Branded residences – residential properties under a hotel or other brand that are available to purchase – have been around for the last century, but it is in the last two decades that the sector has really taken off.

Savills World Research estimates that there are now more than 400 branded residential schemes globally, with a combined stock of approximately 55,000 residential units. Hotel brands are the dominant force and account for some 85 per cent of schemes. Marriot International is the largest single player with a market share of 31 per cent among hoteliers by number of schemes. 

However, while hoteliers are actively diversifying into branded residences, developers are also recognising the value-add of a brand in an increasingly competitive marketplace. The largest individual brand by number of schemes, in fact, is not a hotelier, but Yoo, a brand built on design credentials and with more than 50 branded schemes in operation. New brands will certainly give hoteliers a run for their money in this sector: tech companies, already disrupting the car industry, may be a natural fit. Luxury food and drink brands may be another contender.

Cash-rich, time-poor, brand-conscious individuals are attracted by the quality of design, security and high levels of service that branded residences offer and owning one is seen as both status affirming and a safer investment choice.

Savills analysis shows an average price premium for branded residences over non-branded schemes of 31 per cent, but this varies significantly by location. The largest premiums are usually achieved in emerging markets where the luxury brand adds an appeal to the newly wealthy. Premiums are also higher in these markets because the standard is usually much greater than existing non-branded stock.

Branded residences sales price premiums by key cities

^{Based on prices per square metre of comparable branded and non-branded developments}

^{Source: Savills World Research}

Smaller premiums are achieved in more mature luxury markets where prime stock is of a high quality and location is a greater determinant of value. Analysis of recent sales prices in New York suggests that, in some cases, there is a branded discount of 15 per cent as there are some exceptional non-branded buildings in the market.

The amount of existing supply and projects currently under construction suggests a broader geographic spread than ever before. Over a quarter of projects are in Asia Pacific (27 per cent), closely followed by the Middle East and North Africa with 23 per cent.

Branded residences can offer a solution to residents in emerging markets with immature residential property sectors. Savills has identified ‘emerged’ and ‘emerging’ countries with the best domestic growth prospects over the next decade.

The UAE, a safe haven in the Middle East, ranks first and already has the largest pipeline of branded projects outside the US. Pioneering developers and operators may consider emerging eastern European markets such as Latvia and Slovenia, all currently unserved with no projects in the pipeline.

Further information

Read more: Spotlight: Branded Residences

Contact Savills Research