Hotel Branded Residences Trends

Hotel Branded Residences Trends

The number of Hotel Branded Residences across the world increased tenfold in the decade up to 2012. Will this trend continue during this decade or will the bubble burst?

Branded Residences are homes in prime locations that leverage off the quality, luxury, services and prestige by associating with an established – and usually adjacent – hotel brand. Normally bought by private owners, these are aspirational ‘trophy’ products that usually command a significant price premium (20-30%) over comparable unbranded residences.

Hotel branded residences originated in the 1920s at New York’s Sherry-Netherland Hotel, but these did not catch on until the mid-1980’s, when Four Seasons quickly sold out its Boston hotel condominiums and subsequently bought the Asia-based Regent Hotels portfolio. Ritz-Carlton followed, focusing initially on North America.

The concept’s success soon saw new market entrants such as Starwood, Fairmont, Kempinski, Aman, St. Regis, Hyatt Regency, Six Senses, Banyan Tree, W Hotels, Shangri-La, Taj, Viceroy and Mandarin.

In fact, the number of hotels offering branded residences increased tenfold during the decade to 2012, which has been driven by several factors:

Hotel Operators

  • Increased awareness among luxury hotel operators of the value of their brands.
  • The opportunity for brand expansion
  • Strong capital inflows with limited exposure.
  • Valuable subsidy from residential real estate revenues.


  • Assurance of top quality construction, design, servicing and amenities
  • “Lock up and leave” option
  • Cutting-edge interior design, technology and architecture
  • Prime locations: trophy status
  • Hassle-free ownership
  • Strong rental returns
  • 24/7 access to a variety of 5 star hotel services
  • Stronger resale values.

Hotel operators license their brands to developers for a royalty fee (typically 3-5%) plus additional costs for related activities such as marketing. They play an active role in shaping the design and décor of the residences, ensuring that the completed units reflect their brands down to the finest detail. Marketing also plays a pivotal role, since buyers are among the most discerning.

Not surprisingly, such strong growth has attracted the attention of fashionable brands in other sectors (indeed Savills Director Daniel von Barloewen predicts that increasingly “developer and designer brands will emerge in competition to established hotel brands”):

  • Fashion and jewellery companies: Bulgari, Versace, Moschino and Armani have licensed their names (and design expertise).
  • Interior designers: Use their design skills to create distinctive interiors (e.g. YOO, with a stable of top designers including Philippe Starck and Kelly Hoppen).
  • Starchitects”: For example, the distinctive residences by Norman Foster and Frank Gehry at Battersea Power Station.

Recognised brands provide perceived insulation against risk, which is especially important in emerging markets as it builds confidence that the project will be completed and managed to a high standard.

Outside North America, the market in Southeast Asia is most buoyant, topping US$16 billion in value, with c.120 projects representing over 28,000 residences for sale across seven countries. Thailand leads the way with branded residences accounting for 37% of development projects.

Surprisingly, branded residences are less common in cities outside North America, notably in Europe. This is largely because prime real estate in many major cities is already expensive and in high demand, so the additional price premium from branding is not beneficial. For example, Knight Frank found that the average premium in London was only 11%, whilst at the other end of the scale was Dubai (c.60%) followed by Berlin and Cape Town (over 50%).

In summary, branded residences offer buyers security, prestige and a hassle-free home.  They offer developers attractive price premiums and accelerated sales velocity, whilst the hotel operator gets rewarded for the marketing muscle and value its brand brings to the development. Truly a win-win-win scenario.

A successful development must be driven by exceeding customers’ evolving requirements and desires. Increasingly these have been shifting towards the convenience, security and confidence offered by branded residences – and, from the evidence, this trend is firmly set to continue.

To download a free copy of the full 28 page report “Branded Residences: An Overview” please visit Graham Associates.  

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Author Chris Graham is founder of Graham Associates, a London based award-winning branding and marketing consultancy that specialises in luxury international resorts and residential real estate. With a career spanning over 30 years in sales and strategic marketing, Chris gained his real estate experience as Group Marketing Director at Hamptons International before moving to the agency side. In 2009 Graham Associates joined You Group, a central London agency with billings of £40 million pa and one of the UK’s leading property and destination marketing specialists. Chris and his team work with clients based around the world; over the past decade many of these projects have involved a branded residences component, exposing him to the benefits and growth potential of this exciting sector of the market. A Fellow of the Chartered Institute of Marketing and regular industry commentator, Chris has won several top awards including three Best Development Marketing awards, Best Property Website, Best Estate Agency Marketing, the OPP Gold Award for Marketing Excellence and twice a finalist in the Chartered Institute of Marketing Excellence Awards.

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