Madrid: City for Branded Residences
It is no secret, the prime residential market in Madrid is in vogue, resonating with investors and buyers both nationally and internationally.
By Daniel Caprarin and Cristina Ocaña
In their dynamic evolution in recent years, prime homes in the Spanish capital have attracted increasingly diverse buyers in terms of their nationalities. In addition to the constructive beauty and quality of the finishes they value, the amenities factor has become increasingly relevant, with the lifestyle and wellness increasingly appreciated by homeowners.
As a result, branded residences have burst onto the market, offering exclusive services that elevate the experience of living in the capital and meet the needs of this new demand centered on amenities. Four Seasons, catapulted the Madrid brand into the international sphere, generating such a significant impact that it completely transformed its area of influence.
It has been approximately 8 years since then and, since then, the prime residential market has done nothing but consolidate, anticipating an increase in the stock of this type of housing, accompanied by a growing interest of buyers that transcends borders.
What are the key drivers of demand for branded residences in Madrid? To provide a solid answer, from our Knight Frank Research and Analysis team we have analyzed the main factors in the prime residential market that underpin the demand for this type of housing.
We at Knight Frank anticipate that demand will be able to comfortably absorb the new branded residences that will be added to the Madrid market in the coming years.
First, we have observed the evolution of housing transactions in Madrid with prices exceeding 2 million euros (and 8,000 €/m²). In the two years prior to the pandemic, this market showed an annual average of 39 units, but in the two subsequent years, the figures have grown by more than 300%. Between 2022 and 2023, the annual average reached 161 units, suggesting that interest in this type of property is on the rise and will continue to grow in the coming years.
Another important factor we consider for the future acquisition of branded residences is the evolution of global wealth, i.e. future demand capacity. At the end of 2023, the global population of Ultra-High-Net-Worth Individuals, or UHNWIs for short, experienced a growth of 4.2% compared to the previous year. This equates to almost 70 new high-net-worth investors every day, bringing the total to around 626,600 individuals globally. North America and the Middle East lead this growth (at 7.2% and 6.2% respectively), while Europe remains home to approximately 1% of these investors.
In addition, the population of high-net-worth individuals (1 million euros and above), HNWIs, is expected to grow by 57% between 2022 and 2027, totaling some 40 million new individuals worldwide. In Spain, this figure is expected to grow by 40% over the same period, reaching a total of 2 million individuals by 2027, indicating an expanding market of potential buyers.
Backed by these factors, Knight Frank anticipates that demand will be able to comfortably absorb the new branded residences that will enter the Madrid market in the coming years. It is worth remembering that as the market evolves, so do the expectations of what a home can be, inviting you to dream beyond the conventional.
From brand to experience
Whether associated with a hotel brand offering five-star services, or independent (standalone) developments backed by these same chains, designers or renowned firms -from fashion to automotive-, opting for a branded residences is to immerse yourself in an environment where every detail transforms the everyday into the extraordinary, as promised by SLS Madrid Infantas Residences, "home to the extraordinary." Backed by the SLS brand, from the lifestyle Ennismore hotel group, this project redefines urban luxury with more than 2.2,000 m² of common areas and first-class spaces, such as the swimming pool in the rooftop with panoramic views, SLS Social House, state-of-the-art gym, accompanied by a long list of essential services and others on demand - private transportation, personal shopper, personal stylist and event organization, among others-.
For its part, Padilla 32 is a 1948 building. It will be masterfully restored by architect Julio Touza and will sublimely combine history and modernity. In addition, it will retain its classic character but renovated to offer a contemporary living experience. With spacious terraces, private gardens and a first-class spa, this place will invite you to find tranquility in the heart of the Salamanca neighborhood, where every moment will be an opportunity to reconnect with the essential.
Undoubtedly, the branded residences market continues to expand globally, driven by a growing demand for high standing residential experiences that integrate five-star services and a recognized brand identity. This segment, which initially developed in traditional high-net-worth markets, is now rapidly expanding to new cities and emerging destinations, attracting both international investors and owners seeking exclusive residences with personalized services. The combination of supply and demand allows us to foresee sustained growth in the coming years, especially in regions such as Asia-Pacific, the Middle East and Europe. In this context, Madrid is positioned as a key point in this global trend, standing out for its growing attractiveness in the prime market and the arrival of new branded residences projects, which integrate perfectly with its vibrant cultural and social scene.
Photos: Dmitrii Eliuseev, Leyre, Julia Solonina, Bernardo Mestre.