Branded Residences - Savills
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World Research - 2019
S P OT L I G H T
Savills Research Branded Residences
Market Overview Global Distribution Brand Profiles
Overview Foreword & Summary
Summary
The number of branded schemes
Raffles, Old War Office, London has grown by 198% in the last
decade. Over 65 projects will open
by the end of 2019. Nearly 70 are
Foreword
due to open in 2020.
Growth is being driven by the
hoteliers. Hotel-branded residences
Global expansion of the branded residences account for 85% of completed
sector continues as more brands participate schemes, but 96% of pipeline
projects.
The branded residence sector reached in Europe and the Middle East that offer
new heights in 2019. A record number of potential, where wealth is forecast to rise North America, the birthplace
schemes opened, delivering more than 9,000 but there is little or no branded supply. of branded residences, is home to
additional branded units across 21 countries. Last year, we predicted that new lifestyle, 39% of operating schemes, but
This record is set to be broken again in 2020 non-hotel brands, outside the realm of only 19% of the global pipeline. Asia
when nearly 70 schemes are due to complete. what has been seen to date, would enter the Pacific, Europe, MENA and Latin
Branded residences offer many advantages sector. Our prediction has played out: media America are adding more projects
in a crowded global marketplace for luxury company Condé Nast has plans to move as the sector globalises.
property. Globally-mobile, brand conscious into the branded residence sector. This,
wealthy individuals are attracted by quality together with rapidly rising participation New York is set to be toppled
design, security and the level of service by hoteliers including Hyatt, Hilton and by Dubai as the global branded
branded residences offer. For hotel operators, Accor underscores the depth of the sector’s residence capital by the end of
adding a residential component can improve potential in the years to come. the year.
income streams with royalty fees from sales
in the early stages and a more diversified The range of brands is diversifying.
hospitality inventory, while also allowing Luxury hotel brands dominate, but
them to be more competitive when pitching the share of ‘Upper Upscale’ brands
for new projects. Developers, meanwhile, is set to grow, now accounting for
have come to recognise the value-add of a 22% of the pipeline.
brand in a competitive global marketplace. Riyan Itani
Significant opportunity remains. Branding Director Savills analysis shows the average
a residential development lends a point Co-head of Savills International premium for branded residences
of difference that will become ever more Development Consultancy over non-branded product stands
important in challenging market conditions. at 35%, and can exceed 70% in
We have identified a number of city markets emerging markets.
Cover Image:
The Four Seasons Private Residences,
30 Park Place in New York
2 3
Market overview Market overview
Phuket is forecast to
The rise and rise of
overtake Bangkok, taking
Dubai is set to overtake Miami, gateway to the US and fourth position, where a
New York as the global major resort destination has the number of smaller resort
branded residence capital third largest number of schemes schemes are in the pipeline
branded residences All change in the city league Price premiums Non-luxury hotel brands
The branded residence sector has come a long way since the New York is set to be toppled by Dubai as Savills analysis shows that the average
account for more than a
very first branded residence opened in New York almost a century ago the global branded residence capital by the premium for branded residences, over
quarter of the pipeline
end of 2019, thanks to a pipeline equal to an equivalent non-branded product in
In a crowded marketplace for prime Parent company Marriott International The biggest players in 2024 its current supply (see map, overleaf ). This the near vicinity, stands at 35%.
Complete
property, the distinction of carrying dominates the market in terms of number Forecast based on completed surge in supply coincides with the city’s This varies significantly by location,
1% 2%
a brand has become recognised as a of schemes and unit numbers. However, and announced pipeline schemes hosting of Expo 2020. Miami, gateway city brand and operator. In emerging global
13%
valuable USP. The number of branded in terms of individual brands, YOO is the Rank by
to the US and major resort destination, cities such as Kuala Lumpur the premium
Rank by
schemes has grown by 198% in the last largest single player in the market by both completed completed & has the third largest number of branded exceeds 70%. In mature markets, where
schemes pipeline schemes
decade. Over 65 new projects will open by number of schemes and units, followed schemes, and will retain its position. location is a much greater determinant
1. 1. Marriott
the end of 2019, a new record. This is due by Four Seasons. Ritz-Carlton, a Marriott Phuket is forecast to overtake Bangkok, of value, premiums are less. In New York,
to be broken again in 2020 when nearly 70 International brand, is set to overtake clinching fourth position, where a large for example, where some exceptional non-
are scheduled to complete. the latter in the coming years based on 2. 2. Accor number of smaller resort schemes are in branded product has come to market,
reported pipeline. the pipeline. a branded discount has been recorded. 85%
The players: movers & shakers 3. 3. YOO Price premiums are only one advantage
Growth is being driven by the hoteliers. Regions on the rise Beyond Luxury of branded residences. Greater project
Hotel-branded residences account for 85% The birthplace of branded residences, 4. 4. Four Seasons As the sector matures, the range of brands visibility, design and marketing expertise
of completed schemes, but 96% of pipeline North America is home to 39% of all is diversifying. There are almost 80 and access to the brand’s customer base
projects. Marriott International is the schemes, but as the sector has matured individual brands in the sector today, and are a few of the benefits for developers.
5. 5. Hyatt Pipeline
market leader and set to remain other regions are growing more rapidly. a further 30 brands will be entering the Owners, meanwhile, benefit from
1% 4%
so (see p8), but Accor is rising fast and Asia Pacific, led by Thailand and market for the first time in the coming years. owning a stake in a reputable brand, have
6. 6. Emaar
now has a large pipeline that will push Vietnam, currently has the most schemes Hospitality Luxury hotel brands dominate, but the access to superior services and amenities, 22%
it into second place in coming years, in planning and under construction Group share of ‘Upper Upscale’ brands is set to and in some instances access to a hotel’s
ahead of YOO, Four Seasons and Hyatt (23% of pipeline), followed by MENA 7. 7. Trump grow, accounting for 22% of the pipeline rental programme. And while owners pay
(see chart). Both Marriott International (21% of pipeline), where the UAE by number of schemes (see chart), and 26% a premium for purchase, analysis suggests
and Accor benefit from a large portfolio and Egypt account for most of the 8. 8. IHG of the pipeline by number of units. this premium carries to resales too.
of brands that they can deploy to suit forthcoming supply. Other aspirational brands are These benefits should be considered
different markets. Latin America is a major growth operational too, ranging from luxury and balanced against the costs of brand 73%
9. 9. Rosewood
Emaar Hospitality Group moves into market. The number of schemes in Mexico cars, such as Porsche, Aston Martin, and association, including royalty fees,
sixth, having only entered the sector at are set to more than double in the coming Mercedes, to fashion houses, including design fees, commitment fees, service
10. 10. Mandarin
scale five years ago. It has an extensive years as Marriott International, Accor and Oriental
Missoni, Armani, Versace, and Bulgari. charges, construction costs, FF&E ■ Luxury ■ Upper Upscale ■ Upscale
pipeline in the UAE and wider Middle Hyatt (among others) open new projects Most recently, US media company Condé costs and reserve. ■ Upper Midscale ■ Midscale
11.
East, under its Address and Vida brands. in both resort and city locations. Nast has announced its intentions to enter
the sector (see p9). Hotel branded residences only, based on STR classifications
12. Figures may not add to 100% due to rounding
Source Savills Research & International
Development Consultancy
Branded residential schemes by region
A decade of growth Future growth to come from outside North America
■ Cumulative number of schemes (right hand scale) Number of schemes opened in year (left hand scale) ■ Complete ■ Pipeline ● Forecast growth
80 600
250 180%
Cumulative number of branded
70 The sector has 158%
Number of branded schemes
grown by 198% in 500 ● 160%
60 the last decade 131%
residence schemes
200 123% 140%
Number of schemes
opened in year
400 ●
Forecast growth
50 ● 120%
150
40 300 100%
80%
30
● 80%
100 59%
200 50%
● 60%
20 33% ●
100 50 ●
40%
10
20%
0 0 0 0%
1981
1982
1983
1985
1987
1988
1989
1991
1995
1996
1997
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
North America Asia Pacific Europe Middle East Latin America Caribbean Africa
& N. Africa
Source Savills Research & International Development Consultancy Source Savills Research & International Development Consultancy
4 5
Global distribution Global distribution
Branded Residences: global distribution There are more than 420 branded residence schemes globally, with 65,000 units combined.
An extensive global pipeline will see these figures rise by more than half again in the coming years
NORTH AMERICA EUROPE MENA
Top three brands by region Top three brands by region Top three brands by region
(based on complete and pipeline schemes) (based on complete and pipeline schemes) (based on complete and pipeline schemes)
Ritz-Carlton YOO Address
=Trump Kempinski Vida
= Four Seasons = Six Senses Fairmont Residences
Top three parents by region = Mandarin Oriental
Top three parents by region
(based on complete and pipeline schemes) Top three parents by region (based on complete and pipeline schemes)
Marriott International (based on complete and pipeline schemes)
Emaar Hospitality Group
= Four Seasons Marriott International Accor
= Trump
YOO Marriott International
Accor
Accor
2. New York 8. Boston 7. London 6. Istanbul 1. Dubai 5. Bangkok =9. Kuala Lumpur
ASIA PACIFIC
Top three brands by region
(based on complete and pipeline schemes)
YOO
Four Seasons
Banyan Tree Residences
CARIBBEAN
Top three brands by region Top three parents by region
(based on complete and pipeline schemes) (based on complete and pipeline schemes)
Ritz-Carlton Accor
= St. Regis
Marriott International
= Autograph
= Hyatt
= Four Seasons 3. Miami = YOO
Top three parents by region
(based on complete and pipeline schemes)
Marriott International =9. Bodrum 4. Phuket
= Four Seasons
= Hyatt
LATIN AMERICA
Top three brands by region AFRICA
(based on complete and pipeline schemes) Top three brands by region
(based on complete and pipeline schemes)
YOO
= SLS Four Seasons KEY
= Rosewood = One&Only Number of complete schemes Number of pipeline schemes
= Four Seasons = Fairmont Residences
= Ritz-Carlton 1 1
Top three parents by region
Top three parents by region (based on complete and pipeline schemes)
(based on complete and pipeline schemes) 26 21
Four Seasons
Marriott International = Kerzner International
YOO = Marriot International 1.
City ranking based on complete + pipeline schemes
Accor = Accor
6 7
Brand profiles Brand profiles
Mandarin Oriental
Brand profiles One of the fastest growing
players in branded residences
More than 60 different players participate in the branded residence Mandarin Oriental has seven completed
sector, with over 100 brands between them branded residences schemes across the
globe, making them the 12th biggest player
in the sector. Schemes are presently
Marriott International operating in the US, UK, Thailand, Turkey,
Macau and Taiwan.
The world’s biggest player in the sector Developers working with Mandarin Oriental
benefit from a dedicated marketing and
Marriott International is the world’s biggest Marriott International operates all the operations team. Owners, meanwhile, benefit
player in the branded residences sector. With schemes it brands, ensuring high-quality from extensive service and amenities, as well Mandarin Oriental Residences, Barcelona
100 branded residences across 25 countries service that’s consistent with brand values. as access to a worldwide recognition The company’s portfolio of branded
Marriott International brands represent one Resident owners can often participate in programme. The ratio of onsite staff to residences is expected to more than double
in every four operational projects globally. The a hotel rental program, providing access residences at Mandarin Oriental properties in the coming years. Twelve schemes are
company leverages 15 of its 30 leading brands to a huge market of potential renters. is particularly high, in some cases reaching currently under development, which will see
for branded residential projects, with Ritz- The company currently has 76 branded one colleague per home. them move into the top ten largest players
Carlton, St. Regis and W accounting for nearly residential projects planned or under While the majority of their residences in the sector. Their pipeline includes future
70% of today’s operational developments. construction, accounting for 27% of the are adjacent to a Mandarin Oriental hotel schemes in Russia, Cayman Islands, Spain,
Marriott International’s extensive brand total branded residence schemes in the (co-located), they have some standalone Germany and Turkey. The Residences at
portfolio means it can offer a brand global pipeline. Marriott International’s schemes in the pipeline. These include Mandarin Oriental, Moscow will be the first
appropriate for every location and project pipeline is increasingly global – today, more projects on Fifth Avenue in New York luxury branded residences serviced by a
type. The company evaluates the tourist and than half of its existing branded residential and Passeig de Gràcia in Barcelona. five-star hotel in the Russian capital.
residential sector of every market it enters developments are located in the US,
to find the most complementary match. compared to just 20% of pipeline projects.
Marriott International’s portfolio of The branded residential projects in
“distinctive” brands, including the Luxury Marriott International’s development pipeline Condé Nast
Collection, Edition and W, are tailored to would add 18 additional countries. Marriott’s
different demographic groups. W, for Caribbean and Latin America region is
example, is strong in city and resort markets experiencing strong growth with a
The media company has
and resonates with affluent younger buyers. residential pipeline more than double its plans to enter the sector
Marriott’s Premium Branded Residences current distribution led by markets such as Savills International Development
including Marriott, Sheraton and Westin Mexico with new projects in both city and Consultancy have been in discussions with
Residences create additional opportunities resort destinations. media company Condé Nast, who has plans
to diversify the design, services, amenities to enter the branded residence market. With
and pricing offered across a broad brands including Vogue, Vanity Fair, AD,
residential portfolio. Wired, Tatler and GQ, they have the potential
to offer a range of curated living experiences
to occupiers.
While the company may be best known Condé Nast
for its magazines, Condé Nast expanded
into hospitality in 2003 with Vogue Cafés Condé Nast intends to work alongside
and GQ Bars, making residences a natural developers to approach each space
progression. Branded residences have been differently, incorporating local materials
chosen as a good fit for Condé Nast’s global and architectural styles. Condé Nast will
lifestyle media brands, and an opportunity be partnering with premium management
to further diversify outside the company’s and concierge companies to operate their
core publishing activities. schemes.
The company plans to offer spaces that Each of the company’s brands offers
are luxurious, relevant and dynamic. Their a distinct IP and signature look, but are
brands already offer aspirational content also flexible and respond to (and indeed
on art, culture, design and fashion. shape) changing consumer preferences.
Developments are expected to embody This should resonate with a customer base
these qualities, which will be a key selling increasingly seeking a curated, on-trend,
W Residences Algarve, Portugal point to developers and buyers. living experience.
8 9
Outlook
Fastest growing cities for high income households, next five years
Hangzhou China Guangzhou China Seoul, South Korea Panama City, Panama Berlin Germany
189% 180% 78% 71% 62%
The future of
branded residences
As market conditions and buyer preferences evolve there is huge potential
for the branded residences sector
A point of difference opportunities in historic European city Hoteliers are proactive in this respect,
The prime residential markets of many world centres are limited though; investors have reimagining brands over time to ensure
cities are slowing. The Savills World Cities Prime had to focus on conversion and repurposing they remain relevant to customers. Hotel
Residential Index rose by just 0.4% in the first projects in order to secure prime locations. branded residence developments factor in
half of 2019, taking annual growth to 0.7%, the Some cities are growing from a lower regular refurbishments of communal areas
lowest levels seen since 2009. However, with a base. The cities forecast to see the largest to make sure that schemes reflect current
reputable brand over the door, branded property, increase of high income households in brand values. Hoteliers with a portfolio of
perceived to be a ‘safer’ purchase, is positioned to percentage terms include Hangzhou (an brands may rebrand a property to reflect
stand out in more challenging market conditions. important Chinese tech hub), Guangzhou shifts in a particular market.
(the biggest city in China’s Greater Bay Millennials, valuing experiences over
Follow the wealth creation Area), and Berlin (Germany’s dynamic material goods and prizing individuality,
Global growth may be slowing, but some cultural and technology centre). have fuelled the rise of lifestyle brands such
cities are still generating wealth and are set to Prime residential markets here may be as W, SLS and MGallery. Early indications
outperform in the near term, making them good smaller or less established, and branded suggest that Generation Z (those currently
targets for branded residential product. residences are well placed to offer comfort, aged under 24) are even less brand
Analysis of cities forecast to add the most security and familiarity to investors and conscious than their predecessors.
high-income households in the next five years buyers alike. It is no coincidence that we are
suggests that the US remains a market to watch, seeing the entrance of players such as
but local supply and market dynamics need to Responding to changing Condé Nast. With a portfolio of magazines,
be taken into account. consumer preferences they will be able to curate lifestyle without
New York is forecast to add 154,000 high Just because a brand is fashionable today being tied to a single product or brand. Savills World Research
income households in the next five years, more doesn’t mean it will be tomorrow. Consumer This flexibility should resonate with a We monitor global real estate markets and the forces that shape them. Working with our teams across the globe, and
than any other city (see chart). This market preferences can, and do, change, and this customer base increasingly seeking a drawing on market intelligence and published data, we produce a range of market-leading publications, as well as providing
is fully supplied, so investors may look to Los has implications for the sector. tailored living experience. bespoke research to our clients.
Angeles, Houston, Dallas and San Francisco, Paul Tostevin Sean Hyett
which are relatively undersupplied relative to Cities adding the most high-income households over the next Director Analyst
forecast wealth creation (see chart). five years Set against supply of branded residences +44 (0) 20 7016 3883 +44 (0) 20 7409 8017
ptostevin@savills.com sean.hyett@savills.com
In the Middle East, Kuwait City and Abu ■ Additional high-income households (2019-2024)
Dhabi offer potential with a large increase in ● Branded units (complete and pipeline)
Additional high income households ($250k+)
180,000 14,000
high income households forecast, against no or Savills International Development Consultancy
limited supply. Dubai is forecast to add 24,000 160,000 Savills International Development Consultancy provides market data driven consultancy to developers, investors and brands
Number of branded residence units
12,000
high income households in the next five years, in luxury residential and resort markets across the world. Services include pre-acquisition development consultancy, project
140,000
but has a very full supply of complete and feasibility studies, premium analysis and a range of branded residential consultancy services.
(complete + pipeline)
10,000
pipeline projects. Saudi Arabia offers potential, 120,000 Riyan Itani Alexandros Moulas
led by Riyadh and Jeddah, and also supported by Director, Co-head Director, Co-head
100,000 8,000
the country’s push into resort development. +44 (0) 20 7016 3759 +44 (0) 20 7016 3872
ritani@savills.com almoulas@savills.com
A number of Australian cities are forecast to 80,000
6,000
see strong wealth generation. Supply of branded 60,000
product in Sydney, Melbourne and Perth is Savills Global Residential Savills Hotels
4,000
very limited, but sector potential should be 40,000 Hugo Thistlethwayte Rod Taylor Tim Stoyle
considered against relatively weak market 20,000 2,000
Head of Operations, Director, International Head of UK Hotels
conditions at present. Global Residential Residential Developments +44 (0) 20 7409 8842
- - +44 (0) 20 7016 3759 +44 (0) 20 7016 3727 tstoyle@savills.com
Turning to Europe, London leads, resilient
London
Luxembourg
Zurich
Paris
Munich
New York
Los Angeles
Houston
Dallas
San Francisco
Kuwait City
Abu Dhabi
Dubai
Riyadh
Jeddah
Sydney
Hong Kong
Singapore
Melbourne
Perth
hthistlethwayte@savills.com rdtaylor@savills.com
thanks to its world city status. Luxembourg,
Zurich and Paris are forecast to add the next
Savills plc is a global real estate services provider listed on the London Stock Exchange. We have an international network of more than 600 offices and associates throughout the Americas, the UK, continental Europe,
most high income households and have no Asia Pacific, Africa and the Middle East, offering a broad range of specialist advisory, management and transactional services to clients all over the world. This report is for general informative purposes only. It may not
be published, reproduced or quoted in part or in whole, nor may it be used as a basis for any contract, prospectus, agreement or other document without prior consent. While every effort has been made to ensure its
supply of branded product at all. Development North America Middle East Asia Pacific Europe accuracy, Savills accepts no liability whatsoever for any direct or consequential loss arising from its use. The content is strictly copyright and reproduction of the whole or part of it in any form is prohibited without
written permission from Savills Research.
Source Savills Research and Oxford Economics
10 1133 Margaret Street London W1G 0JD +44 (0)20 7499 8644
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