Al igual que muchos otros sectores, el mercado inmobiliario está obligado a innovar constantemente para sorprender a sus clientes. Y una de las últimas tendencias que está teniendo más éxito, tanto en España como en el resto de mundo, es la de las conocidas como branded residences.
Do you want to know what this new housing concept means and why it’s becoming increasingly popular? Keep reading!
What do we mean when we talk about branded residences?
Also known as branded residences, these are luxury residential projects that involve a collaboration between a development group and a hotel operator or brand. As a result, these complexes stand out for:
- They are traditional-style accommodations, but they are managed by large hotel chains or brands.
- Involve these hotel chains or brands in the design and development of the real estate project.
- It should, therefore, also feature a unique and distinctive design.
- To offer personalized, exclusive, and generally luxury experiences and services to their tenants, closely tied to the hotel chain or the brand providing them.
What is the origin of branded residences?
Although they are a trendy real estate development model that is clearly on the rise in countries like Spain, branded residences are not a new concept. In fact, the first residential-hotel complex of this type (the Sherry-Netherland) opened nearly a century ago, in 1927, on Fifth Avenue in New York City.
At that time, the trend in the United States was for hotels to sell residences within their complexes. Although this concept did not really gain widespread recognition until the 1980s, as both hotel chains and other major companies in sectors such as fashion and motorsports discovered the advantages of entering the real estate market and, consequently, of linking their brands to high-quality experiences in the residential sector.
What types of branded residences are there?
There are four types of trademark registrations. They are as follows:
- Co-located: The hotel chain participating in the branded residences project operates it at one of its properties. This allows tenants to access certain services offered by the hotel itself, as well as enjoy the common areas.
- Hotel Residences: These residences are located within the hotel’s own facilities and are managed by the hotel. Therefore, within the same building, you can find both rental rooms and properties marketed under this model. The advantage is that owners of the latter have access to all the services offered by the hotel, as well as the areas designated for hotel guests.
- Independent residences: These homes are located outside the hotel’s own premises, so there are no shared areas. However, in many cases, the goal is for them to be close enough to the main complex so that tenants can enjoy some of its amenities.
- Residences outside the hotel or the brand’s resort: These are residential projects built on separate sites or properties. In this case, they are simply associated with the luxury brand and offer exclusive experiences for guests; however, these experiences are not directly linked to those found at a hotel resort.
What is the main use of branded residences?
Typically, these types of projects are designed for clients looking to enjoy a second home in tourist areas. This arrangement benefits both parties: it allows owners to use the property and access its exclusive amenities during a specific time of year, depending on the agreed-upon time restrictions, while also generating income when they are not living there and the property is rented out. Meanwhile, it allows hotels to expand their inventory during certain times of the year and offer an innovative package that includes a wide range of services.
And all of this without forgetting, of course, the other key player in making the branded residences: the developers. For them, the advantages are also clear, since the presence of a top-tier brand allows them to raise prices and attract a high-net-worth clientele; it also ensures the real estate project has greater resources to deliver a high level of quality and attention to detail. After all, let’s not forget that branded residences enhance the tenant experience through convenience, comfort, and sustainability.
Why are branded residences among the latest trends in the Spanish market?
In Spain, these luxury, branded residential complexes are a very recent phenomenon, but they have quickly become a trend. The first project of this kind dates back to 2017 and was developed in Tenerife, and there are now four more that have been completed.
Among the reasons for the positive reception this concept is receiving are:
- The boom in the luxury second-home market, fueled by the pandemic and the resulting demand for homes that offered safe places to isolate oneself from the rest of urban areas.
- Rising costs due to higher material prices, as a result of the war in Ukraine. This has led investors to seek greater security when investing their money and seeking a return.
- The Spanish luxury real estate market is currently experiencing a boom. Specifically, in 2022, demand for homes priced at more than 2 million euros grew by 55%, with nearly 8,000 transactions completed.
- The confidence that foreign investors, for their part, are showing in the Spanish real estate market and, in particular, in luxury properties. Our country is currently the fourth-largest recipient of foreign investment in the world, with a total of 12,170 million euros in 2022, representing a 59% increase over 2019.
Current Status and Outlook for Branded Residences in Spain and Around the World
The real estate market has welcomed the modern concept of branded residences , and all signs point to a fruitful relationship between the two in the future. A recent report predicts that these branded residences will grow by 55% globally through 2026, thanks to 324 projects comprising 26,000 residential units across 52 countries. Of these, only 57.4% (186) have already been completed. This will likely allow the sector to experience an annual growth rate of 12% through 2026, with a cumulative growth of 55% by that year.
However, Europe is far from being a leading market for this model, because, for now, its projects account for only 13% of the total. And this is where Spain has the potential to become the continent’s leading destination for investment in luxury residences. In fact, the outlook is currently very positive, as the supply is expected to triple and reach 1,200 units within four years.
These will be made possible by the dozen projects currently underway for the next four-year term, with the Costa del Sol serving as the main draw for the development of the branded residences. It is estimated that in the province of Málaga alone, there will be 900 such homes by 2027, with Marbella accounting for 93% of the future supply. However, the goal is also to promote these investments in other tourist destinations across the country, such as the Canary Islands, Madrid, and Barcelona.
Find your future home with CULMIA’s new developments
What do you think of the branded residences? We hope you found this new trend in the Spanish real estate market interesting. And if you’re looking for a place to call home, don’t forget to check out the developments we have for you. You might just find your dream home among them!
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