Property development investment continues to look to Branded Residences as one of the most attractive products of the moment. With a growth of more than 170% over the last decade, “the new luxury” is a solution perfectly adapted to the hotel industry. Branded Residence communities are real estate developments that leverage a prestigious partner brand to open up new possibilities for investment, and serious references abound, including the report we’ll look at today: “Branded Residences, Latest market themes and outlook 2022” from real estate consulting group Knight Frank.
The trajectory of this product, brought to the world stage by large conglomerates like Marriott, Four Seasons and Hyatt, began with selling apartments or villas to individuals within their facilities so owners could use them for short or long periods at any time of the year while enjoying premium hotel services. As time has passed, however, the field has become populated not only with leading companies in the hospitality sector, but also other exclusive brands from different sectors. Clients invest in a project with which they identify because they share the values of the brand and enjoy exclusive benefits. To get an idea of its growing scope, we can look at the luxury property sector, where fashion houses like Bulgari and automotive brands like Lamborghini have their own residential projects. The reception of these property development investment projects among their customers has been enthusiastic.
A concept whose definition remained elusive until just a few years ago has today become more than 400 Branded Residences projects throughout the world. Wherever a real-estate business has been backed by an exclusive brand, its loyal customers have shown they are willing to move in, remain faithful to a proposed lifestyle, and even spread the word as great brand evangelists.
According to Knight Frank data, 39% of the people they interviewed overall are willing to invest in Branded Residences, with this percentage rising to 45% and 43%, respectively, in Australia and Asia. For these buyers, the main motivation is the services associated with their property, which can include, for example, full hotel service, 24-hour security and surveillance, premium brand loyalty packages, property maintenance, and many others.
In their research, Knight Frank found that clients were willing to pay between 25% and 35% more than for a conventional property because of the high profitability derived from their amenities, complementary services, investment potential and exclusivity.
These studies suggest that property development investment in Branded Residences will continue to grow, further segmenting the luxury market and offering unique added value to those who want to make a residential project a statement of intent. The importance of partnering with a property developer that understands this concept and the target market cannot be overstated; experience is required if you hope to bring your investments into the sphere of the high-net-worth market seeking privileged services in real estate.
