The rise of branded residences
Luxury brands have traditionally been associated with what one wears, such as fashion and jewellery; or one with what one drives in the case of automobiles. These days, however, top luxury brands are being added to our living spaces with the rise of branded residences. How did this start and why has it become a growing trend?
The concept was born in New York, according to Knight Frank’s Global Intelligence Hub, when The Sherry Netherland Hotel in Manhattan opened its doors in 1927. Although it was not called a branded residence then, it embodied the essence of a property associating with a known luxury brand to offer a premium living experience for guests or residents. Since then, the concept has evolved and grown.
It was in the early part of the 2000s when several large-scale hotel branded high-rise residential towers entered the market. Marriott International opened its first branded residences in 2000 under the Ritz-Carlton brand when it launched a residential property in Washington DC. It then expanded its portfolio extensively throughout the globe, with the likes of Starwood, Fairmont and the Accor group following suit.
Since then, branded residences have carved out a niche in premium property developments all over the world.
International property consultant Savills, in its Branded Residences 2021 report, says that the past decade has seen the number of branded residences increase by 230 per cent, adding more than 500,000 units across 356 schemes across the world. According to the report, the market for branded residences will continue to grow moving forward, with brands and property developers eyeing new locations to grow their portfolios.
Industry experts say that branded residences are growing primarily because of its promise of a premium lifestyle, assuring owners or residents of a high-level of service and exceptional amenities that go above and beyond traditional premium offerings. Those looking at it as an investment can leverage the property as a potentially profitable asset, for either rental or sale.
For developers, it is a key differentiator in an increasingly competitive real estate market, as well as a means to increase their customer base as luxury brands are known to have a loyal customer base who have high levels of disposable incomes.
As for luxury brands, the rise of branded residences gives them the opportunity to earn income from licensing fees, while strengthening their brand through expansion in a highly profitable industry such as real estate.
It’s a win-win situation and will only fuel the growth of the branded residence market globally. According to Savills’ report, “Brands have spread rapidly into other global regions, particularly in Asia Pacific and the Middle East where economic growth and rising domestic wealth have supported expansion over the last decade.”
The United States remains the single largest country market, with almost 200 branded schemes, while Thailand and the UAE are the next biggest markets, with 42 and 39 completed schemes, respectively, as per the report’s findings.
Leading the charge
In the UAE, DAMAC was one of the pioneers in developing branded residences for Dubai’s real estate market. Renowned for its luxury lifestyle and premium property developments, the emirate is the ideal breeding ground for the development of branded residences, with DAMAC offering some of the most exclusive partnerships with highly sought-after lifestyle luxury brands.
Among DAMAC’s most notable development in the branded residences space is the Cavalli Tower, the world's only Cavalli-branded residences, which features impeccable styling with its Cavalli interiors and stunning views of Dubai’s iconic projects such as the Palm and the Burj Al Arab. Building on this partnership, DAMAC also features Just Cavalli branded luxury villas over at its DAMAC Hills Development.
Dubai’s leading property developer has also partnered with luxury watch and jewellery brand de GRISOGONO for its Safa One and Safa Two branded residences project.
Other developments, such as DAMAC Hills, feature not just the Trump Estates and Residence, but also a hotel property in association with the prestigious Radisson brand. Consolidating its foray into the branded hotel residences sub-segment, DAMAC likewise partnered with a regional hospitality brand powerhouse for the DAMAC Towers Arjaan by Rotana project. Its crown jewel in this space is its five-star hospitality property, Paramount Hotel Dubai. The venture was so successful that another Paramount Hotel was opened just this year in Business Bay — Paramount Hotel Midtown.
Keen to establish itself in the global market for branded residences, DAMAC Tower Nine Elms in London features interiors by Versace Home. The company is also planning a second Cavalli-branded project in Miami.
Now a proven formula, the success of branded residences will continue. Opportunities are ripe for new collaborations as developers and luxury brands establish partnerships to differentiate their offerings to appeal to discerning potential buyers. Expect not just new tie-ups to unfold, but also exciting new concepts that will further raise the standard for luxury lifestyle living in key cities across the globe. For developers and luxury brand owners to succeed, an understanding of local markets, careful buyer targeting, and brand alignment will be key to owning a bigger piece of this ever growing and increasingly competitive market.