The Toronto development will be located on the west side of University Avenue at the corner of Adelaide Street West. The hotel will occupy the first 17 floors of the tower. The next 31 levels will contain 279 one- and two-bedroom for-sale residential units. The top 17 floors will be built out as 73 "Private Estates." The pricing has not yet been announced.
The estimated $362.86-million development is one of several luxury hotel and condominium developments vying for buyer interest in Downtown Toronto. The largest projects include the Ritz-Carlton, Four Seasons and Trump Tower. The Ritz and the Four Seasons are under construction. The Ritz, rising in the city's entertainment district, will have approximately 267 hotel rooms and 153 condominium units. The Four Seasons will have 265 hotel rooms and 230 condo units in two towers in the Yorkville neighborhood. Trump Tower, which is in the marketing phase, would have 286 hotel rooms and 147 condominium residences.
What remains to be seen is whether the market can support all of the new hotel rooms. Industry sources tell GlobeSt.com these luxury properties likely wouldn't be built without being paired with a condominium development because the sale of the condominiums helps offset the cost of developing the hotel. In turn, the amenities of a luxury hotel in the lower floors tends to raise the selling price of the condominiums above.
Brian Flood, a Toronto-based vice-president with CBRE Hotels, says he is tracking 10 new hotels developments in the Downtown market that have a combined 2,200 rooms scheduled for completion over the next three years. The existing Downtown inventory is approximately 15,000 rooms. Half of the new development total is in the five-star category, which Flood says is really a new market for Toronto.
"The thing about these new [five-star] hotels is something we really haven't seen in Toronto until now; it really creates a whole new class of hotels in Toronto," he says. "They will command a significantly higher average rate than existing hotels, which will give existing hotels room to drive rates."
While a significant expansion within the luxury segment, the impact of the new hotel rooms on an overall basis is less significant, Flood says. He does not expect the absorption period will be abnormally long and neither do some of his clients, who are looking to construct their own luxury product in the market.
"CBRE Hotels is working on behalf of groups that are actively looking in this very segment," he says. "They obviously feel Toronto is a viable market for this type of product and that it's not currently being overbuilt."
Hong Kong-based Shangri-La Hotels and Resorts currently manages 50 hotels under Shangri-La and Traders brands, almost all of them in Asia. The company is making a concerted effort to push into Europe and North America.
In October 2005, GlobeSt.com reported that its first US assignment would be a hotel being developed in the Waterview Tower at 111 W. Wacker Dr. in Chicago. The hotel is set to open in 2009.
In February 2005, GlobeSt.com reported that Shangri-La would open its first hotel in Europe in the country's tallest building. The company leased 18 floors in the upper half of the 70-story London Bridge Tower, set to open in 2009 on the South Bank of the Thames River.
The project architects for Shangri-La Toronto are James K.M. Cheng Architects (design architect) and Young + Wright Architects (architect of record).
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