Branded Residences: The future of city living?
With more than 39% of respondents from Knight Frank’s 2021 Global Buyer Survey revealing that they would be willing to pay a premium to purchase a property in a branded residence development, we look at the history and growing appeal of this premium lifestyle choice.
Branded residences are an area of the prime property market that is going from strength to strength, with one in three buyers willing to pay above and beyond for a branded residence development, according to our Global Buyer Survey. The far-reaching rise in popularity over recent years has been significant, and one thing is for certain: Covid-19 has changed the way we think and feel about the place we call home, and what we prioritise highest when choosing where we want to live.
In essence, this gives the owner the comfort and permanence of a home, but with the full benefits and luxury of a five-star hotel
Images: Four Seasons Residences, Madrid, and Twenty Grosvenor Square, London
The Global Buyer Survey found that, now, by far the most influential factors when it comes to choosing where to live is proximity to green space (68% of respondents) and good air quality (65% of respondents). There has also been a substantial rise in people looking to invest in a ‘bolthole’ second home, with 33% of respondents now more likely to purchase a second home as a result of the pandemic.
So, what exactly is a branded residence? The traditional branded concept is a hotel-like development with integrated or linked residences. They naturally benefit from the hotel brand (quality), management (smooth running) and services (luxury). In essence, this gives the owner the comfort and permanence of a home, but with the full benefits and luxury of a five-star hotel.
The birth of the branded concept can be traced back to the prolonged economic boom of the 1920s in America. The first true branded residence was the Sherry-Netherland hotel in Manhattan, opening its doors in 1927. Almost 100 years on, the sector has grown enormously and is now to be found in over 60 countries across the globe. Indeed, across the years, there is a direct correlation between wealth creation and demand for branded residences. Much of the sector’s expansion has occurred in more recent decades, with the concept really taking off in the 1980s when the Four Seasons opened condos next to their Boston hotel. Shortly after in 1988, the Aman hotel group launched the concept in a resort setting with Amanpuri in Phuket, Thailand.
Our research shows that there are now over 400 branded residences across the globe, the majority of which are hotel branded. In Europe alone there are reportedly 70 schemes currently taking place, with a further 69 in the pipeline. With the branded concept well established by hotel operators, the number and types of operators entering the space has expanded and diversified, with major brands such as Versace, Armani and Porsche having all lent their names to developments in recent years.
And why are more and more buyers willing to pay a premium for the lifestyle a hotel-led development delivers? The Global Buyer Survey distilled this growing desire into five key motives. In response to the question ‘If you were to purchase a property in a branded residence, what would be the key motive behind your purchase?’ the largest number of respondents (34%) answered service provision and amenities. 25% of people voted in favour of the development’s high-yielding income potential, with almost the same amount (23%) choosing a branded residence for its hassle-free building maintenance and management facilities. Only 10% of respondents claimed to be interested mainly for the prestige of brand identity, and the smallest number of voters (8%) for lock up and leave purposes.