Dubai is set to overtake New York as the global branded residences capital by the end of 2019, with a pipeline of just over 20 schemes
The branded residences sector has grown exponentially in the last decade and is tipped for more yet growth, said a new report.
The number of branded schemes has grown by 195 percent in the last decade and there are more than 430 branded schemes globally with a combined total of 65,000 units, it said.
At a city level, coinciding with Expo 2020, Dubai is set to overtake New York as the global branded residences capital by the end of 2019, with a pipeline of just over 20 schemes.
The ‘Branded Residences Report’ from property company Savills said a record number of schemes opened this year, with 60 projects delivering more than 9,000 additional branded units across 21 countries.
This record is set to be broken again in 2020 when nearly 70 schemes are due to complete, Savills said.
Hotels drive branded residences
Hoteliers with hotel-branded schemes are driving the growth in branded properties, accounting for 86 percent of the completed schemes and 96 percent of the pipeline supply.
Marriot International, whose brands include Ritz Carlton, St Regis and W, is the market leader. However, Accor is rising fast and has a pipeline equal to Marriott International.
In the Middle East region, Emaar Hospitality Group has an extensive pipeline across the UAE and wider Middle East under its Address and Vida brands.
Non-hotels brands enter the fray
Savills predicted last year that new lifestyle, non-hotel brands, would enter the sector.
The prediction has played out with Condé Nast announcing its plans to move into the branded residences marketplace.
While the company is best known for its magazines, Condé Nast expanded into hospitality in 2003 with Vogue Cafés and GQ Bars, making residences a natural progression for the global media brand.
The birthplace of branded residences, North America is home to 40 per cent of all schemes, however other regions are growing rapidly, the report said.
Asia Pacific, led by Thailand and Vietnam, currently has the most schemes in planning and under construction (23 percent of pipeline), followed by MENA (21 percent of pipeline) where the UAE and Egypt account for most of the forthcoming supply.
Latin America is a major growth market. The number of schemes in Mexico are set to more than double in the coming years as new projects are set to open in both resort and city locations.
“As market conditions and buyer preferences evolve, there is huge potential for the branded residences sector. Branded property is positioned to stand out in more challenging market conditions,” said Paul Tostevin, director, Savills World Research.
Savills analysis shows that the average premium for branded residences over equivalent non-branded product, stands at 35 percent. This figure varies significantly by location, brand and operator.
In emerging cities, such as Kuala Lumpur, the premium can exceed 70 percent.
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