Are Branded Residences The Ultimate in Luxury Living?

Branded residences have always been popular with the jet-set crowd. Once known as private retreats of rock stars, novelists and politicians, they were places that one could go to escape the outside world while enjoying a life of luxury.

In recent years, the concept has also piqued the interest of investors, property managers, hotel owners, luxury developers and marketers. This is because, in the last decade, the number of branded schemes has grown by 198%.

In addition to well-known hotel brands like Ritz Carlton, Waldorf Astoria and St. Regis growing their global residences, non-hotel luxury brands such as Fendi, Baccarat and Aston Martin are also making a mark with their own expansive portfolios in the most exclusive city postcodes.

Today, there are around 700 branded residences across the world, with the same number again scheduled for completion by 2030.

So, what is a branded residence and why are they so popular? Let’s take a closer look at everything you need to know about these properties.

What are Branded Residences?

A branded residence is a property often associated with an exclusive luxury brand. The brand could be a Parisian Haute Couture fashion house, a prestigious automobile manufacturer, a key figure in popular culture or a five-star hotel group.

The modern and elegant residences offer a prestigious blend of luxury living and exclusive amenities, and coupled with an unblemished brand reputation, they become an attractive proposition for investors, property managers and luxury developers.

Currently, the most popular locations for branded hotel residences are Miami, Dubai and New York, although Asia Pacific, the MENA region and Latin America, in particular Mexico, has a high percentage of pipeline properties.

What is the Branded Residences Definition?

According to Paul Tostevin, Head of Savills World Research, there are three physical forms of hotel branded residences.

1. Co-located: Residences that are branded and located next to a hotel.

2. Condo hotel: Where both the hotel and residential component sit within the same building.

3. Standalone: A branded residential building without the full-service hotel aspect.

Why are Residence Brands Experiencing Strong Growth?

There are several drivers behind the recent growth of these types of residences. The first is the emergence of key players in the hotel industry beginning to focus on branded hotel residences. The three hospitality brands below are just a few behind the global expansion.

The Best Examples of Branded Residencies Currently Experiencing Growth:

Ritz Carlton Residences come with a dedicated concierge service, fine dining, VIP access to amenities worldwide, private owners-only pools, fitness centers, screening rooms and spa services.

Waldorf Astoria: With the ongoing success of its U.S. projects, in March 2024, the luxury hotelier announced plans for its first standalone project outside the country. The residences, to be located in Downtown Dubai, will be designed by Carlos Ott Architects and they are scheduled to open in 2028.

St. Regis Residences: The St. Regis branded residence amenities include spa-inspired baths, gourmet kitchens and exclusive wellness, fitness and entertainment access. St. Regis Residences Dubai is set for completion in 2025, and in just the first hour of launch they had sold 70% of the 232 units.

The success of such residences is also determined by their choice of brand partners, some of which include:

• Luxury Car Brands: Aston Martin, Porsche, Bentley and Mercedes.

• Fashion Houses: Bulgari, Armani, Missoni and Versace.

• Other well-known consumer brands: U.S. media company Conde Nast and Equinox gyms.

• Award-Winning Interiors designed by Philippe Starck, Yabu Pushelberg and Jade Jagger.

• Starchitects: Celebrated architects with star value such as Frank Gehry and Cesar Pelli may assist with architectural designs and brand aesthetics.

The backstories of residential brands are also often exciting and newsworthy, thus helping to promote the properties. For example, at Aston Martin Residences Miami, the buyer of the $50m Triplex Penthouse will also gain access to the last remaining Aston Martin Vulcan - the final one of only 24 manufactured, in addition to track driving lessons and a private track club membership.

Additionally, having access to a residence designed by Conde Nast – the owner of Vogue, GQ, The New Yorker and Vanity Fair publications, will almost always guarantee positive press.

How can a Branded Residence Benefit Developers?

Analysis by Savill’s shows that the average premium for branded residences compared to a non-branded product in a similar location is 35%, which can exceed to 70% in an emerging market.

Most premiums are location driven, yet regardless of these factors, the luxury living aspect continues to drive them in every destination. The increased confidence that branded residences give to investors, property managers and buyers can increase the pace of sales, and in many cases, residences with luxury branding do not adhere to localized comparables and have been known to ‘reset’ the market.

There are also benefits to greater project visibility, design and the marketing expertise aligned with a branded residential property. Access to the brand’s existing customer base is another key benefit for developers.

These benefits should, of course, be considered and balanced against the costs of brand association, including any royalty, design or commitment fees, service charges, construction costs, FF&E costs and reserve.

What are the Main Benefits for Hospitality Brands?

Hotel brands can get a valuable subsidiary from residential real estate, leading to increased annual revenue. Property owners can offset cyclical and seasonal variations and benefit from increased brand awareness in the marketplace.

Opportunities will also arise for the hospitality brand to expand and diversify into other sectors, while working with different partners. And hoteliers can benefit from a strong capital flow with limited exposure.

Are Hotel Branded Residences Good for Investment?

Absolutely. In fact, residential owners gain amazing benefits, and this has been key to driving the ongoing market demand. 

Owning a stake in a reputable hotel brand, allows owners access to luxury developments, superior services and 5-star amenities in prime locations around the world, and that is just for starters.

Many residences also have a dedicated concierge service and hotel rental schemes and loyalty programs. Owners can leave their property in the capable hands of the managing agent when they leave, rest assured that the luxury unit will be serviced and maintained in their absence. 

Investment yield potentials and strong returns on rentals can often offset maintenance costs too. And when it comes to selling the property, there’s peace of mind that the price premium will carry through to resale.

What does the Future Hold for Branded Residences?

Over the last 20 years branded residential properties have consolidated their position in the luxury real estate market. After surviving the 2008 recession, and achieving significant recent growth, it appears that the concept is here to stay.

While exclusive luxury hotel brands currently dominate the field, there may be a shift in the future to accommodate luxury living for the masses, with Citizen M and Marriotts PUBLIC Hotels promoting branded residence offers at more affordable price points. 

Proven Strategies for Branded Residences Success

We would love to help you bring your luxury property vision to life. If you’re a developer, luxury brand, hotelier or an investor interested in branding your residence, let our professional and knowledgeable team at Proven help you define your strategy.

Contact us today for further information.