The affiliation of a luxury brand to residential product, through the associated quality, design, and service that differentiate those brands, often provides the incentive for buyers to pay a premium for these qualities. Existing brand awareness can increase the profile of a branded residence scheme and can attract larger amounts of interest, and thus buyers, to a project.

Savills analysis shows that the average global premium for branded residences, over a comparable non-branded product, stands at 30% on an unweighted basis. It should be noted that these premiums do vary significantly by location, brand, and type of scheme.

The highest brand premiums can be found in emerging markets, where luxury brands appeal to growing numbers of high-net-worth individuals (HNWIs). Schemes in these locations can command an average premium of 54% compared to non-branded stock. In markets where few to no branded schemes exist, a branded project can achieve pricing double to that of comparable non-branded stock.

In these emerging markets, it is likely that a buyer will be looking for a primary residence compared to buyers in resort markets or global cities as branded residences offer security, high-quality product, and higher implied status compared to non-branded products in emerging markets.

Resort locations tend to have more varied price premiums which are highly dependent on local market composition, dynamics and buyer source markets. Across the resort markets studied, premiums stand at 32% when compared to equivalent non-branded properties. These markets, as the classification suggests, are popular with second home buyers looking to escape the frenetic pace of life in their home cities.

Global cities, with tighter competition at the top end of the market from other luxury, non-branded product, have the lowest premium for the location classifications at 24%.

Location is also a greater determinant of price in these cities as buyers are more willing to pay premium pricing to be in ultra-prime locations. These global cities, with their truly international buyer bases, must provide an even higher level of specification, service, and amenities to differentiate from other non-branded stock and attract their discerning buyers.

_{Read the articles within Spotlight: Branded Residences below.}

Further information

Global Residential Development Consultancy