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Latest news

Why appeal of upscale branded residences remains undiminished amid the pandemic?

SCMP
November 18, 2020, 02:52 PM GMT + 7
  • With the segment recording 170 per cent growth in the last 10 years, top brands like Versace, Armani and Porsche have lent their names to exclusive projects.

Demand for branded residential property will pick up after the temporary setback from the Covid-19 pandemic as investors will be willing to pay top dollar for such developments because they offer exclusivity and privacy, two things that matter a lot to the rich, say analysts.

A residence at The Twenty Grosvenor Square 

And there is a reason for such optimism – the segment which typically involve a partnership between a developer and a luxury hotel brand or a prestigious brand – has registered 170 per cent growth over the last 10 years. And with its popularity taking off in recent years, high-end fashion labels such as Versace and Armani and luxury carmaker Porsche have lent their names to exclusive projects.
“It comes as no surprise that the effects of Covid-19 have upset the branded residential sector in a similar fashion to that seen across global real estate markets,” said Riyan Itani, head of international development consultancy at Savills.
“Luxury buyers have understandably been more reluctant to invest in holiday homes and the travel limitations brought on by the pandemic have certainly negatively impacted sales in 2020.”
Since the world’s first branded residence – The Sherry-Netherland, overlooking New York’s Central Park opened its doors in 1927, the number of brands under the category has risen to 130, and is forecast to reach almost 160 by 2025, according to Savills.
In the last 10 years, more than 52,000 branded residential units across 370 schemes globally have come on to the market. Such partnerships have proved so successful that branded property projects are now present in over 60 countries worldwide, according to Knight Frank.
Although such developments were originally concentrated in North America, Asian countries such as Thailand, China, Indonesia, Vietnam and India are now among the top 10 countries that have the largest share of branded residences in the world, according to Savills.
Owners of units at branded residences usually enjoy exclusivity, better privacy than those living in regular residential projects, and get hotel-like hygiene and services, features that are much sought after amid the coronavirus pandemic.
“The supreme level of servicing offered often permits the opportunity for contactless living, through the incorporation of apps and new technology to deliver contact-free delivery of services, with residents finding little need to leave their home,” Itani said.
However, these residences command premium pricing, which could range between 5 per cent and 170 per cent, Itani said. In Beijing, the average premium is at least 40 per cent, while in Shanghai it is 30 per cent.
Some recent additions to the segment include Waldorf Astoria’s The Towers in New York, expected to be completed in 2022, and the world’s first Four Seasons stand-alone branded residence, Twenty Grosvenor Square, by Finchatton in London.
“Integrated hotel branded residences will always be sought after due to the lure of service living combined with heightened consideration for health and well-being and low-maintenance,” said Victoria Garrett, head of residential for Asia-Pacific at Knight Frank.
The Twenty Grosvenor Square offers residents a garden library with direct access to a courtyard terrace, where they can have informal meetings with coffees and teas served by the Four Seasons.
The project also has a cinema room that can accommodate up to 18 people, and a 25-metre (80-foot) pool, gym, and a spa with treatment rooms.
“Branded residences have more appeal in today’s world than ever before,” said Alex Michelin, co-founder at developer Finchatton.
“Branded residences typically come with extremely high levels of personal service and in today’s world the convenience of being able to pick up the phone and have dinner prepared by world leading chefs or have a personalised well-being and fitness programme created for you by top trainers is invaluable.”
Not all branded residences, however, enjoy prestige. Following the election of Donald Trump as the US president, the Trump Tower had become one of New York’s least-desirable luxury buildings owing to the huge security in the premises, Bloomberg reported last year.

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