Branded Residences - Savills
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World Research - 2020
S P OT L I G H T
Savills Research Branded Residences
Market Overview Global Distribution Brand Profiles
Overview 2
Foreword & Summary
The Residences at Sindhorn Kempinski Hotel Bangkok, KEMPINSKI, Siam Sindhorn Co. Ltd Summary
The branded residence sector
Foreword
has grown 170% over the past
10 years and 2020 is set to be
another record year with over 100
additional schemes opening.
2020 has been a year of change. The branded residential
sector looks resilient even as competition grows Miami, Dubai and New York
remain the top three cities for
This year has seen significant change to segments. The pipeline of these types of branded residences globally. As
our established way of life. The Covid-19 brands is expanding fast. the sector continues to diversify
pandemic has altered the face of global But the current environment brings new globally a number of new growth
property markets. But not all real estate operational and design challenges. The use hotspots are emerging. Fast
sectors have felt its impact equally. of Proptech is accelerating as a result. As the growing countries for the sector
Branded residences have proved more way we use our homes changes, developers include Egypt, Vietnam, the UK,
resilient than some. are re-examining product definition in order Morocco, Malaysia, Australia, and
The sector has experienced an to accommodate flexibility in private space. Saudi Arabia, amongst others.
extraordinary decade of growth. The last In the longer term, the sector could
ten years has seen the number of branded benefit from the behavioural changes Hotel brands continue to
residences increase by 170%, adding more we are already observing. More flexible dominate, accounting for 84%
than 52,000 units across 370 schemes. In working practices could see owners make of complete schemes and 88%
spite of wider economic turmoil, 2020 is greater use of what are often second of the pipeline, but 11 new non-
poised to be another record year with more properties. Demand to rent hotel-branded hotelier brands are expected to
than 100 new schemes opening. residences may be boosted as tourists seek enter the sector by 2025.
The pipeline is now more diverse than out self-contained accommodation, with
ever. A wave of new brands from the art, the benefits of hotel amenities. Branded residences achieve
fashion, design and celebrity worlds are As the sector touches almost every corner a premium, on average, of 31%
supporting growth. Hoteliers, bringing of the globe, and more brands participate, compared to equivalent non-
more of their brands into play, have competition is growing. An understanding branded properties, although
doubled down their participation. The of local markets, careful buyer targeting this figure varies significantly
diversified income streams the sector and brand alignment is essential. Huge by location.
provides are more valuable than ever as the potential remains, but careful planning and
wider hospitality sector struggles. advice is key to individual success. As the branded residence sector
Having tested the formula in core, matures, there is significant
established markets, brands are looking opportunity in the non-luxury
further afield for new opportunities. segment. The share of non-luxury
Twelve countries will receive their first brands accounts for 31% of the
branded residential project in the next four pipeline compared to 23% of such
years, in locations as diverse as Iceland, schemes open and operating today.
Paraguay and Nigeria. Riyan Itani
There is significant opportunity in Head of Savills International
the upper-upscale, upscale and midscale Development Consultancy
Cover Image:
The St. Regis Residences, Boston
3
Understanding the sector
What are
branded residences?
Branded residences offer many advantages in a
crowded global marketplace for prime property
There is no single industry definition, but at its core, a
branded residence is a residential property available for
purchase on the open market that is affiliated, usually
by design and servicing, to a well-known brand. This ■ A point of difference in
excludes traditional serviced (rental) apartments, a competitive market
although owners of branded residences can rent out ■ Wider customer base,
their own properties. including brand followers
Brand association instils buyer confidence through ■ Design expertise and
the assurance of a high level of service and usually
marketing benefits
an exceptional amenity offer. Buyers aren’t the only
■ Potential price premiums
beneficiaries. There are significant advantages for
■ Cash flow at early stage
developers and the brand themselves as well (see
graphic, right):
of development
How do they work?
Branded residences are usually a partnership between a
brand and a developer. The brand grants a licence to the
developer to market and sell residences incorporating
their brand. In many cases the brand also manages and
services the residential properties as part of an optional
or mandatory rental programme.
Fees usually charged
Fees payable by the developer include a marketing
licensing fee (or royalty fee), paid to the brand on every ■ Income from licensing fees
sale. The brand also levies design fees (or a technical and ■ Additional rental product
services fee) in the conception of the scheme. Fees paid
■ A deeper customer
by the property owner include a trademark licence fee,
relationship
for having the brand on their residence, management
■ Can help meet planning
fees and the usual service charges or HOA fees.
requirements (where single
Typical specification and use may not be granted)
service offer
Unit types and sizes vary depending on scheme
location. Furniture, Fixtures & Equipment (FF&E)
packages are mandatory if a buyer wishes to enter their
property into the managed rental scheme.
High specification plays an important role in
positioning a product, but it is no longer the sole
differentiator for branded schemes, particularly in
more mature markets.
What sets these schemes apart is the services on
offer. ‘Base services’ (included in service charges)
comprise concierge and the use of hotel amenities (if
affiliated to one), or in some cases, dedicated amenities.
‘On-demand’ services, at additional cost, range from
housekeeping to pet services
(see table, right).
4
Understanding the sector
The branded residence advantage
There are significant benefits for developers, brands and owners
■ Prestige, trophy property
benefiting from brand
association
DEVELOPER OWNER
■ Turnkey with quality fit out
■ Professionally managed,
LICENCE suitable to lock up and
SALES leave
■ Rental potential, self-
contained unit with
hotel offer
■ Assurance of high quality
service and amenities
RENTAL SCHEME
BRAND
Four types of branded residences Typical service offer
1
CO-LOCATED
Branded residence on same site or directly BASE SERVICES ON DEMAND SERVICES
adjacent to a hotel Use of hotel amenities Housekeeping
(or dedicated amenities Laundry services
2
CONDO-HOTEL for residences) In-home dining service
Residences located within hotel building 24/7 security Personal shopping
or comprising entire building Valet parking Personal trainer
Elevated status in loyalty scheme In-home spa treatments
3
STANDALONE Concierge, base services: Childcare services
Residence on separate site to hotel (but a ■ Mail and package delivery
hotel of the brand usually present elsewhere ■ Travel and restaurant
Pet services
in city / location) reservations Meeting room services /
■ Spa and salon reservations office equipment
4
■ Golf and entertainment
Use of guest suite
NON-HOTELIER reservations
Residences that carry a non-hotel brand ■ Wake-up calls
5
Market overview
An expanding market
The branded residential sector continues to expand geographically
with more brands entering the market
The branded residential sector has grown the sector has matured so it is becoming for 40% of completed schemes. The pipeline
170%, by number of schemes over the past increasingly geographically diverse. demonstrates that brands are continuing to
10 years and 2020 is set to be another expand geographically, particularly driven
record year, with over 100 additional Going global by growth in Asia Pacific. Asia Pacific
schemes opening. The branded residential sector has accounts for the largest share of pipeline
The number of brands has risen from historically been focused in North America. schemes (25%), followed by the Middle East
more than 60 to 130 in the last decade, and The region was home to over half of all & North Africa (20%), and Europe (17%),
is forecast to reach almost 160 by 2025. As schemes until 2015 and currently accounts compared to 16% in North America.
Branded residence schemes: Geographic evolution by global region
■ North America ■ Asia Pacific ■ Europe ■ Middle East & North Africa ■ Latin America ■ Caribbean ■ Africa
100%
90%
80%
70%
Share of total schemes
60%
50%
40%
30%
Prior to 2015, North America
20%
made up over half the market
10%
0%
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
00
20 1
02
20 3
04
20 5
06
20 7
08
09
10
11
12
13
14
15
16
17
18
19
pi 20
e
0
0
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0
0
20
20
20
20
20
20
20
20
19
20
20
20
19
19
19
19
19
19
19
19
19
19
20
19
19
19
19
+ 20
19
19
20
20
19
20
20
pe
20
20
Source Savills Research & Savills International Development Consultancy
The United States remains by far Growth hotspots Other fast growing markets, with a pipeline
the largest single country market offering Globally, a number of new growth of at least six schemes, include Vietnam,
a total of 183 complete schemes. This is hotspots are emerging. Egypt is forecast the UK, Morocco, Malaysia, Australia and
more than the next nine largest country- to grow fastest of any country over the Saudi Arabia.
level markets combined. Thailand and the next four years, rising from one to 18 This mixture of emerging and established
United Arab Emirates are the second schemes. Other countries moving from prime markets illustrates the ever-widening
and third largest country markets, with a low base include Spain (+83%), Bahrain reach of the sector today. Now a proven
34 and 31 completed schemes respectively. (+80%), Belize (+80%) and Costa Rica formula, brands are confident entering
The cities with the most schemes today (+80%). new geographies. This is illustrated by
are Miami (32), Dubai (29) and New York The United Arab Emirates, Mexico the fact that 12 countries are scheduled
(25). Dubai is forecast to become the and Brazil are expected to add the most to see schemes open for the first time by
largest city based on pipeline schemes. schemes by number among the fastest 2024. Leading the way for debut schemes
growing countries (those adding at least are Cyprus and Nigeria, both with four
50% to their existing supply). developments each.
6
Market overview
The biggest players: By brand
■ Completed ■ Pipeline
Number of schemes
0 20 40 60 Counting completed and pipeline, the Ritz-Carlton (a Marriott
brand) is the largest player by individual brand, followed by
The Ritz-Carlton Four Seasons, both with more than 40 open and operating
developments. YOO Inspired by Starck, and Trump rank third and
fourth respectively.
Four Seasons
St Regis is expected to overtake W (both Marriott brands) and YOO
Studio and rise to fifth place, with 18 schemes in the pipeline. We
YOO Inspired by Starck have separated YOO into sub-brands. YOO was established in 1999
by John Hitchcox in partnership with designer Philippe Starck. It
works with a team of celebrity designers, including Jade Jagger and
Trump Kelly Hoppen, to create distinctive designer-branded residences
that bring visibility to projects. If YOO were to be counted as a
single brand they would be the largest brand by some margin.
St Regis
Meanwhile, Fairmont (an Accor brand) and Mandarin Oriental
are to enter the top 10, with large pipelines of 17 and 14 schemes
Fairmont respectively. One of the fastest growing players in branded
residences, the number of Mandarin Oriental branded residential
projects will rise threefold as a result. While the majority of their
W residences are adjacent to a Mandarin Oriental hotel (co-located),
standalone schemes are in the pipeline. These include projects on
Fifth Avenue in New York and 111 Passeig de Gràcia in Barcelona.
YOO Studio
Emerging brands are carving out niches in the market and are
also expanding. Lefay, the leading Italian brand in luxury wellness
Mandarin Oriental hospitality, has one scheme with residences open and operating in the
Dolomites and is expanding with two more schemes, one in Tuscany
and the second in the Swiss Alps. Dream Hotel Group is another
Rosewood emerging brand. It plans to enter the market by 2021 with seven
schemes in the pipeline across four of its brands, the majority located
Source Savills Research & Savills International Development Consultancy in the Americas, the exception being a pipeline scheme in Belgium.
Geographic evolution: Top 10 countries
■ USA ■ Thailand ■ UAE ■ Mexico ■ China ■ Canada ■ Indonesia ■ Turkey ■ Vietnam ■ India ■ Other
100%
90%
80%
70%
Share of total schemes
60%
50%
40%
30%
20%
10%
0%
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
20 9
00
20 1
02
20 3
04
20 5
06
20 7
20 8
09
10
20 1
12
13
14
15
16
17
18
19
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19
19
20
19
19
19
19
+ 20
19
19
20
20
19
pe
20
20
Source Savills Research & Savills International Development Consultancy
7
Market overview
The top 10 players in
the sector since 2000
Two decades of change in the brand league
Analysing the top brand parent Marriott is now by far the leader in will push it into second place, behind
companies active in the sector over the sector. Marriott.
the past two decades, much has Accor ranks sixth by number of Other fast rising players include YOO,
changed since Trump topped the table complete schemes, as of mid-year moving from tenth place in 2003 to
back in 2000. 2020. The company has expanded its second in mid-year 2020. IHG has risen
Marriott has been the largest presence in the sector significantly to eighth from 12th place in 2012, while
player since 2002, overtaking Trump over the past 20 years and has a Dubai based master-developer Emaar has
which slipped to fourth by mid-year 2020. substantial pipeline. This expansion risen to 10th place from 24th in 2007.
2000 2005 2010
1 Trump 1 Marriott 1 Marriott
2 Marriott
2 Trump 2 Trump
3 Four Seasons
3 Four Seasons 3 Four Seasons
4 Hilton
4 YOO
4 Hilton
=5 Banyan Tree Group
5 Hilton
5 YOO
=5 Rosewood
6 Accor
=5 Aman 6 Kempinski
7 Banyan Tree Group
=6 Kempinski = 7 Banyan Tree Group
= 8 Kempinski
=6 YOO
= 7 Rosewood
= 8 Rosewood
=6 Greg Norman
= 7 Aman
= 8 IHG
=6 Canyon Ranch
= 7 Greg Norman = 8 Mandarin Oriental
=6 COMO
=6 Capri Holdings = 7 Accor = 8 Emaar
Footnote: Data collected July 2020 based on brand reported information and Savills Research.
Multi-phase schemes under one brand are counted as a single scheme in that location, similarly
schemes in the pipeline that are part of an existing development are only counted once.
8
Market overview
The Marriott Residences, Penang
Future ranking
2015 2020 (mid-year) (complete + pipeline)
1 Marriott 1 Marriott 1 Marriott
2 YOO
2 YOO 2 Accor
3 Four Seasons
3 Trump 3 YOO
=4 Hilton
4 Four Seasons 4 Four Seasons
=4 Trump
5 Hilton 5 Hilton
6 Accor
6 Accor 6 Trump
7 Banyan Tree Group
7 Banyan Tree Group 7 IHG
8 IHG
8 Rosewood 8 Hyatt
9 Rosewood
= 9 IHG 9 Emaar
= 10 Emaar
= 9 Hyatt = 10 Hyatt 10 Banyan Tree Group
Source Savills Research & Savills International Development Consultancy
9
Global distribution
Branded residences: global distribution
Top brands by region by complete schemes Complete schemes
Parent company in brackets where applicable
NORTH AMERICA EUROPE
1. The Ritz-Carlton (Marriott) 1. YOO Inspired by Starck
2. Trump 2. Kempinski
3. Four Seasons =3. YOO Studio
=3. Martinhal
MIDDLE EAST & NORTH AFRICA
1. Address (Emaar) CARIBBEAN
=2. Four Seasons =1. Four Seasons
=2. Paramount Hotels =1. The Ritz-Carlton (Marriott)
=2. Versace (Capri Holdings) =1. Rosewood
=2. Vida (Emaar) =1. Aman
LATIN AMERICA AFRICA
1. YOO Inspired by Starck 1. Four Seasons KEY
=2. Four Seasons 2. One & Only Number of
=2. YOO Studio (Kerzner International) complete schemes
=3. Fairmont (Accor)
ASIA PACIFIC =3. Club Med (Fosun) 1
=3. Six Senses (IHG)
1. Four Seasons
=3. LUX* 32
=2. YOO Inspired by Starck
=2. Banyan Tree
(Banyan Tree Group)
Top brands by region by complete and pipeline schemes Pipeline schemes
Parent company in brackets where applicable
NORTH AMERICA EUROPE
1. The Ritz-Carlton (Marriott) 1. YOO Inspired by Starck
2. Trump 2. Six Senses (IHG)
3. Four Seasons =3. Mandarin Oriental
=3. Kempinski
MIDDLE EAST & NORTH AFRICA
1. Address (Emaar) CARIBBEAN
2. Fairmont (Accor)
1. The Ritz-Carlton (Marriott)
3. Vida (Emaar)
2. St Regis (Marriott)
=3. Four Seasons
LATIN AMERICA =3. Rosewood
1. YOO Studio
2. YOO Inspired by Starck AFRICA
3. Pininfarina (Mahindra Group)
=1. Four Seasons
KEY
=1. Fairmont (Accor)
ASIA PACIFIC Number of
=2. LUX*
pipeline schemes
1. Four Seasons =2. One & Only
=2. Banyan Tree (Kerzner International) 1
(Banyan Tree Group)
=2. YOO Inspired by Starck
23
Source Savills Research & Savills International Development Consultancy
10Global distribution
There are more than 500 branded residential schemes globally, with 76,000 units combined.
A further 400 schemes are in the pipeline.
BRANDED RESIDENCES
AT A GLANCE
517 schemes globally
76,000 residences
The branded residence
sector has grown
170%
over the past 10 years
2020
Another record year, with
over 100 additional schemes
63% in an urban location
Marriott is the largest player,
with 21% of schemes
The US is home to
183 branded schemes,
the most globally
Top 3 cities by schemes:
Miami (32)
Dubai (29)
New York (25)
By region, Middle East & North
Africa is expected to see the
largest growth, with 156%
84% of schemes
are hotel brands
Source Savills Research & Savills International Development Consultancy
11Chain scale composition
Balancing the (chain) scales
The well-established luxury segment remains the backbone of the sector,
but other chain scales are on the rise
The branded residential sector has Marriott’s eponymous brand Autograph Complete versus pipeline:
historically been, and largely remains, Collection are expected to grow by 250% expansion of upper-upscale
dominated by luxury brands. Luxury each, adding five schemes to their two
hotelier brands (as classified by STR already complete. Complete
chain scales) account for 77% of complete Emaar’s Vida is also adding eight
Midscale
schemes. schemes across the Middle East, Upper-Midscale
0%
2% Economy
There is significant opportunity in joining Swissôtel for the most pipeline Upscale 5% 0.2%
the non-luxury segment, namely upper- schemes by volume, against three
Upper
upscale, upscale and midscale brands. schemes currently open and operating. Upscale
Non-luxury brands account for 31% of the Once these schemes complete, Vida will 16%
pipeline, against the 23% of such schemes be the third largest non-luxury brand
Luxury
open and operating today. Westin and by schemes, behind Westin and Hilton 77%
Hilton are currently the biggest brands in which are predicted to stay in first and
the upper-upscale segment, with 13 and 10 second respectively.
complete schemes, respectively.
The growth of this segment is most Non-luxury by geography
apparent among the players with the In terms of the distribution of the non-
largest portfolio of brands. In the case of luxury segment, North America leads, Pipeline
Upper-Midscale 2% 0% Economy
Marriott and Accor, non-luxury schemes accounting for 43% of completed schemes,
Upscale 6% 1% Midscale
account for 33% of their pipelines the same share it holds of luxury schemes.
combined, compared to 22% of their But, this is expected to change.
operating schemes. The deployment of Asia Pacific is expected to become Upper
Upscale
a wider range of chain scale brands is a the largest region for the non-luxury 23%
pathway to continued growth for these segment (a different story to its future
Luxury
established players. profile in the luxury segment). Upper- 69%
Accor’s Swissôtel is expanding the upscale and other non-luxury brands
most in the upper-upscale segment, with present particular opportunity in
eight schemes in the pipeline across the emerging markets, with lower entry costs
Balkans and the Middle East, up from and hence less risk than luxury brands, ■ Luxury ■ Upper-Upscale ■ Upscale
just one scheme currently open and allowing branded residences to reach new ■ Upper-Midscale ■ Midscale ■ Economy
operating. Accor’s MGallery entered the demand bases.
market in 2019 with MGallery Residences Chain scale composition also varies by Note: may not add up to 100% due to rounding
Source Savills Research & Savills International
Montazure, Phuket. country. Thailand and Vietnam have Development Consultancy
Chain scale variation by country:
Selection of markets with at least 15 schemes
■ Luxury ■ Upper-Upscale ■ Upscale ■ Upper-Midscale ■ Midscale ■ Economy
Share of complete and pipeline schemes
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
United Mexico USA Indonesia UAE Thailand Vietnam
Kingdom
Source Savills Research & Savills International Development Consultancy
12Chain scale composition
a particularly diverse chain scale ‘Lifestyle’ hotelier brands spaces that reflect and embrace the
base. Here, such brands account for Different brand chain scales are not city in which they are located.
almost half (48%) of complete and the only way to reach new markets. W leads the way among these brands,
pipeline schemes. Hotelier lifestyle brands (the majority with 16 complete schemes and 10 in the
Both Thailand and Vietnam are of which are luxury) can tap into pipeline. Westin has the second largest
emerging destinations with deep different demand bases with their own number of complete schemes (13) and is
tourist markets, accommodation design-led, experiential brands. the only non-luxury brand currently in
offerings here also cross the spectrum Marriott’s residential portfolio, for this segment.
of price points, hence these markets example includes the stylish W brand SLS (an Accor brand) is expected
can reach a range of international which offers bold contemporary design to see the largest growth, with just
demand and this is ref lected in their and vibrant social spaces suitable for three complete schemes, but a pipeline
chain scale variation. Domestic hosting music, fashion and other events. equal to that of W. SLS is expanding
wealth creation is also growing, Similarly, EDITION offers a boutique into Latin America, with five pipeline
further widening demand for branded hotel experience, with notable food and schemes located in Mexico and two
residences. beverage offerings and custom designed in Argentina.
The Towers of the Waldorf Astoria New York, Developed by Dajia US
13Market
Xxxxxxx
trends
Cars, fashion and design
A growing branded residence segment. New non-hotelier brands,
from Pharrell Williams to Aston Martin, enter the market
Non-hotel brands are a growing sub- model, and deepen their relationship with but also including Baccarat, account for
segment of the market. Over the past ten their customers. 73% of completed non-hotelier schemes,
years, the growth of such schemes has Eleven new non-hotelier brands, from but only 40% of pipeline, with significant
outpaced that of hoteliers, rising from 11% food and beverage to automotive related growth from fashion (including Fendi
of the total market in 2010 to 16% in 2020. brands, are expected to enter the market and Missoni) and brands known for their
The branded residences sector offers the by 2025. automotive heritage (such as Aston Martin
opportunity for these brands to expand The range of brands in this space is and Pininfarina), accounting for 28% and
their brand profile, diversify their business diversifying. Design brands, largely YOO 24% of the pipeline respectively.
Non-hotelier by brand type:
New entrants emerging from other industries
■ Design ■ Fashion ■ Golf ■ Automotive related ■ F&B ■ Other
100%
90%
80%
70%
Share of schemes
60%
50%
40%
30%
20%
10%
0%
Completed Pipeline
Cyrela by Pininfarina, designed by Pininfarina
Architecture, developed by Cyrela Brazil Realty Source Savills Research & Savills International Development Consultancy
YOO is the pioneering non-hotelier brand deliver a proposed 8,000 units within a designer Roberto Cavalli (acquired by
in the sector and accounts for the largest development that exceeds 420,000 sq m Dubai based Damac Properties) has
share of the market, with 72% of complete and includes 50,000 sq m of retail space. schemes opening across the Middle East,
schemes. As new brands have entered the This would, at a stroke, make Tonino including two schemes in Dubai, one
market, the share of other non-hotelier Lamborghini the second largest non- scheme in Riyadh and one in Manama.
brands has risen, rising from 16% in 2010 hotelier brand by number of units. Similarly, Italian fashion designer
to 28% in 2020, this share is expected Italian car design firm Pininfarina is Gianfranco Ferré has two schemes
to reach 40% by 2025. YOO still has the expected to grow its presence in Brazil opening (under parent company Jumbo
largest pipeline, with 11 schemes. Nine of from one scheme, with six in the pipeline. Group), with a scheme in Limassol
the 11 new brands expected to enter have Pininfarina also has pipeline schemes in (Cyprus) and one in Belgrade (Serbia).
just one scheme each. the United States, Cyprus, and Spain, with Looking forward, media company
New entrants include the likes of a single scheme in each country. Conde Nast has plans to enter the sector.
Pharrell Williams in Toronto and Restaurateur Nobu is entering the With brands including Vogue, Vanity Fair
Tonino Lamborghini in Dubai. Tonino market with a 660-unit scheme in Toronto and GQ, they have the potential to offer
Lamborghini Residences Dubai will spread over two adjacent towers. Fashion a range of tailored living experiences
14Market trends
Khun by YOO inspired by Starck, Bangkok
to deepen the connection with their Non-hotelier by brand type:
customers. New entrants emerging from other industries
These openings highlight the
diversification of this segment and, as more ■ Completed ■ Pipeline
Number of schemes
brands realise the opportunity the sector 0 5 10 15 20 25 30 35 40 45
offers. We expect this trend to continue.
YOO Inspired by Starck
YOO Studio
Asia Pacific leads for Pininfarina
this sub-segment LightArt
The non-hotelier segment is typically Greg Norman
more focused in emerging markets than Bulgari
the branded residence sector as a whole. Armani Casa
Roberto Cavalli
Demand for high-end properties has risen
Kelly Hoppen for YOO
quickly in emerging markets in parallel
Jade Jagger for YOO
to wealth creation. Buyers are often Fendi
attracted to unique products and these Wanders & YOO
lifestyle orientated brands resonate well Gianfranco Ferrè Home
amongst brand-friendly and knowledgeable Fashion TV
purchasers. Asia Pacific accounts for the Tonino Lamborghini
Swarovsky
largest share of non-hotelier schemes today,
Steve Leung & YOO
with 33% of completed schemes, followed
Porsche Design
by 24% in North America. Pharrell Williams
On a country level, the US is the largest Nobu
market with 19 complete schemes, followed Missoni
by India with eight. India is driven largely by Elie Saab
YOO’s presence, as the brand’s second largest Diesel
Bugatti
market for open schemes, behind the US.
Baccarat
American and Indian cities are also
Aston Martin
among the top metro markets for non-
Source Savills Research & Savills International Development Consultancy
hotelier schemes. Miami and New York
currently lead the way, with eight and five
schemes respectively. Dubai is third, with
four schemes open. Mumbai, Pune, London
and Moscow stand joint fourth.
Taking pipeline into account, Latin
America is expected to become the second
largest region for this segment, just behind
Asia Pacific, accounting for 23% of schemes,
overtaking North America with 22%.
Growth in Latin America is largely driven
by Brazil, where YOO Studio and Pininfarina
have 14 pipeline schemes between them. On
a city level, São Paulo is expected to grow
by 250% and match New York for number of
schemes, with seven each. Khun by YOO inspired by Starck, Bangkok
15Brand premiums
The Residences at Mandarin Oriental, Moscow. Developed by Capital Group
Branded residence
price premiums
Branded residences achieve a premium, on average, of 31% over equivalent
non-branded properties, though this figure varies significantly by location
We examined 23 markets across the globe In Phuket and Bangkok, brands have potential success of branded schemes.
to determine the range of premiums that been used to attract interest in schemes in Established markets such as New York
have been achieved on branded residences. fringe-prime locations. However, location is have had non-branded schemes which have
Each premium is based on a sample of still an important determinant of viability become brands in their own right. Branded
properties within each market, matched and a brand alone will not ensure success. schemes are often found in older, but
to comparable, non-branded properties. There has been evidence of slow sales rates well-known properties, while many non-
These are averaged to create an unweighted in some such schemes, where the units branded schemes are new, purpose built
market premium. Our findings suggest an themselves are not market-driven and developments.
average global premium of 31%, but with overly reliant on the brand power. Well-known architects, exceptional
significant variation. services and amenities, supertall
Mature markets face some structures, and ultra-desirable locations
New markets offer opportunity competition seen in non-branded schemes such as
The highest brand premiums are achieved in Established world cities with mature One57, Central Park Tower, and 520 & 432
emerging markets. Here, luxury brands are prime markets, such as Singapore and Park Avenue in Manhattan, have led to a
particularly appealing to the newly wealthy, London, command comparatively lower 22% branded residence discount ,
a mark of success. Recently established premiums (3% and 8% respectively). Some on average.
markets like Bangkok, Beijing, and Phuket mature markets with wide international Premiums for properties in resort
achieve premiums between 40% and 45%, appeal, such as Miami and Dubai, can still locations are varied, dependent on the
comparatively higher than more mature command higher premiums (of 31% and 29% age and composition of market and its
markets. Truly emerging markets with few respectively) due to highly international clientele. Tourist hotspots in Mexico and
branded properties can command prices purchaser bases, with significant amounts Puerto Rico, long-standing destinations for
that are double to comparable non-branded of wealth from emerging markets. Americans, achieve lower price premiums
stock, as demonstrated by both Belgrade and However, market competition and than more recently popular tourist
Almaty with premiums of 120% and 150%. composition play large roles in the destinations like Panama or Phuket.
16Brand premiums
Branded residence premiums for selected cities
London Moscow
Whistler Toronto
Almaty Beijing
Boston Belgrade
Atlanta New York Chengdu Shanghai
Miami Dubai
Los Cabos Bangkok
Puerto Rico
Puerto Vallarta Phuket
Panama City Singapore
Kuala Lumpur
Average branded premium Sao PauloBrand profiles
Brand profiles
We spoke to three brands active in the
sector today about brand reach, ambitions
and their responses to Covid-19
Raffles Boston Back Bay Hotel and Residences
18Brand profiles
Accor
Accor operates 40 brands worldwide, with a pipeline of 18 lifestyle projects. We
of which 16 are actively engaged in the think there’s also a real opportunity for a
branded residence space. These include midscale lifestyle brand. We’ll be bringing
ultra-luxe brands like Raffles and Orient one to the branded residence market in 2021.”
Express, Fairmont and Sofitel in the luxury Covid-19 has brought operational
segment, and a growing portfolio of lifestyle challenges to the sector as a whole. Accor
brands such as SO/ and SLS. Thanks to a has implemented intensified hygiene and
substantial project pipeline, Accor will grow prevention measures under a new ‘ALLSAFE’
to become the second biggest player in the certification, providing peace of mind for
sector globally in the coming years. residents and guests alike.
Flagship developments include the OWO Shared amenities are evolving in response
Residences by Raffles in London, Fairmont too. “Private facilities are increasingly
Residences Century Plaza in Los Angeles important. Our new project in Whitehall,
which is expected to open late 2020, the London, The OWO Residences by Raffles, will
forthcoming SLS Dubai Residences expected provide residents with seven distinct lounges,
to handover early 2021, and the upcoming a private dining room as well as a finishing
launch of Raffles Boston Back Bay Residences. room. This enables a resident to host a private
Jeff Tisdall, SVP of Development, event with their own personal chef while
Residential and Extended Stay at Accor, says, being attended to by Raffles staff.”
“In many instances residential markets are Accor is well positioned to adapt to change.
bouncing back more quickly than the core “We have taken the residential experience
hospitality sector. For our partners who are and expertise that we’ve acquired over
developing mixed-use projects, the residential decades with brands like Fairmont and
component is playing an increasingly critical Raffles and extended it across the entire
role in enabling schemes to move forward Accor platform to new brands and segments,”
with confidence and obtain funding. We’re says Tisdall. “Brands need to come to life in
already starting to see a rebalancing of the shared spaces, and be more than label or
weighting toward residential as a result.” badge on the residences. Foremost, though,
Accor’s wide portfolio of brands means it these are people’s private homes. While
can offer something for every target market. services, global ownership benefits and hotel
Tisdall adds, “Lifestyle brands are an under- integration obviously are important, a design
served area of the branded residence space. which respects privacy and creates the
We currently have six lifestyle brands feeling of an exclusive oasis is paramount.
operating in the branded residence segment, That hasn’t changed.”
Fairmont Century Plaza Residences
19Brand profiles
Four Seasons
Four Seasons is the single largest Angeles, San Francisco, and Marrakesh will
individual brand active in the sector open by the end of the year.
today, with more than 40 open and “Most people will recognise and understand
operating properties. Quality of offering the value and appeal of a Four Seasons hotel,
characterises Four Seasons, with a focus on but Four Seasons Private Residences are now
the best locations. established and recognisable in their own
Four Seasons manages all the properties right – we’ve been doing it for over 35 years”,
that its brand is on, not only front of house adds Price.
services but all aspects of the property Private Retreats, Four Seasons residential
management, ensuring the highest quality rentals business, benefits both hotel owners
of service in all aspects of property ownership. and homeowners through diversified rental
The brand is evenly distributed across income, “In the current environment this is
urban (53%) and resort (47%) destinations, especially attractive to guests seeking all
although the larger unit numbers in urban the benefits of the hotel but with the private
centres means there are majority of space of a home.”
homeowners in cities, often occupying as Covid-19 has accelerated the adoption
their primary residences. of technology in property management.
James Price, Vice President of Residential Four Seasons launched a tailored app
at Four Seasons says, “An early pioneer in through which residents can chat with their
many markets, we’re used to going in and dedicated concierge and procure services,
creating a destination. We’re fortunate in view HOA documents, or book space in the
having a strength of brand that allows us to gym.“Staff are still available to do this in
do that. person, but allows residents to do it all at a
“In the bigger cities we can create touch of a button”, says Price.
differentiated product from what we’ve The pandemic could be a catalyst for
already got and can add more. Europe is longer term changes to demand. Price
a market where branded residences remain concludes “People’s work patterns are
under represented, but finding prime locations changing, as are the things they are
in historic city centres is challenging.” looking for in their living environments.
The brand is making a push into standalone The second home destinations could
properties. Recent openings include the first really benefit, but so too could cities with
standalone project for Four Seasons at more demand for ‘lock up and leave’
London’s Twenty Grosvenor Square, while boltholes. Branded residences can readily
additional standalone properties in Los serve both.”
Four Seasons Private Residences Nashville, Developed by Congress Group and Aecom Capital
20Brand profiles
Four Seasons Private
Residences Fort Lauderdale,
developer by Fort Partners
21Brand profiles
Regent Shanghai Pudong, Developed by
Shanghai 21st Century Hotel Co., Ltd
22Brand profiles
IHG
IHG has grown its presence in the legacy of pioneering international travel,
Branded Residence sector meaningfully with the opening of exciting new hotels, such
in recent years. It now has four luxury as the architectural wonder, InterContinental
brands active in the space, with 16 for-sale Chongqing Raffles City, in both emerging and
residences operating across its Six Senses, established destinations around the world”,
Regent, InterContinental, and Kimpton brands. adds Ramchandran.
Each brand has a distinct residences Each brand appeals to a distinct
strategy. Ananth Ramchandran, Head of demographic or psychographic in different
Branded Residential at IHG, explains “We have ways. “Kimpton Hotels & Restaurants, IHG’s
clearly defined residences offerings luxury lifestyle boutique brand is fulfilling
that reflect the spirit of the hotel brands and international growth ambitions. The recently
are crafted to optimise returns for the project opened Kimpton Maa-Lai Bangkok, with
owner. Each residence aligns with the 362 rooms, including 131 serviced residences,
uniqueness of the destination, whilst balancing is a great example of how Kimpton is bringing
distinction and harmony with the hotel.” a fresh, new approach through design and a
With Six Senses for instance, says commitment to heartfelt human connections,”
Ramchandran, “wellness and sustainability says Ramchandran.
are at the heart of Six Senses and remain IHG now sees branded residences as a
our highest priority when it comes to key component of its overall luxury growth
operating hotels, resorts and residences. strategy. “This is a good time to be in the
These values combined with innovative branded residences business. Since
design and our passion for pushing December 2019, we’ve had two
boundaries beyond the ordinary resonate InterContinental residences launches in
with developers, our guests and residence Thailand and Vietnam, and both have
owners, and ignite people’s imagination. received tremendous interest. This is
In addition to our exotic locations, we are testament to the strength of our brands,
now entering gateway cities such as New our guests’ desire to buy into the lifestyle
York and London. This is a truly exciting time they have come to love, and the growing
for Six Senses.” demand for privacy and seclusion. Branded
InterContinental, meanwhile, is the residences offer that, with the added benefit
world’s largest luxury hotel brand. of access to world-class facilities and
“InterContinental continues to build on its amenities.”
Six Senses Residences Antognolla, Developed by VIY Management and Alessio Carabba Tettamanti
23Macro trends
The Covid-19 pandemic
and branded residences
Covid-19 has transformed the way we live, work and travel. Developers are
looking again at their product in response to the changing demand
Operators of branded residences have While the pandemic has disrupted multiple branded residences. Rising US tech
responded with new operational practices. established sectors, most notably retail and centres such as Seattle, San Jose and
With the associated economic downturn hospitality, residential remains resilient Austin, where existing supply is lower,
poised to be the greatest seen since the where underlying supply and demand offer most potential (see chart below).
Second World War, what are the prospects dynamics are favourable. Downside risks Counties adding a large number of
for the sector? do remain, and a weaker economic recovery wealthy households, and at a higher
and weak employment markets may hit than average rate over the next five years,
New economic realities rental demand. include China (+169%), Israel (78%)
The global economy is forecast to contract In spite of the wider economic turmoil, and Germany (74%).
by 4.4% in 2020, the Eurozone by 7.9% HNWI wealth is forecast to fall by just 4%
and the US by 3.7%, according to Oxford in 2020 then rebound in 2021, according to The product response
Economics. But unlike the Global Financial Morgan Stanley. This is important, because As activity returned in residential
Crisis, this downturn is not rooted in the aff luent, globally mobile individuals are markets globally, changes to the way
banking sector. Interest rates are at record branded residences’ primary demand base. people live and work in the wake of the
lows making mortgage debt affordable. The US will add the largest number of pandemic are shaping buyer preferences.
Residential markets were one of the first high-income households over the next five According to Savills Global Residential
property sectors to bounce back. years, some 1.9m with incomes greater Market Sentiment Survey, a third of global
Institutional investors, meanwhile, than $250,000. The US is already the markets reported increased interest
are pursuing ‘beds and sheds’ strategies. world’s most developed market for from buyers looking to upsize their main
Locations adding the most wealthy households over the next five years
■ 5-year change in number of higher income households 5-year change in % of high income households
Top cities Top countries
150,000 50% 200,000 200%
1.9m
Additional households
Additional households
40%
150,000 150%
100,000
Growth
Growth
30%
100,000 100%
20%
50,000
50,000 50%
10%
- 0% - 0%
New York
Los Angeles
Houston
San Francisco
Dallas
London
Hong Kong
Seattle
Chicago
Dubai
Washington DC
Abu Dhabi
Boston
San Jose
Atlanta
Miami
Austin
United States
China
UAE
United Kingdom
Australia
Germany
Switzerland
Israel
Source Savills Research using Oxford Economics Source Savills Research using Oxford Economics
24Macro trends
Rosewood Residences São Paulo, Brazil
residence. This growing desire for space, interaction with the concierge, reducing
coupled with increased homeworking, the need for human contact. Meeting the
could give resort schemes a boost. Golf Enhanced cleaning regimes and air climate challenge
resorts in particular may benefit, providing filtration systems will play a role. The Ritz- Covid-19 has shown what the real
access to a sport made for social distancing. Carlton in Amman (forthcoming), estate industry can do when it comes
At a scheme level, the balance of for example, is utilising an air-conditioning to tackling an immediate threat. The
private to shared space may need to be system based on UV-C light to neutralise innovation displayed by the industry
reconsidered. Flexibility is key here, viruses and bacteria in the air. Miami’s to deal with the pandemic now needs
space that can be configured as an Legacy Hotels and Residences goes a step to be applied to tackling its rising
additional bedroom, study or even a further and will include a 100,000 sq ft carbon emissions and contribution to
home gym depending on occupier needs healthcare facility on site. the climate crisis at every stage of a
have become increasingly important to building’s lifecycle.
purchasers. Private terraces or gardens Evolution not revolution Sustainable development and
now matter more too. Most changes though, represent an management practices now need to
The majority of branded residential evolution rather than revolution in be applied across the building and
schemes are towers. Additional cores, branded residential design and operation. management process. ESG is rising
contactless lifts and wider circulation areas Fundamentally, a branded residence offers on investor agendas, and consumers
should be considered, but the trade-off is a residents private space with the benefit of are taking note too. Occupier benefits
loss of saleable residential space. amenities when needed. may include lower running costs and
Shared amenities, historically a key For this reason we are seeing an even improved wellbeing. Certifications
selling point of branded residences will greater emphasis placed on the sector, such as LEED and WELL confirm
remain important, but their usage may particularly from hoteliers looking to those qualities in an asset, while
change. Apps that allow residents to book offset their exposure to hospitality in local regulations are increasingly
facilities and cap occupancy levels will assist light of the challenges that sector is facing. driving adoption.
in the short-term. These apps also allow
25Outlook
The sales and
marketing perspective
Rod Taylor, Savills International Residential Development Sales
The events of 2020 have had a huge impact on High-speed internet, outside space and out-of-season, staying for longer periods
the way that prospective buyers view lifestyle the ability to receive food and beverage or even as a base for working remotely.
and branded residential offerings. The way in safely will be required not only by branded Those projects which can accommodate
which projects are being marketed has had to residential home owners but also hotel their needs over longer periods without
change in response. The limitations of travel guests and a branded residence will have a compromise in the level of service or
have meant that developers and brands have to be designed effectively to accommodate amenities they offer will fare better than
needed to alter how they communicate with these requirements. those which are not able to do so. For
prospective buyers resulting in a heavy focus Lifestyle projects which can offer visitors example, a branded residential project
on digital marketing and virtual engagement. and home owners easy airlift with a remote which closes part of its hotel services during
The change in what buyers require has destination feel will likely benefit from the the off-season will not be as an attractive
also affected how developers have had to changes in buyer requirements. We also proposition to a buyer who may now wish
design their offering, from their unit layouts, anticipate a shift in how buyers are using to spend the larger part of the year in a
the configuration of a building through to their homes within branded residential home they previously only used sporadically
their amenities and services. projects, potentially wishing to use them during the peak operational months.
Lefay Resort & SPA Dolomiti
26Savills World Research
We’re a dedicated team with an unrivalled reputation for producing well-informed and accurate analysis,
research and commentary across all sectors of global property.
Paul Tostevin Sean Hyett Kelcie Sellers
Director Analyst Analyst
+44 (0) 20 7016 3883 +44 (0) 20 7409 8017 +44 (0) 20 3618 3524
ptostevin@savills.com sean.hyett@savills.com kelcie.sellers@savills.com
Savills International Development Consultancy
Savills International Development Consultancy provides market data driven consultancy to developers, investors and brands
in luxury residential and resort markets across the world. Services include pre-acquisition development consultancy, project
feasibility studies, brand premium analysis and a range of branded residential consultancy services. Since 2007, Savills
International Development Consultancy has provided consultancy services for over 250 prestigious branded and mixed-use
projects throughout the world.
Riyan Itani Peter Grmek
Director, Head of Savills Associate
International Development +44 (0) 20 7330 8664
Consultancy peter.grmek@savills.com
+44 (0) 20 7016 3759
ritani@savills.com
Savills International Residential Development Sales Savills Global Residential
Rod Taylor Annabelle Dudley Hugo Thistlethwayte
Director, International Associate Director, International Director, Head of Global
Residential Developments Residential Developments +44 Residential Operations
+44 (0) 20 7016 3727 (0) 20 7016 3890 +44 (0) 20 7016 3727
rdtaylor@savills.com adudley@savills.com hthistlethwayte@savills.com
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,
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
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