The shortest answer to the question
"What are branded residences?" is that they are a partnership between a brand and an investor, i.e. they are luxury properties associated with a premium brand that provides prestige and recognition in addition to the services they offer to their owners. The key components surrounding the branded property are the emphasis on
sophisticated design and architecture, as well as the high quality of services and accompanying amenities available to tenants of such facilities. In many cases, the brand manages and services residential properties under an optional or mandatory rental program.
The idea of branded
apartments first emerged in 1920, when
Sherri-Holland became the first hotel complex in New York to offer fully furnished luxury apartments overlooking Central Park. In Asia, the first branded apartment project was built in 1988 in Amanpuri, Phuket, a famous resort in Southeast Asia.
Although the idea is not revolutionary, the branded apartment segment is currently undergoing significant changes. In recent years, there has been increased interest from investors and hotel owners who are looking for ways to incorporate branded apartments into mixed-use projects. There are more than 800 branded residences in 64 states in over 180 locations. The branded residence segment has grown significantly over the past decade, and the number of brands has more than doubled, but hotel brands still dominate.
Why brand a residential project?
The synergy between hotels and condominiums can enhance the overall experience for both guests and condo owners.
Brand awareness and reputation help investors stand out in the market and offer a new concept.
Well-known brands can have a positive impact on the location itself, which additionally affects the positioning of the chosen destination. In other words: If a leading luxury brand chooses to "fly the flag" in a particular area or region, it can significantly improve the market's perception of the location. This in turn creates a platform on which it is possible to build a world-class tourist offer and attract other brands and more affluent tourists. Since there is a strong correlation between repeat visits and the tendency to buy property in a particular location, attracting wealthier visitors generally leads to an increase in
property sales in that location.
Key players and trends
We live in a world of brands. Modern society tends to choose a particular brand. Customers develop affiliation and loyalty over time, and the brand becomes recognizable and desirable. So, the story is already written and investors will not spend a lot of time and money on
marketing.
Hotel chains such as
Marriott International (Ritz Carlton and St. Regis), Four Seasons and Accor (Fairmont and Banyan Tree) are leaders in the branded residences segment. Residents of such complexes have access to the same amenities and services as guests of these hotels.
Although
hotels account for
86% of branded residences, recent years have seen a significant increase in investments in this segment by companies from the automotive or fashion sectors, such as the projects of
Aston Martin, Porsche Design, Armani, Versace, Fendi, Missoni or Philippe Starck.
Branded apartments are found in the luxury apartment segment, and the target audience are buyers who are usually very wealthy individuals. These units can be used as primary or secondary residences, depending on the location. Indeed, branded residences for primary use are most often found in urban areas, while properties used as secondary residences are more likely to be found in vacation spots.
In addition, the more flexible way of working caused by the Covid 19 pandemic has influenced the increase of free time, but also the possibility of choosing a place to live and work. This trend has continued after the end of the pandemic, and the increase in people's wealth in recent years continues to contribute to the development of branded residences.
Advantages of branded residences
Brand association and the improved services in branded residences provide investors with better rental income compared to high quality but non-branded residential projects, as they usually generate a higher return on investment.
In markets where the supply of higher quality construction is saturated, investors specifically brand their projects so that the association with the brand and the quality that comes with it sets their property apart from the competition, speeding up the sales process.
The end users of branded residences are buyers for whom this is a guarantee of quality, and sometimes it is also the purchase of a "trophy Residence”.
Branded residences offer a higher quality and upscale lifestyle with comforts and amenities such as access to concierge services, spa facilities and a variety of a la carte services offered by the brand. They also enjoy owning a property without having to worry about maintenance and security.
Conclusion
As a new concept in the luxury housing segment, the demand for branded residences will gain strength in the coming years. The beginnings of interest in these properties are closely linked to hotel brands, and their strong presence has developed in certain markets such as America and Asia.
Today, brands from other sectors are also developing independent residential projects under their own brands. Given recent trends in the real estate market, this type of housing is expected to become an increasingly integrated business model in all parts of the world, achieving significant growth in the European, African and Middle Eastern markets in the coming years.
