“The client wants everything like in a hotel.” How is the service apartment market developing in St. Petersburg

Photo: iStockphoto.com/Tero Vesalainen

In six months, 60% more units were sold on the St. Petersburg apartment market than in the same period last year. According to St. Petersburg Real Estate, the volume of supply in the city as a whole increased by 31% at the end of June. However, if we take it by segment, only the “pseudo-housing” format showed an increase of 17%, and the share of service apartments decreased by 8%. The participants of the Fontanka round table talked about changes in the apartment market and new challenges for this area.

Active half-year

In general, the number of objects for sale in St. Petersburg has increased, but, as Marina Pavlyukevich, chairman of the hotel Real Estate Committee of the Russian Guild of Managers and Developers, CEO of the PLG development group, said, in square meters, the volume of supply of service apartments is stable at 270 thousand square meters. m.

— Now the authorities are making efforts to contain the apartment market, and they are also under social pressure. So we can say that the benefit from the service apartments, which it made sense to count on earlier, is decreasing,” she explained. — We have worked in difficult conditions for the first half of the year: without the preferential mortgage programs that our partner competitors had in the field of residential real estate. In the second half of the year, we expect an influx of new investors against the background of the abolition of preferential mortgages for apartments, which are also often considered as an investment product.

— The key factor influencing investors’ interest in certain projects is, first of all, brand awareness in the market, — said Judita Grigaite, Marketing Director of the YE’S apartment hotel chain. — Two facilities under the YE’S franchise are currently under construction in St. Petersburg, sales in them increased by 69% compared to half a year to half a year. An important aspect is the support of the developer at all stages of implementation, including analytics of interaction with investors and training of sales managers. In other regions of our company’s presence, sales starts are scheduled for the third quarter of this year and the second quarter of next year — one, two or three facilities will be launched in different cities.

— So far we have one apartment complex in St. Petersburg under the Avenue apart franchise, – added Vyacheslav Batakov, founder of MOST agency, official broker of DVA Group. — The minimum number of sales per month for the last six months was 21, and on average 30 lots are sold. That is, we are confidently among the top three, and sometimes we take the first place in terms of the number of transactions.

As a positive moment for the market, he noted the fact that St. Petersburg recently overtook Moscow and Sochi for the first time in the average check. Domestic tourism as a whole has grown by 20%, and further growth is projected. An influx of guests from India and Asian countries is also expected.

— Therefore, we will launch another apartment complex in St. Petersburg this year and at least two next year, – the expert added. — We also have projects in Moscow and Sochi with stable sales and demand, and five more projects are currently being prepared for launch from the regions on our list — Yekaterinburg, Volgograd, Irkutsk and Vladivostok.

To attract guests

The peculiarity of the service apartments is that they can vary the load depending on the season, renting rooms for long-term or short-term rentals.

— Now we have four facilities under management, — said Elena Yekhlakova, Commercial Director of PSK Invest Management Company (part of the PSK Group of Companies). — In our Start apart-hotel, 80% is for long-term rentals and 20% for short-term rentals during the season, that is, from May to September. As for the Avenir network, the Ladozhsky Avenir facility is entering the market this year, and we manage three more network projects — Putilov, Kirovsky and Moskovsky. Across the network, sales increased by 15-17% compared to the previous year, the rental price increased by 15%, and the number of bookings increased by 15-20%.

According to her, the average download rates for the Start project are stable: 87% from year to year. This level is maintained at the expense of regular customers. As for Putilov Avenir, where corporate clients mostly stay, the load is 96%.

— During the season, we switch to short—term rentals as much as possible, out of season the apartments are transferred to long-term, – she added. — As for the residents, they are mostly Russians, but representatives of other countries are already appearing: Kazakhstan, Belarus, a few from European countries. In the near future, we will present the fifth project in this network, and it will be more conceptual. Follow the announcements.

— In the first half of the year, the average occupancy of our apart-hotels in St. Petersburg and Moscow amounted to 92%, and revenue increased by 41%, — said Judita Grigaite. — For the second year, we have seen a tendency to move away from seasonality — high occupancy in the spring and autumn months and a decline in winter – in favor of an even distribution. At the same time, during the period from January to July, the flow of guests increased by 30% compared to the same period last year and reached 85 thousand people. Our active cooperation with the largest tour operators played an important role in this.

— In 2024, we reached the indicators of 2019, — Marina Pavlyukevich added. — Our hotel is located at the entrance to St. Petersburg, the place is convenient for corporate clients, and we try to focus on this segment. But, of course, during the summer season, we are happy to work with tourist operators, realizing at the same time that organized tourists are the cheapest segment. Therefore, we are seriously balancing between short-term and long-term rentals, between the corporate and individual travel segment. For example, in June, individual tourists, who bring in the most money, borrowed 44% from us, and only 7% of the revenue was brought by long-term tenants.

She noted that in May and June, the main task was to maintain the level of last year’s indicators for the owners — and the company coped with this. Relative to individual tourists, the ADR level (price per night) increased by 20.71%. At the same time, with the commissioning of the second stage of the apart-hotel, the number of rooms in management reached 500 units, and revenue doubled.

— Our main client is still an investor, a direct buyer of apartments, so our main task in cooperation with colleagues from management companies is to sell apartments, and not rent them out, — Vyacheslav Batakov emphasized. — Although the guest who rents the unit is secondary to us, he comes out on top in importance when it comes to product development. In general, based on the data of our analysts, we can say that in terms of occupancy and average check, St. Petersburg is showing growth year on year.

The art of managing

Vyacheslav BatakovHe noted that in terms of apartment management, the situation has changed dramatically recently. Firstly, since the beginning of its development, the market has been “cleared” of foreign companies, which gave domestic players a chance to develop. But it worked both in a plus and in the opposite direction — dubious one-day companies appeared on the market.

— There are criminal companies that have been working in the market of the two capitals for a long time, but they are not well known, — the expert continued. — These are just those companies that do not invest in marketing and brand, and now they are lagging behind in the race in many respects — but the current time can be called unique for the growth of apart-hotels in the service segment. The state has already begun to legislatively regulate this area, but I believe that we need to look at it positively and see this as an opportunity to break ahead and bring outsiders out of this race. In general, it will be better for both the market and our end user: the product and its profitability become clearer and more transparent. And against the background of an increase in the key rate, marketers and product specialists will need to attract customers with something, because the profitability of apartments in the region of 7% still looks unprofitable at deposit rates of about 20%.

— Now the competition for customers with classic hotels has intensified in the market, — says Elena Yekhlakova. — We focus on service as much as possible, we have absolutely everything that is available in a three- or four-star hotel. That’s probably why we have a large proportion of guests who come on business trips, then return just to relax.

As for working with owners, companies are now actively switching to the boiler method of income distribution: it is evenly divided among everyone, regardless of whose number was occupied and whose was not.

— Many of our owners are waiting for this, because with the boiler method, income is distributed fairly and evenly, — the expert added.

— We have come a long way to reform our management company, — Marina Pavlyukevich continued. — At the beginning of the sales of the IN2IT project, we planned to pay individual income to the owners based on foreign software, but now we are working on Russian software and have transferred all owners to the boiler. Studio rooms, “comforts” and “standards” bring an average income of 47 thousand rubles per person, minus utilities. For two-room apartments, the income amounted to 79 thousand, while the expenses of the criminal code range from 40 to 50% of revenue at different times.

According to the expert, the guaranteed income and the boiler method are designed for two categories of people. Those who do not like risk and want to provide themselves with a constant, though not such a high income, count on a guaranteed level. Those who are willing to take the risk and believe in the management company are more focused on the boiler method.

“We don’t have any customer migration between these two products at all,” Pavlyukevich continued. — We provide guaranteed income in a limited amount: approximately 10% of the total number of rooms in the management. This is necessary for the stability of the criminal Code. The level of guaranteed income for us is 30 thousand rubles per room, when a higher yield is achieved, the difference is what the management company can earn. And in case of downtime, the management company must pay this money out of its income. To increase the guaranteed income of the management company, it is necessary to take into account all factors and risks, especially if it acts as an independent unit and cannot count on the help of a developer. It is important not just to strive to increase income, but to make thoughtful and balanced decisions that take into account all possible consequences.

— In modern projects, we focus on infrastructure development. For example, this summer, an updated terrace with views of the capital and bar service was opened on the 13th floor of the YE’S Technopark Moscow apart-hotel. In addition to the equipped coworking, a business center has been launched, occupying ten floors of the TECHNOPARK PLAZA IFC, and a shopping gallery on the first two floors — with shops, cafes, restaurants and a food hall, says Judita Grigaite. — In addition to a more targeted and enhanced promotion strategy, we have begun to actively develop an affiliate program. It already includes more than 20 large companies providing discounts and services for our guests. Last year, the organization of educational and entertainment events at YE’S Marata started, which have now spread to other apartment hotels in the chain. Such work brings visible results: up to 30% of our guests return — and more than once.

Escalation of the struggle

Vyacheslav Batakov believes that difficult times lie ahead: statistics already show a drop in sales for all key players from St. Petersburg and Moscow. The lack of mortgages in the apartment segment and the intensification of the struggle for investment projects are affecting.

— As for our company, we are looking at foreign markets and launching three apartment hotels outside the Russian Federation. They are successfully sold because 7% or 9% of the yield in rubles and in foreign currency are still different things. And I think that some of the customers will go there irrevocably. In 2024, 11% of our customers “transferred” — that is, they transferred money and investment products from the apartment segment in Russia abroad. In 2023, this indicator was even more serious. In general, the apartment segment as a product is still underestimated in Russia, and the task of all market participants is to educate and civilize our client. Unfortunately, our research among investors has shown that so far their knowledge in this area is extremely insufficient, and our managers have to explain in detail the specifics of different types of income accrual.

The expert also stressed the growing trend towards the infrastructure component and certification. The company’s analytics indicate a tightening of the struggle in the market and an increase in the demands of investor customers for profitability, and guest customers for services and comfort, so that the struggle of brands will escalate.

— Three or four years ago, apart-hotels in St. Petersburg and Moscow competed mainly with daily apartments, and compared to hotels, their advantage was only the presence of a kitchen, — Batakov continued. — Now this is far from the case: the client now wants the entire infrastructure: a restaurant downstairs, additional services, and not just a laundry, but a professional dry cleaning service. And I also completely agree about events: it is no longer enough to build just a point — you need an adjacent territory for events, both in summer and winter. I think the market will follow the path of the USA, where the line between classic and apartment hotels is already blurred.

— Our company will open two more apartment hotels in the coming years, – Elena Yekhlakova added.I assume that sales will go well due to the fact that the indicators of our management company in the St. Petersburg market today are among the best. We provide a report to the owners on a monthly basis, and anyone who wants to buy a unit can preview how our current facilities work in terms of monthly income and costs. And as for the rental business, I think that the next six months will be no worse than the first half of the year. As for 2025, at least six months in advance, it is possible to predict the approximate retention of the load and the average price per night at the same level.

— Today our main task is the implementation of the project “PRO Youth” on Bolshevikov Avenue, taking into account all the mistakes made in the first project, — said Marina Pavlyukevich. — Now we are busy preparing the infrastructure and environment for the guests. It is planned that this four-star apartment hotel will become our flagship facility — we will introduce it in early 2026. Now we are in search of new land plots, new partners and we do not plan to stop. I believe that we have already occupied our niche in St. Petersburg, but we are looking further, higher and deeper.

— Competition among large companies has always been continuous, and in the future, with the increase in the number of apartment hotels in megacities, it will really escalate, – shared Judita Grigaite. — In the near future, we are going to carry out an “upgrade” of our brand and, as part of this, update the visual design style of the complexes themselves. In modern conditions, it is extremely important for a company to constantly develop, closely monitor market perceptions and invest in marketing. Our strategy includes not only upgrading services and raising service standards to meet the expectations of guests and owners, but also competent promotion.

Photo: iStockphoto.com/Tero Vesalainen

Источник: www.fontanka.ru