Whether it is a free Aston Martin with the purchase of an apartment at the Aston Martin Residences in Miami or a chauffeured Rolls Royce car fleet at Peninsula Residences in London, brands are becoming ever more innovative in the ways in which they distinguish their product offering. As more branded schemes enter the market, it is more important than ever for each one to be differentiated in order to stand out from the crowd.

AMENITIES

One of the key ways of doing that is through the amenities they provide. While nearly all branded schemes will offer concierge, security, fitness centres, spas, and pools, the higher-end the development, the more amenities the development tends to have. For example, beauty services, in-residence catering, and golf are much more exclusive and are associated with the top end of the chain-scale offering. Furthermore, less than 5 per cent of branded schemes offer equestrian facilities, pet spas, or Michelin starred dining. Although these amenities are not necessarily deemed essential or important by purchasers, the inclusion of unique and rare facilities can help a brand maintain a competitive stance in the market.

BENEFITS

A number of brands also offer loyalty schemes and other benefits. When purchasing a branded residence, individuals are buying into a lifestyle that affords them luxury, privacy and exclusivity, among other intangible characteristics, so these packages must be competitive, relevant, and flexible enough to permit customisation to local markets.

Local benefits reflect preferential rates on-site such as in restaurants and cafés as well as spas. Often, these discounts range from 10-20 per cent and are usually confined to co-located schemes. Many brands offer loyalty programmes such as Mandarin Oriental’s Residences Elite programme and Rosewood’s Rosewood Reserve. These schemes allow owners not only to enjoy benefits at their chosen location but at other branded locations globally. These can range from room upgrades and flexible check-in and check-out to exclusive offers from brand partners as well as VIP access to sporting, music and celebrity events.

RENTAL OPTIONS

Rental programmes are an effective way to support the sale of branded residences by maximising marketability and have a global participation of roughly 50 per cent.

Optional rental programmes are most popular with lifestyle buyers and are common among luxury operators. If they wish, buyers can choose to enter the rental pool to help cover running costs. Branded rental programmes usually require owners to adhere to a furniture package though, which may deter some.

More investment-driven midscale developments tend to have mandatory rental programmes.

The income structure is typically modelled on an income split for luxury developments, with 60 per cent going to the owner, and a guaranteed yield usually ranging between 3-5 per cent for investment-driven products. However, these yields can inflate sales prices and increases risk for the developer. Moreover, the adjustment of rental returns following guarantee periods could result in disappointed owners.

Further information

Contact Charlotte Wiliams