THE RISE AND RISE OF THE BRANDED RESIDENCE
When the world’s first hotel-branded residences launched, it was the height of the Roaring Twenties, a period of post-war euphoria and economic boom.
The Sherry Netherland Hotel
Amid it all, in 1927, the newly-built Sherry Netherland hotel on Manhattan’s Fifth Avenue – whose long-term guests have included David Bowie and Diana Ross - announced 165 private apartments for sale, with perks such as room service from the Cipriani restaurant.
Fast forward nearly 100 years and The Sherry is now a quirky, old school icon whose apartments cost up to US$3m – and we are poised to enter what could be the 21st century’s equivalent of the Roaring Twenties, as post-pandemic we chomp at the bit to return to normality, travel and spending again.
Throughout it all, showing an ability to thrive in times of adversity, is the branded residence sector, which has particularly gained traction in the last decade. “The growth of branded residences continues to be driven by a healthy mix of long-term megatrends and far reaching shifts in demand that are accelerating as we recover from the pandemic,” says Jeff Tisdall, Senior Vice President Development, Residential & Extended Stay at Accor, the hotel giant whose branded private residences include Raffles’ flagships in Singapore and Shenzhen, and from 2022-2023, new Raffles-branded residences in London and Boston.
Diana Ross, arriving at The Sherry Netherland Hotel 1979
Tisdall describes the typical ultra-high net worth consumer of branded residences as “extremely mobile and globally minded”. And what they want is a turnkey ownership experience: 24/7 five-star hotel-style living, privacy and exclusivity.
There are now more than 500 branded residence schemes – with 80,000 units between them – worldwide, and 400 new schemes in the pipeline. The sector is growing by about 20% a year and, until recently, continued to be dominated by the US – in particular, New York and Miami. But Asia – notably Thailand - has seen stealthy growth as a major player in the branded residence sphere, along – to a lesser extent – with Europe, the Middle East (luxury branding is in Dubai’s DNA) and North Africa. Australia is also a new player, most prominently with the One Barangaroo Crown Residences, overlooking Sydney Harbour, where penthouses priced up to AUS$60m are among Australia’s most expensive properties.
London has been slower to latch on to branded residences – partly, thinks Tisdall, because it lacks the “green field” opportunities for new development that exist in expanding cities such as Dubai. “London sees more reliance on conversion projects, which do not always offer enough scope to integrate a luxury hotel and residences,” Tisdall comments.
Raffles Residences Boston
The exceptions, however, have become global landmarks. 199 Knightsbridge, which launched in 2005, broke price records when one of its apartments sold for £90m in 2017. Bulgari, and then the Mandarin Oriental at One Hyde Park, quickly followed suit in a micro-location now defined by its super-prime branded projects.
And only a new-build opportunity would work for The Peninsula London, whose hotel and 26 branded residences will complete later this year, after a near 30-year search by its owners and operators, The Hongkong and Shanghai Hotels. “We can’t cram all our infrastructure requirements into an existing building as that doesn’t work, so we knocked down the old office buildings that were there and have built an entirely new hotel, including five storeys underground,” comments The Peninsula Residences London’s head of sales, Simon Fernandes.
As the branded residence concept expands geographically, so, too, does the variety of brands entering the sphere. Luxury hotels such as Ritz-Carlton, Four Seasons and Raffles still account for the vast majority of branded schemes – which makes sense.
A branded scheme relies so much on trust and reputation, who better to service your lifestyle and home than a brand with a long history of first-class hospitality?
“It’s not just about superficial design or décor. Buyers need to ask whether they are getting the bones and back of house benefits of that hotel brand,” says Clement Kwok, CEO at The Hongkong and Shanghai Hotels, the developers and operators of The Peninsula London.
Alternative brands are collaborating with landmark residential schemes for the first time too, however, from automotive to fashion names, rock icons to celebrity chefs. How successful they are depends on whether there is a culture of brand loyalty in a given location, and how specific brands are perceived.
Age is a major factor. Younger buyers, under 45, have a strong sense of brand loyalty and want to deepen their relationship with the brand.
While they may be more open to emerging brands in the market – in more hipster, outer prime areas such as Shoreditch in East London – they also appreciate the aspirational grandeur of established, luxury brands such as Raffles and The Peninsula, which both complete in London later this year. “We’re a known entity. People know they will get exceptional service,” says The Peninsula’s head of sales, Simon Fernandes.
The upwards trajectory of the branded residence sector looks set to continue, both in the number of schemes and the diversity of offering, including the more experiential offerings of “lifestyle” brands, such as Accor’s SLS and Delano.