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The property markets worldwide may be uncertain, but the branded residences sector is thriving. According to a recent report by Knight Frank, a leading real estate company, the sector is expected to grow by 55% by 2026.
Branded properties are the result of a partnership between a brand and a developer, resulting in residences that are sold to buyers. Examples include schemes by renowned hotel groups like The Four Seasons, Aman, and The Ritz-Carlton.
These residences are often located in desirable areas, adjacent to the brand’s hotels, and offer linked services. They are designed by top architects and cater to wealthy individuals. The biggest market for branded residences is the US, but there is also significant demand in Mexico, the UAE, Thailand, the UK, and China.
Buyers are attracted to branded properties because they provide a sense of trust and security when making an international purchase. Renting out these properties is also easier as tenants trust the brand. Branded residences offer a turnkey second home experience, designed and furnished to meet the high standards expected from a hospitality brand.
While the practical benefits are appealing, the intangible and emotional aspects of the brand are equally important. Property expert Henry Pryor explains that branded residences offer a unique perspective on real estate. Owning a branded residence is akin to owning a luxury good, evoking a sense of prestige and style.
One of the first branded property examples in the UK is One Hyde Park, which offers access to Mandarin Oriental hotel services. These properties gained tremendous popularity as the brand became as desirable as the property itself. Branded residences are now an integral part of the luxury lifestyle economy, as consumers seek brands that offer a curated aesthetic experience.
Izzy Pugh, a partner at the marketing consultancy G=mc2, explains that branded residences provide the ultimate aesthetically curated experience. Living in a branded residence grants you access to a world that is carefully designed and exclusive. Buying a branded residence ensures that you share common values and lifestyles with your neighbors, making it an appealing choice for new city residents or individuals seeking second homes.
The demand for branded residences is beneficial for developers and brands alike. People are willing to pay a premium for the designer label associated with these properties. Additionally, mass-market brands are also exploring opportunities to collaborate with property developments to leverage their brand identity.
While there may be concerns about the lifespan of brand agreements, the branded residence market continues to expand. The European market shows significant potential, following in the footsteps of Asia and the US. Saudi Arabia is particularly exciting for major players in the industry. Other brands, such as Soho House, are also expected to enter the market.
Taste is subjective, and not everyone may appreciate the aesthetics of branded residences. However, there is a considerable market of individuals who are drawn to these luxury lifestyle brands. The allure of luxury lifestyle brands plays a significant role in our society, whether viewed as shallow or not.
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This article is part of FT Wealth, a section providing in-depth coverage of philanthropy, entrepreneurs, family offices, as well as alternative and impact investment
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