The Evolution of Branded Residences
Branded Residences first appeared on the scene in New York in the 1920s, when the Sherry-Netherland Hotel opened its doors in Manhattan. A century on and the sector has seen immense growth.
It was during the 1980s boom years that demand gathered momentum for branded homes, traditionally a hotel-led development with integrated residences. Four Seasons was a trailblazer in North America with its first residential project in Boston, while in Asia it was the brand beloved of the elite, Aman, that debuted the famed Amanpuri in Phuket.
Both groups remain leaders in the space. Four Seasons currently operates 39 branded private residence properties around the world and remains bullish on the trend, with three quarters of future Four Seasons projects set to include a residential component. Aman on the other hand has chosen to maintain a limited, albeit exclusive portfolio of just six projects, with two more planned. Other active hotel players in the segment include Ritz-Carlton, Mandarin Oriental, One&Only Resorts and Rosewood, while a plethora of luxury brands as diverse as Versace, Porsche and Armani have teamed up with developers to launch signature projects.
The growth in branded residences shows no sign of abating. Around the world, the trend of starchitects, hotels and fashion brands lending their names to new development projects is firmly on the increase. Today, your chic super villa on the Turkish Riviera - one of the latest hot spots - is as likely to be branded and ready to buy as are the more usual suspects, the midtown Manhattan apartment or the beachside Miami condo.
While its true that North America still boasts the lion's share of branded residences, an astonishing 32 percent of the global market, concentrated in New York, Miami and Los Angeles, it’s Asia where the trend is really taking off, particularly in Thailand and Indonesia. Buyers in these emerging markets are looking for trust and a safe marque to protect their investment.
And while branded residences attract a price premium, typically around 30 percent, they typically hold their value for resale. “We continue to establish new pricing benchmarks and are able to command figures around 30 percent higher than our direct competition,” says Mike Crawford, Four Seasons president of portfolio management and owner relations, according to the Financial Times.
The highest markups are seen in Bangkok, where buyers will pay more than 60 percent extra for a branded development compared to a non-branded development.
Income from the development’s rented pool is another added plus. When not in residence, owners can hand the asset over to fully realise the yield potential. It is this in-built yield potential that is perhaps most appealing to buyers. Roz Colthart, Sales Director at Soneva Jani in the Maldives says the investment potential varies depending on the size of the villa purchased. “Our villas provide on average 4 percent cash return per year – this together with the value of your vacation each year adds up significantly,” says Roz.
With hotel services on offer at the touch of a button, the benefits for owners of these prized properties are numerous: trust in development quality and delivery, especially important in emerging markets, high-quality, on-demand services such as concierge and housekeeping, building maintenance and management that ensures value, along with the rental pool and investment yield potential to offset maintenance.
The ultra-luxury condominium market is performing strongly, with the hotel brands attached to projects acting as a guarantee for high levels of service, quality and ongoing management and oversight, which adds a lot of value for buyers.
It is precisely these value-adds that contribute to the price premium seen in the market over comparable developments, but which also add to the strong resale values available.
Price premiums are certainly location driven between different global destinations and also within particular locations within cities. In many cases branded residence do not adhere to localised comparables and in many cases ‘re-set’ the market.
Increasingly operators are looking at the experiences on offer, as well as the services, as a way of tempting buyers. No longer is concierge, a pool and spa enough. W Hotels has led the way in this arena, offering celebrity-chef restaurants, bars and nightclubs, attracting visitors and locals alike, while Six Senses focuses on health and wellness.
The search for service, security and quality will continue to drive demand for branded residences. Given their hassle-free ownership, in-built returns and superlative service, it’s clear branded residences are here to stay.
A look at the world’s top five most gorgeous branded residences
Amanoi’s curved pavilions are set dramatically into densely forested slopes overlooking boulder-strewn sands of Vinh Hy Bay. This swathe of superlative super villas set against a diverse natural landscape forms a dramatic backdrop to induce meditative beachside calm.
The vision of world-leading architect Jean-Michel Gathy, the residences meld modern elegance with traditional Vietnamese style. Each residence is a resort in microcosm: four- or five-bedroom pavilions clustered around an infinity pool with free standing living and dining spaces linked with wooden decking.
One&Only Mandarina Private Homes Collection, Mexico
Secluded among lush, tropical landscape lies an extraordinary collection of villas designed to harmonise with the surrounding jungle. With absolute privacy as paramount, these private homes have been positioned along the mountainside and among the trees to maximise sunlight, seaside vistas and a singular living experience.
Layan Residences by Anantara, Phuket
Layan Residences by Anantara is a luxury residential villa development overlooking breathtaking Layan Beach, along Phuket’s serene sunset coast. The boutique collection of 15 spacious and uniquely designed private pool residences are surrounded by a canopy of rainforest on a tree lined hillside with panoramic views of the Andaman Sea, enhanced by a host of bespoke experiences, available exclusively for owners and their guests.
Alila Koh Russey. Cambodia
Just 15 minutes by boat from the Cambodian coast, the Koh Rong Archipelago is an entire world away. This stunning coastline with dramatic headlands, powder sand beaches and tropical forest beckons as the emerging Cambodian Riviera. The swish villas are dotted among this ecological escape, infused with Khmer culture and frontier charm.
Capella Estate Residences Maldives
Opening in late 2020, the Capella Maldives will launch their estate residences alongside the integrated island community. Each mansion will be curated to the owners individual taste, with design know-how courtesy of a stellar team which includes Japan’s Kengo Kuma & Associates, André Fu’s AFSO from Hong Kong and Lebanese-based Vladimir Djurovic. Expect timeless architecture in a hideaway island oasis.
Luke is the founder of London-based Icon Private Residences (www.iconprivateresidences.com), a global platform connecting discerning international buyers with developers of the most exceptional properties in the world’s most sought after locations.