“With so many brands from an ever-widening spectrum of sectors now participating, differentiation, relevance and effective positioning are crucial.”
We might see tech-branded residences – the ultimate smart homes, among several other predictions, says real estate branding specialist, Chris Graham.
Branded Residences consultant, Chris Graham predicts one day in the near future, branded residences will feature the following:
♠ The emergence of lower star-rated hotel brands:
28% of Marriott’s residential pipeline are ‘upper upscale’ brands, and Savills latest research reveals that this category now represents 22% of the total global pipeline. Expect to see it to drop another level soon.
♠ Price premiums:
Expect continuing and increasing pressure on price premiums, notably in mature markets and Tier 1 cities.
♠ Eco-friendly and sustainability credentials will feature much more prominently:
“Sustainability is the new luxury”, said former Mexican president Felipe Calderón recently. There are more and more examples of companies ‘walking the walk’ and not just talking it: e.g. globally renowned for outstanding green credentials, ITC Hotels promotes “Responsible Luxury” on its branded residences in Sri Lanka, Viceroy Residences at the Algarve’s Ombria Resort features “Sustainable Luxury”, and the world’s largest floating solar system has just been installed at a LUX* Maldivian resort.
♠ Interactive community living:
Live/Work/Play environments in modern and vibrant settings, designed around communal spaces that encourage greater interaction between like-minded residents.
♠ Greater focus on wellness:
There are numerous examples of this growing trend: Mandarin Oriental collaborated with The Mayo Clinic, Westin with Peloton and ShangriLa with Lululemon, Accor bought Banyan Tree, IHG recently took over Six Senses, and USA developer Related is building Equinox branded residences.
The use of cutting-edge technology to enhance residents’ comfort and convenience will become increasingly standard, extending well beyond basic “Smart Homes” using voice activated systems like Alexa and Google. For example, Four Seasons’ new App enables bespoke concierge/ on-or-off-site services on a mobile device.
♠ Branded ‘retirement’ communities:
These are lifestyle villages for the Baby Boomers and GenX segments, many of whom remain highly active. “There is a growing wealthy and ageing global demographic and I would not be surprised to see a move into more branded retirement and senior living residences,” predicts Adam Maclennan at PKF hotelexperts. For example, St. Regis Residences Rye is a gated community with the comforts of a five-star hotel, where at least one person in each household must be 55+.
♠ More Standalone Residences:
A relatively new phenomenon, the major hospitality brands are increasingly open to these and several are expanding their pipelines. A key reason is the challenge and cost of securing space (and planning) adjacent to their hotels in prime urban locations.
Mirroring the expansion of global wealth that has multiplied the number of HNWIs since the millennium, the growth of branded residences has been exponential, not only in terms of quantity but also locations and brands. It has been driven by wide-ranging and proven benefits for developers, brands/operators and purchasers – described as an unusual “win-win-win” scenario.
This astonishing growth over the past two decades is not expected to slow down in the foreseeable future:
♠ Between 2002-2012, the number of hotel brands increased tenfold.
♠ The sector has grown nearly threefold (198%) in the last decade.
♠ In only 2 years (2015-17), the number of hotel brands increased by 27% and is forecast to grow by a further 27% in the next three years.
“Branding real estate creates an aspirational model that reflects the prestige and kudos associated with a brand, facilitating standout in an increasingly competitive marketplace in which consumer expectations continually rise,” explains Chris Graham in his latest report on Branded Residences.
“However, with so many brands from an ever-widening spectrum of sectors now participating, differentiation, relevance and effective positioning are crucial.”
To illustrate this, he highlights how market participants have expanded well beyond traditional hotel brands, spanning a wide variety of sectors that is predicted to broaden even further:
♠ Automotive: Examples include Aston Martin Residences and Porsche Design Tower in Miami, and the Bugatti Villas and Tonino Lamborghini Residences in Dubai.
♠ Fashion and jewellery: High-end consumer brands such as Bvlgari, Versace, Missoni, Fendi, Baccarat, Moschino and Armani.
♠ Interior designers: A sizeable (and expanding) list, stars include YOO, Yabu Pushelberg, Hirsch Bedner, Pierre Yves Rochon and United Designers.
♠ “Starchitects”: Having a prominent architectural practice like WATG, HKS, Foster + Partners or Gensler involved adds value and prestige.
♠ Restaurants, such as Nobu and Hard Rock.
♠ Media / entertainment companies including Paramount, Walt Disney and Fashion TV, and publisher Condé Nast recently announced that it is entering the market with branded residences linked to its high-end titles.
“As the branded model progressively becomes the norm rather than the exception in many destinations,” comments Graham, “it is crucial to ensure that today’s buyer understands how one brand will benefit his or her lifestyle and investment ambitions over another – not least to justify the price premium which, on average, adds around one-third over comparable unbranded units.”
Many experts agree. “In an increasingly congested market, the winning brands will be those that can seamlessly manage the residential experience for both the developer and the downstream homeowner,” observes Muriel Muirden, Managing Director of Strategy at WATG. “To stand out from the crowd, brand differentiation tactics and strategies will need to be employed that have strong buyer resonance. We see this as the most vital challenge for the sector going forward.”