Four Seasons Hotels Inc.'s $250-million hotel-condo project in downtown Montreal should help buff the city's standing as a luxe destination.
But the five-star development comes at a time when condominium development in the mid-size city is reaching the saturation point, with a bevvy of high-end condos sprouting, not to mention the several new luxury and boutique hotels in the works, including nearby Mount Stephen Hotel.
Toronto-based Four Seasons has joined with Quebec property developer and manager Carbonleo Real Estate Inc. on the mixed-use hotel project, to be located on de la Montagne Street. The planned 163-room development will include 18 condos selling in the $4-million to $20-million range.
The project – which marks the return to Montreal of the Four Seasons chain after an absence of some two decades – calls for a direct link to the storied Ogilvy department store on Ste. Catherine Street, which is being revamped and rebranded in a merger with the local Holt Renfrew outlet.
Montreal's condo market has been aggressively built up over the past few years, with many luxury units failing to find buyers. Since 2000, only two condos priced above $5-million have been sold, according to the Greater Montréal Real Estate Board.
"It would make sense for promoters to be cautious and not inundate the market with too many projects," said Paul Cardinal, director of market analysis at the Fédération des chambres immobilières du Québec.
There are currently about 4,300 condo units under construction in the central core of the island of Montreal, Hélène Bégin, senior economist with Desjardins Economics, said, citing Canada Mortgage and Housing Corp. figures.
"The market is in surplus mode. It would be premature for developers to step on the accelerator," she said.
But Four Seasons president and chief executive officer J. Allen Smith views Montreal as a magnet for the jet-set crowd and is counting on the continued robustness of the currently thriving global luxury-hotel business.
"Montreal is one of North America's great cities – a vibrant urban destination that has long appealed to luxury travellers drawn to its European flair and cultural sophistication," he said.
Luxury hotels are doing a brisk business as demand for pampered lodging rises with the growth in the world's population of ultra-high net-worth individuals boasting assets above $30-million (U.S.).
Ringing in at about $148.6-billion two years ago, the international luxury hotel market is expected to reach $195.2-billion by 2021, according to a 2015 report by Transparency Market Research.
Andrew Torriani, the CEO and general manager of the Ritz-Carlton Montreal – which underwent its own major refurbishment six years ago that includes a condo element – says he isn't concerned over the arrival of a second five-star establishment.
Rather, he views Four Seasons' return as a welcome sign of the city's "comeback.
"This reflects well on Montreal," he said, referring to the bad patch in the 1990s when the city had no five-star hotel to speak of.
"We went through political turmoil," he said about the uncertainty following the return to power of the separatist Parti Québécois and a second referendum on sovereignty in 1995.
"The hotel industry had to re-establish itself and catch up in the 2000s."
Carbonleo chairman Andrew Lutfy said: "Our vision is to create an architectural ode to extraordinary urban living that will help redefine Montreal's famous Golden Square Mile."