In 1927, the Sherry-Netherland apartment hotel marked a milestone as the world’s first “branded” residence on New York’s Fifth Avenue. Leveraging the reputation of the popular Sherry’s restaurant, the property, with its Gothic minaret and elegant apartments, made waves in the realm of luxury real estate. Fast forward almost a century… and here, the category of “branded” residences has experienced a significant increase, growing by about 150% in the last decade. Today, the landscape boasts over 700 branded residential developments, totaling over 100,000 homes in various stages of completion or planning globally, according to WATG Strategy. And a doubling of the sector’s size is expected by 2027, fueled by increasing interest in established markets like New York, Miami, London, Dubai, as well as in emerging markets like Oman, Poland, and Guyana.
What distinguishes recent years, besides the exponential growth of the sector, is the variety of brands eager to participate, particularly in the luxury segment. In addition to traditional hotel companies, fashion and jewelry houses like Armani, Roberto Cavalli, Fendi, and Bulgari, along with car manufacturers like Porsche, Bentley, and Aston Martin, have entered the arena. Chris Graham, founder of Graham Associates, defines a home with these designer labels as a “trophy purchase.” For both consumer companies and real estate developers, such collaborations prove advantageous for both parties. Recognizable brand names can command premiums on high-end developments, even in the most competitive markets. Edgardo Defortuna, president and founder of Fortune International Group in Miami, emphasizes the tangible impact of these brands, not only in terms of premiums but also in accelerating the sales processes. Historically, hotel companies have dominated the development of branded properties, constituting approximately 84% of the sector.
The expertise of hoteliers in the development and management of properties aligns well with the concept of residences as long-term versions of short-stay hotel rooms. Hospitality brands continue to be attracted to real estate, with Peninsula, Aman, and Rosewood making significant strides. Peninsula Residences London, with a reported sale of a penthouse for around $123 million to hedge fund magnate Ken Griffin, showcases the allure of these developments. Aman reported sales of branded residences totaling $2.4 billion in 2022, and Rosewood Residences has expanded its pipeline by over 200% in the last two years. Contributions are also expected from Mandarin Oriental, Six Senses, Equinox, and Faena. However, the shift to branded residences without adjacent hotels is not without challenges, as providing exclusive services and amenities solely for residents can result in higher maintenance costs. The market becomes more intricate for non-hospitality brands venturing into residential development. Companies like Jacob the Jeweler, Nobu, and Casa Tua, originally renowned for their expertise in jewelry, sushi, and Italian cuisine, are becoming lifestyle brands with real estate projects. Miami, a hub for international buyers and a city ranked among the top for branded developments, is experiencing an eclectic boom. Luxury automobile brands like Bentley Residences, Aston Martin Residences, and Porsche Design Tower are making significant strides, offering unique amenities like the futuristic “Dezervator” elevator in the Porsche tower.
Porsche and Aston Martin are targeting their enthusiasts, offering exclusive deals like a limited-edition Aston Martin Vulcan race car with a $59 million penthouse in Miami. As these brands enter the residential development space, they emphasize maintaining the aesthetic and craftsmanship associated with their luxury vehicles. Bentley’s first residential project, scheduled to open in 2026, aligns with the brand’s commitment to sustainable luxury. By 2030, Bentley aims to sell 100% electric cars, targeting a more progressive audience interested in sustainability. In New York, the third-largest market for branded residences globally, Aman exemplifies the trend with ultra-luxury residences, a five-star hotel, and a private club within a beautifully restored Art Deco building. This integrated approach, offering top-end buyers every imaginable indulgence under one roof, indicates a growing desire for security and confidence in markets where wealth is still relatively new.
Source: Robb Report
Photo: Bentley Residences