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global high

Global High

06.03.20

As the market for branded residences expands globally. Julia Millen looks into how some of the biggest players in the market are raising the bar.

As global wealth continues to grow rapidly - the global ultra-wealthy population ($50m+ in net assets), grew by 18% in the five years up to 2017 and is forecast to increase a further 40% over the next five (Knight Frank’s 2019 report highlights) and investors become more brand-conscious the concept of a property offering all the benefits of a luxury five-star hotel but with the stability and permanence of a home, is very alluring. Since the first branded residence, the Sherry-Netherland hotel, opened in New York in 1927, the sector has grown exponentially with much of the expansion occurring in more recent decades and big luxury hotel brands such as Four Seasons, Mandarin Oriental and Marriott driving the sector - the USA still accounts for around a third of the market. “The market did not really take-off until the mid-1980s when Four Seasons opened condos next to their hotel in Boston. That really demonstrated the success of the model,” says Chris Graham, an expert on the sector. During the 1980’s the concept grew, and consequently diversified to offer a more flexible approach suitable for a varying markets and locations. In Asia, developers moved away from building branded residences in cities and instead capitalised on beach locations. In 1988, The Aman hotel group was the first to launch the concept in a resort setting, with Amanpuri in Phuket, Thailand. Since then, and particularly in the last 20 years following the rapid growth in global wealth witnessed since 2000, the Asian market for hotel branded residences has seen strong growth, with Asia now accounting for an estimated 30% of schemes. This trend is set to continue, “Asia is the continent of opportunity: there’s a growing market and rapid urbanisation,” says Muriel Muirden, executive vice president at the architectural firm WATG.

Recent data collected by Knight Franks suggests that there are now over 400 branded residence developments worldwide, in over 60 countries, with around 62% of residences based in cities - the vast majority of which are hotel branded.

However, as the concept continues to thrive, the number and types of operators entering the space is expanding - brands such as Versace, Armani and Porsche have been linked with developments in recent years and growth in the sector shows little sign of moderating, “Marriott alone has more than 60 branded residential projects in the pipeline,” says Daniel von Barloewen, Regional Senior Director for Mixed-Use development for Europe at Marriott International.

To date, Europe has lagged behind other regions in the branded real estate market, accounting for only 7% of branded residences. Piers Schmidt, a luxury brand consultant and commentator at The Luxury Branding, believes this is because in Europe there’s “less demand for branded things” However as residential markets become more competitive, Europe may be another potential area of growth.

One previously untapped market, with the potential to compete on a global scale to both investors and residents, is Australia. Since the global financial crisis in 2008 Sydney has seen strong growth in prime property prices and continues to attract high net worth individuals as it rapidly advances as a global city. Due for completion in 2021, Crown Residences, One Barangaroo, marks the introduction branded residences Down Under. Sydney's most outstanding private residences will comprise 82 homes and offer six-star resort style service and breath-taking views.

At a more localised level, as a single city, Dubai has embraced the concept more than any other and is set to overtake New York as the global branded residences capital by the end of 2019, with a pipeline of just over 20 schemes.

With operators such as Kerzner International, The Address, The W, Jumeirah and Bvlgari entering the branded residence marketplace, from resort living on the Palm Jumeriah to urban concepts close to Downtown Dubai and the Financial Centre (DIFC).

According to Piers Schmidt, “the explosion of development in Dubai is down to the fact that developers and promoters have a need to differentiate: you can build it taller, make it revolve and shimmer, but when you get inside an apartment, having a brand gives an advantage.”

Four Seasons has redefined luxury for the modern traveller and home owner.

Located in the very heart of Mayfair on one of the world’s grandest garden squares and with great historical significance, lies Twenty Grosvenor square - Four Seasons first standalone branded residence, described by the luxury hotel chain as “effortless, hotel-style living”.  Working alongside high-end design, architectural and property development company, Finchatton, Four Seasons have created the ultimate lifestyle experience.

Exuding luxury and emulating a five-star hotel, Four Seasons epitomize Twenty Grosvenor Square as “Everything that a hotel should be, but designed to service just a few individual owners.” the spacious residences include a dedicated Four Seasons Director (in place of a general manager) and a team of highly trained FS personnel, it’s also very secure and private, with on-site embassy grade security monitoring – whereby only owners and guests are granted entry.

The property comprises of 37 apartments with prices in excess of £20 million and an associated service charge of £14 per square foot, so £77,000 a year for a 5,500 sq ft apartment.

As you would expect, the apartments are outfitted with the world’s leading brands. The kitchens comprise high specification matched marble, Bulthaup/Wolf kitchens, floor-to-celling windows and Venetian polished plaster finished with gold leaf.

For the ease of its residents, a dedicated app allows owners and guests to access all of the facilities, which include, a spa with treatment room, steam and sauna rooms, 25 m pool, gym, Pilates/yoga studio, 18-seat cinema, games room, board room and crèche.

Parking is provided in an underground carpark – with one space per apartment, and there’s also valet parking.

60% of the units have already been sold to a mix of British, American and other lifestyle purchasers.

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