-scale catering for private events. But it does indeed come with a price, depending on who the concierge provider is and the amount of services that can be provided especially in London’s prime residential market.
Costs and Services
A London Magazine report states that super prime developments in London have to provide “a complete leisure complex, pool, gym, spa, valet parking and first class security”. Martin Bikhit, managing director of Kay & Co. commented that privacy is key also. Dean Main, founder of Rhodium, a luxury residence management company part-owned by Monaco’s royal family says; “a growing trend is to have smaller studios off the main gym so that residents can work out with their trainer in private”. Conversely, opportunities to mingle with fellow residents are also becoming more inventive, with developers trying to “bring soul into the building”, says Main, by providing residents’ bars, golf simulators and screening rooms.’
Main says that “A prime London development must have a 24/7 concierge service. For buyers, having communal space with a pool, screening room and golf simulator etc., means they are getting a lot more for their money than simply an apartment. But every developer has a different vision of what makes the best apartment block,” Main adds; “We advise developers to keep service charges modest and to charge pay-as-you-go for extra services.”
The residential property One Hyde Park, has the hotel concierge services of Mandarin Oriental, which costs almost £200,000 per year for the largest residences with an average of £19 per square foot.
Simon Barry of Harrods Estates said also: “In top Knightsbridge developments you can pay £17 per sq. ft. for concierge services. Elsewhere in prime London, it’s typically around £10 per sq. ft. in a development with full amenities and concierge service,”
Other hotels providing concierge services are hotel companies; Corinthia Residences at Whitehall Place where residences have prices from £7,950-£12,250 and the Four Seasons at Ten Trinity Square at Tower Hill.
The costs associated with brand name hotel services is reported to raise the prices of properties by 30% versus non-hotel branded costs. One problem is that many of the residents divide their time between second or even third homes and dislike having pricey fees on amenities they do not use very much.
Guy Meacock of Savill’s says; “Service charges are often so high that it is pretty hard to get your money’s worth. All the bells and whistles are nice to have but are not used as much as you might think. The spa rooms in One Hyde Park are rarely occupied on each of the occasions I have visited with prospective buyers.”
When it comes to luxury prime rental properties the cost of concierge services can hurt the level of profitability for landlords. The London Management director Rupert Collingwood sums up the issue by saying; “The services have become increasingly extravagant: gyms, pools, spas, parking and concierge facilities. It’s a lot to pay if your property is tenanted as the facilities in a development have no impact on the rent achieved. In many cases, the service charge alone represents 10-15 per cent of the annual rental yield, which is at 3 per cent in some areas.’
But the hotel-brand concept for concierge services is now beginning to change, with residential properties considering looking for an external or in-house concierge service to meet the needs of the residents. London Magazine reports that even some of the most exclusive and expensive apartment buildings such as 432 Park Avenue in New York and Monaco’s Tour Odéon who use an outside firm or an in-house service for responding to the requests of the residents.
The demands on concierges require more than just the usual services, its the very special requests that make them more valuable to homeowners.
Rhodium’s Dean Main explains several requests: “We’ll get clients asking us to arrange a table for ten at the Chiltern Firehouse on Saturday night or last minute tickets to a major sporting final. We’re able to do most things, but sometimes we need to manage expectations,”
Anthony Conway, founder of Lentworth, provides his clientele with concierge service packages and he describes his clients as “People who are very wealthy are also very demanding.”
“They want a 24-hour service and they’re happy to pay for it.”
By Kevin Murphy: www.kevinmurphy.london