In Global Real estate it is no real surprise to understand that the Middle East, Dubai and more recently Saudi Arabia lead the way in developing and offering luxury branded residences, targeting the more discerning wealthier client.
Globally there are currently approximately 4000 such projects, with Asia and North America leading the destination lists, however as well as the growth in Dubai and Saudi Arabia, European developers are starting to take a far greater interest and engagement in the concept.
There are many reasons for the recent upsurge in these style of developments, so we thought we would take a look at the three corners of the pyramid, typically in Property development there are developer and buyer, however here we have to add the all important Brand perspective.
The Developer Perspective
Offering Branded properties will generally increase project values by up to 35% which is obviously good news for the developers, the key in driving this figure up this is the brand chosen, we have seen various “luxury” products have their names associated with the concept even though they have absolutely zero connection to it.
The more discerning developer is looking to offer a higher quality of product, a higher value proposition for their clients, and the ability to separate themselves from a very crowded market sector, partnering with the correct brand allows them to truly rise above all competitors.
2. The Buyers Perspective.
The most common reasons for a buyer choosing a BR over normal freehold properties tend to make for an extremely short list, featuring, guaranteed quality of build, high quality FF&E, security, exclusivity, location and also owner amenities and benefits (More on this later), price is very rarely a factor in this type of purchase.
3. The Brand Perspective.
The type of brands that add their names to properties don’t really need the exposure, however it can help them to break into lucrative markets at a relatively low cost, they can range from individuals, Boris Becker, now Rafa Nadal, Luxury Car companies, Lamborghini, Bugatti, Maserati, High End fashion brands are particularly common place, Versace, Armani, etc etc. The location is prevalent to these type of brands, so again Dubai is perfect as is the recently opening market of Costa Del Sol and specifically Marbella, we are even seeing internal designers and various other brands adorning their names on these residences.
The major type of brand covering 79% of all Global Residences are the naturally more obvious and relevant, being Hoteliers, ranging from Four Seasons, Ritz-Carlton, Marriott’s, St. Regis, Fairmont etc. this option can give them great exposure and can usually lead to actual hotels of the same brand not being too far behind the BR Freehold option, a significant factor with Hoteliers are the ability to provide exceptional service and the sense of community that brands like these will bring.
The VOS Perspective
We have worked in this sector globally and for us the concept of Branded Residences offer a genuine win-win-win if done correctly, and by correctly we mean Brands being from Luxury Hoteliers, they have the guest experience at the forefront of their work, they have tremendous taste and track records in properties being finished and more importantly maintained correctly, they offer exclusivity, they can offer rental options if its a second or even third home, they offer amazing service, a la carte features ranging from fine dining in-house, incredible spa’s, recreation, and leisure, golf courses and much more, all options that they are highly experienced in running to the highest of standards.
Typically mixed use Residences on resorts are more often purchased as second homes with buyers loving the "lock it and leave it" advantage or indeed the rental service provided by the Hotelier, stand alone Residences are more often purchased as prime residences and again the sense of community is an important factor here.
Equally some brands offer their owners incredible benefits, Marriotts and St. Regis for example offer all owners 2 years at Platinum Elite level in their Bonvoy loyalty program, bringing amazing benefits to be utilised on a global basis.
With the greatest of respect to the other brands listed, what do Lamborghini and Maserati know about creating a guest experience, what do Versace know about running residential operations,
Bugatti and Spa’s, really! yes they are tremendous brands but lets face it, you don’t automatically connect them with exceptional service.
If Ritz-Carlton got into the automobile industry, would you be rushing out to buy one and knowing you’re paying a high premium for it?
So our guidance is simple, Branded Residences are a tremendous product offering wonderful lifestyle choices, but when you choose, go with a hotelier not a suit maker.
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