Branded residences are luxury
homes associated to a premium brand that offers prestige and recognition
through association, in addition to services it provides to its owners.
The key themes that surround a branded residence are the emphasis on
design, services, facilities and amenities, and architecture.List Sotheby's International Realty, Singapore
Branded residences first evolved through the partnership of luxury
residences with hospitality brands, where the brand name of a hotel is
licensed for use on the residence. The hotel operator may also form a
more intimate alliance with the developer to provide a full range of
services and activities, which are usually available to hotel patrons.
In light of new entrants in the market, the meaning behind branded
residences has taken on an expanded definition in recent years. By
marrying residential real estate with luxury fashion brands, jewellery
and automotive brands, new forms of branded residences have evolved.
Branded residences are unlike hotel residences. Hotel residences are
usually hotel rooms that have been set aside for sale by the developer
on a sale-and-lease back agreement. Hotel residence hence, is an
investment product and the owner has limited use, for example, four
weeks in a year. For the rest of the year, the hotel operator leases out
the unit and the income will be shared with the unit owner. A
hotel-branded residence, on the other hand, is either a stand alone
residential development that owns the right to be associated with the
hotel brand for a period of time, or as part of a mixed-use development
which comprises a hotel (the same brand it is associated with), the
residence and other uses such as a retail mall and/or office tower.
Both hotel-branded residences and hotel residences are managed by the
hotel, allowing residents to benefit from the use of hotel services,
facilities, amenities and security. Investors are typically attracted by
these qualities as well as the prestige and recognition associated with
the trusted hotel brand. With the luxury status accorded to a branded
residence, it is usually able to to fetch a premium above non-branded
prime residential developments.
The branded residences concept is believed to have started as early
as the 1920s with Sherry-Netherland Hotel in New York which successfully
operated its serviced apartments alongside. However, it was not until
the 1980s when The Four Seasons Hotel successfully sold its Four Seasons
Place condominiums that the prestige of brand association became
Four Seasons then established its global presence through the
purchase of the Hong Kong-based Regent International Hotels portfolio in
1992. The Ritz-Carlton followed suit and by the turn of the millennium,
other leading hotel operators such as Starwood, Fairmont, Kempinski, St
Regis, Mandarin Oriental and others also entered the market.
In Asia, the branded residence concept took off in 1988 when the
first Aman resort, Amanpuri in Phuket, was launched. The private
residential villas were originally launched below US$1 mil (28.8 million
baht). Today, latest figures indicate they are valued in excess of
US$10 mil. The Aman brand itself has also expanded internationally, with
33 properties worldwide today, making Amanpuri a true global branded
Although branded residences have been around for nearly a century, it
was only since the 1980s that the hotel branded residences market has
grown significantly. Fueling demand is a confluence of factors such as
increase in population of high-net-worth (HNW) individuals worldwide,
growing wealth in emerging markets, evolving consumer trends and an
elevated desire to live in mixed-use communities with a rich offering of
amenities and services.
The acquisition of Starwood Hotels & Resorts by Marriott
International in 2016 brought together 30 leading hospitality brands.
With this, Marriott’s global footprint has more than doubled in Asia and
the Middle East and Africa combined.
The Branded Residences report released in September 2018 states that
North America is the largest market for branded residences with a 32%
share, followed by Asia Pacific at 30% and Europe at 13%. Among the
brand operators, Marriott International, through the brands of The
Ritz-Carlton, St. Regis, W Hotels, The Luxury Collection, EDITION,
Bvlgari and JW Marriott, has the largest portfolio worldwide (Figure 1).
The Branded Residences report mentioned that there are some 406
branded residence schemes accounting for a total of 55,000 residential
units. Interestingly, the largest individual brand by the number of
schemes is not a hotelier, but YOO, a brand built on design credentials.
The Ritz-Carlton takes the second place while Four Seasons comes in
third (Figure 2).
Evolution of Branded Residences in Southeast Asia
In Southeast Asia, following the success of Amanpuri, the launch of
Four Seasons Chiang Mai in 1995 introduced Thailand’s first branded
residences in collaboration with an international hotel chain. Over the
past two decades, branded hotel chains continued to develop and has
remained the most dominant form of branded residences in the region
Two of the upcoming branded residences are The Residences Mandarin
Oriental, Bali and YOO8. The Mandarin Oriental hotel and residences will
occupy approximately 5 percent of the 150-hectare piece of property
that makes up Bukit Pandawa Resort & Golf. The entire development is
situated at the southern tip of Bali, on a clifftop that offers a
breathtaking view of the Indian ocean. Estimated to be completed in
2019, it will comprise an 88-room hotel and 91 standalone villas which
form The Residences. With prices beginning from US$650,00, each villa
ranges from 180 sqm to over 1,800 sqm in size and comes with a full
YOO8 serviced by Kempinski features not one but two power brands –
international design studio YOO founded by John Hitchcox and Philippe
Starck and Europe’s oldest and most established hotel group, Kempinski.
YOO8 serviced by Kempinski is part of 8 Conlay by Malaysian developer
KSK, and features interior concepts by Steve Leung and Kelly Hoppen of
YOO studio and in-house services by Kempinski. Situated in the heart of
Kuala Lumpur City Centre or KLCC, which is Kuala Lumpur’s most
prestigious neighbourhood, its two residential towers are set to become
the world’s tallest spiralled twin towers upon completion in H2 2020.
The 62-storey Tower A has 564 branded residential units and the
57-storey Tower B has 498 branded residential units.
Prices of Branded Residences in South East Asia
Collaboration between Developers and Brand Operators
The strong growth of hotel-branded residences did not go unnoticed by
the worlds of fashion and interior design, two markets closely
associated with luxury homes. In recent years, there had been numerous
partnerships between outstanding fashion designers and established
homeware brands, who thrived on consumers hungry for a complete
The branded residence sector is experiencing a renaissance as
developers attempt to reinvent the concept of the residential
development by marrying the best of hotel and other services into a
residential project. This ingenuity appeals to savvy buyers who are
looking to buy into the latest trends.
The key selling point for a branded residential property is the trust
associated with buying a well-known brand. For some, the known brand
gives confidence in the delivery of the development and its ongoing
management. For others, the design aesthetic of a branded luxury
development is the main draw. Ultimately, the goal is to curate and
allow their customers to experience and live the brand values.
The fashion brands which caught on include Armani, Bvlgari, Hermèsand
Versace. These brands are usually involved in the design and fit-out of
the apartment or villa with home furnishings that are unique to them.
Fashion brands are not involved in the ongoing management of the branded
residence but will offer residents the exclusivity and experiential
lifestyle accorded to the brand. For example, in addition to the
privileged access to all services of Bvlgari Hotel, residents of Bvlgari
Residences will enjoy the exclusive services of an art curator,
personal shopper, personal trainer, wine sommelier, florist and an
In the past decade, real estate developers have also been
collaborating with elite car marques to mastermind residences that allow
buyers to enjoy elements of their favorite luxury auto brands, even
when they are not on the road. This shows that the high-end automotive
world has stepped up to the forefront to think beyond four wheels and an
engine with a view to provide their customers with “lifestyle packages”
that reflect the image of what they choose to drive. The Porsche Design
Tower in Miami has a specially-designed lift that whisks the luxury car
to where the apartment is and doubles up as a glass display case for
the owners’ prized automobiles. The development also offers a Car
Concierge service for residents to carry out regular maintenance, car
wash and tyre rotations for their fleet of luxury cars.
Figure 4 lists some of the branded residences which are associated with fashion and automotive brands.
Another interesting collaboration is one initiated by lifestyle
magazines. In 2003, Esquire magazine was looking for a way to
organically integrate their advertisers in a way that will lift their
products off the page and into a real-life environment so guests can
experience them. The Esquire Apartment has since become an annual
collaboration between Esquire magazine and world famous interior
designers as well as other global brands to create the ultimate
experience of a luxurious lifestyle.
One of the high profile projects by Esquire is the 2011 Esquire
Ultimate Bachelor Pad in Brooklyn’s landmark Clock Tower. This is a
6,813 square feet triplex apartment which has an open-concept living
area, 11.5 rooms including three bedrooms, four baths, a recreational
space, sky-roof cabana and open deck which offers spectacular views of
New York city - from the Verrazano Bridge to the Empire State Building.
Each room represented a variety of lifestyle touchpoints for the 21st
century man as seen through the eyes of some of the most talented
interior designers in the industry, including Shelley Starr for Hugo
Boss (Great Room) and for Don Julio (Tequila Bar), Campion Platt for
Ermenegildo Zegna (Master Bedroom), Denise Kuriger for ASICS (Home Gym),
Marc Thorpe and HUSH Studios for Acura (Study), Luxurious Animals and
Poltrona Frau Group for Lufthansa (Digital Loft), SFA Designs for Conrad
Hotels & Resorts (Rooftop Terrace), and Brooks Atwood of POD
Design+Media (Esquire Bar).
The apartment was sold in early 2017 for US$15 million, setting a new
record for the borough’s condo market. Even though the Bachelor Pad was
sold five years after the campaign period was over, the publicity it
received as an Esquire Apartment left a lasting impression in people’s
Price Premium of Branded Residences
A brand is a stamp of quality recognised and cherished by buyers,
whether it is a hotel brand, an automotive brand or a fashion brand.
Brand-awareness means that the residential property enjoys greater
recognition and a wider target market. Location is key, which is why
branded residences are usually located in prime residential enclaves or
resort destinations. Other important drivers of the price of branded
residences include the limited supply, first-class facilities and
high-quality services offered, the professional property and rental
management, and the environment of like-minded people. As such, buyers
and investors are willing to pay a premium for a branded residence.
It was estimated that a branded residence achieved an average premium
of 31%. This premium is optimised in less mature or emerging property
markets where local supply cannot sufficiently cover the needs of HNW
buyers. For example, the current prices of The Ritz-Carlton Residences
in Bangkok was purported to have fetched a premium of 80% or more
compared to a non-branded development in the vicinity during its launch.
In Europe, premiums for branded residences in resort locations range
from 20% to 45% even though the take-up rate is slower compared to
non-branded developments. Over in Dubai, the premium stands at 38% and
in Miami, 32%. However, lower premiums are achieved in more matured
markets where luxury stock is already of a high quality. For example,
buyers in London can expect to pay a smaller premium of just 8%, and in
New York, some branded residences have to offer discounts up to 15% to
effect a sale.
Challenges faced by stakeholders
The branded residences model offers great benefits for both
developers and investors. The right brand affiliation can significantly
boost sales prices, lifting the developer’s profit margin. The benefits
to private investors differ depending on their motivation, be it value
creation, bespoke unique services, distinguished design or the assurance
of security, prestige and hassle-free holidays.
For a brand to make a successful foray into real estate, the brand
must translate clearly and recognizably into the project. it has to be
one “that people associate with not only luxury but a certain type of
lifestyle that people can relate and aspire to,” said Jon Paul Perez,
vice president of Related Group.
For a branded residence to become a reality, the partnership has to
be chosen with care. Beyond the glitz and glamour associated with
branded residences, there are several obstacles that could potentially
affect the viability of such developments. Prized as a project that is
an expression of grandeur, the expectations for the quality of the
end-product – be it the design, finishing, facilities, amenities or the
services provided – are extremely high. The inclusion of the brand name
adds another level of depth, as investors would have preconceived
notions and expectations associated with the brand.
When considering branding a scheme, developers will carefully balance
the potential benefits against all costs and expenses that they will
have to pay. These include royalty fees, annual license fees, service
charges, construction and the cost of furniture, fixtures and fittings.
In addition, developers have to cater for other conditions set by the
brand provider such as development phasing and ongoing management and
asset enhancement to ensure that the standard of services and facilities
are in keeping with the brand. Part of these costs will be passed on to
investors through the property price and the regular monthly
Another potential hurdle would be the challenge of retaining the
ability to command a premium for such projects. Part of the appeal of
branded residences is the ability to garner greater capital appreciation
compared to a regular luxury residential project, due to the brand name
affiliated to it. However, with more branded residences mushrooming, it
will escalate the competition in the market. New projects will have to
set higher standards in order to keep abreast of these challenges and
remain relevant. The absorption rate of a branded residence will depend
on the developer’s sales, marketing and pricing strategies and the
number of units it released to the market.
Finally, for older branded residences to maintain premium pricing in
the secondary market, it will fall on the responsibility of the
developer/ brand operator and the investor/ owner. The developer/
operator is responsible for the upkeep and maintenance of the building
and facilities, as well as the high-quality services. The investor/
owner has the responsibility to ensure that the interior of the
residences is also in keeping with the brand standards. With these in
place, a branded residence will be less susceptible to wear and tear
over time compared to a regular luxury residence.
The burgeoning growth of HNW individuals is expected to drive the
expansion of branded residences as they search for comfort, security and
quality. Wealth data specialist Wealth-X predicted that the number of
people who own more than US$500 mil in assets will grow by nearly 40% by
2022, on the back of strong economic growth and rising asset prices.
Numerically, it means the number of “demi-billionaires” worldwide is
expected to balloon from some 6,900 in 2017 to 9,570 in 2022. Of this
number, 3,000 are reportedly based in Asia, solidifying the region as a
wealth hub in the coming years9. It is thus not surprising that
currently, the bulk of branded residences under construction, estimated
around 27%, are located in the Asia Pacific. These include Four Seasons
Private Residences in Bangkok, YOO8 serviced by Kempinski at 8 Conlay in
Kuala Lumpur, Armani brand Century Spire in Manila and Banyan Tree
Residences Brisbane to name a few. We can expect a rise in demand for
branded residences in Asia Pacific in the coming years.
There are intrinsic qualities in a brand name that will enable
branded residences to remain highly valued in the long term. For one,
there is less risk of the building deteriorating through age because it
is in the interest of the building management to continue to invest in
the scheme and to ensure its success.
Then of course, there are the bragging rights that is a key driving
force for buying in this highly exclusive market that is currently
seeing a growth spurt. What counts is to buy something that one cannot
recreate. To the HNW investor, a brand affords that added bit of
distinction for him to brag about owning something someone else wants,
but only a limited number can do so.
As the branded residences market grows and expands across the
continents, and with higher consumer expectations, developers and brand
operators will continue to differentiate their product in order to be
able to attract investors. Other than the collaborations with fashion
and car brands, we are seeing a growing reception towards spa and
wellness resorts. Spas are seen as a part of the wellness industry. The
term “spa” is an abbreviation of “sanus per aquam” which means “health
through water”. Spa, as an oasis of relaxation, offers its visitors a
wide range of services starting from various cosmetic treatments such as
manicure, pedicure, body exfoliation to body care through treatments
with natural substances. A wellness centre provides services for
fitness, bodywork, educational classes, trauma treatment, rehabilitation
and nutritional programmes,. A person goes to a wellness resort to
achieve a particular objective, ranging from weight loss to improving
fitness, recalibrating one’s lifestyle or adapting a healthier routine,
and kicking off addictions like smoking.
Canyon Ranch and The Golden Door in the US and Thailand’s Chiva Som
are some of the brands which are at the forefront of establishing the
concept of wellness resorts while brands like Aman, Banyan Tree and Six
Senses are well known for their spa treatments. Canyon Ranch provides a
comprehensive professional approach with a team that includes registered
dieticians, board-certified physicians, exercise physiologists,
licensed therapists and other highly skilled, caring staff to enable
guests to meet their objectives. This same programme is available at
Canyon Ranch Residences at Bellefontaine where condo units are sold to
investors. Chiva Som is currently developing Chiva-Som Residences Bintan
in Indonesia which offers investors an opportunity to invest in health
with its uniquely designed longevity programmes and customised packages
including consultations with wellness experts.
The branded residences of tomorrow look set to provide more than
luxury living in style. They are becoming a true destination with a
defined purpose, where time and money are invested in one’s own health