Having worked in the branded residences space since 2011, I have certainly seem some huge changes in the sector. In those early days it was extremely difficult to find suitable brands to work with, there was no flexibility and in general (especially in Asia) most hotel groups were unwilling to jump on board with the concept.
That isn’t to say that there were no participants, but you really had to jump through hoops to get brands on board.
Fast forward to today, and wow what a difference we are seeing which is absolutely fantastic. Almost every hotel brand has an active business development unit dedicated to branded residential real estate, and we are are seeing many new non hospitality brands adding their wealth of expertise to the sector.
Whilst this growth and popularity of branded residences is great, it does come with some downside, and I want to cover some of that today.
Branded Residences The Downside
I have wanted to write this article for some time. I have been mindful of slipping standards and generalisations that if continue could damage our industry. Recently I have seen some articles from professionals within the real estate industry that have prompted me to write it now.
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- Example 1: was from someone who works for one of largest real estate companies in the world, who said that branded residences do not have a set definition of what they actually are.
- Example 2: an investment for purchasing 20 SQM (215 Sq.ft) hotel rooms in a budget hotel complex with no residential component being marketed as branded residences.
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I could go on with many more, but allow me to address these 2 examples.
I and many of my colleagues who have worked in this space for sometime would wholeheartedly disagree that branded residences have not been defined. Let me give you my definition.
What are Branded Residences
Branded Residences are elite luxury residential real estate developments that are associated with a luxury hotel brand, or an exclusive luxury non hospitality branding partner.
They offer best in class locations, design and facilities, and provide exquisite service standards to homeowners. Also due to their exclusive standing and ongoing management and maintenance, they should offer stronger returns as far as yield and capital appreciation.
I would agree that there are nuances in each project, but as a general overview this is my definition and I would hope, that most of my colleagues and the brands themselves would agree with me.
To claim that a 20 SQM hotel room investment in a 2-3 star hotel that offers minimal facilities, without any residential component is a branded residence, is disingenuous in my opinion, it is purely a marketing tool to jump on the popularity of the sector.
Photo credit: Waldorf Astoria Residences New York
Branded Residences are not pigeon boxes, they are exclusive residential real estate
Why is this a problem?
Some of you might be asking this, and it is a fair question, here’s why.
Our sector is growing at a fantastic rate and the future is extremely bright, it is also clear that property investors are positive about branded residential real estate.
Projects are being launched every week it seems, and these projects are achieving huge sales numbers from Day 1.
They are selling out because they offer best in class and are unique, if we dilute the standards of branded residences, then they will lose their appeal and uniqueness.
Consultants, hotel groups, developers and marketing professionals should continue to drive and ensure that branded residences are the best luxury high end real estate, that is possible.
I am not saying that the industry should not adapt and everything has to be 5 star. I see nothing wrong with 3 and 4 star branded residence projects, some 3 and 4 star hotels are wonderful and will offer a great option for the property purchaser who cannot afford an elite level home.
However not everything can or should be a branded residence and we do not want to be in a situation whereby the attitude in the future becomes:
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“Oh another Branded Residence Big Deal”
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This article is written by Jason Payne of BR Asia and founder of BRESI
BRESI is the world’s first platform dedicated to the selling and marketing of branded residences. BRESI is an exclusive platform for owners, developers, and hotel groups to promote luxury branded residences
Our goal is to highlight the best branded real estate for sale around the globe, and to provide insight and news from the sector
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