Authored by: Ankit Kansal, MD at Axon Developers
Branded residences are not new in the world as it has existed as a concept since the 1920s. Nevertheless, it was during the last decade, it remerged as a popular luxury real estate asset class, drawing attention of both brands and developers alike. Leading hospitality brands such as Mandarin Oriental, Ritz Carlton, Aman, Marriott, Four Seasons, ventured into the space. The frenzy was soon followed by other non-Hospitality brands such as Ducati, Aston Martin, Versace, Armani, Mercedes, etc.
While initially it was New York and Miami, were Branded Residences were finding tremendous patronage, the concept goes to other cities like a wild fire. Across the world, in places such as London, Paris, Istanbul, Sao Paulo, Bangkok, Hanoi, Ho Chi Minh City, etc. Branded residences are becoming the new face of premium realty. Its growth is rooted in multiple factors such as growth in luxury tourism, increased fascination with expansive homes, and a general surge in UHNIs all over the world.
Branded Residences Growing in India at a Staggering Pace
Though still at the tip of the iceberg, the concept of Branded Residences is moving at a scorching pace in India. The South Asian economy comprise around ~ 10% of the overall global supply lines. India is home to over 2900 Branded units spread across the length and breadth of the country. As per research by SKYE Hospitality, the market of Branded residences in India is pegged at around INR 27,000 crores with a substantial supply lines concentrated in and around the national capital.
Major hospitality chains such as Marriott, Taj, Ritz Carlton, Leela, Oberoi, etc. have launched Branded Residence projects in the country. Meanwhile non-hospitality brands such as Yoo, Versace, Trump Towers are also actively manoeuvring in the luxury space, lured by its long-term potential. Other brands such as Wyndham, Atmosphere Core etc. have also shown interest to launch projects in near future.
5 Reasons Indian Branded Residences will Continue to Evolve
Mentioned below are some of the factors that are driving the Branded Residence market in India:
- Growth in well-heeled Urban Households: Urban India has seen spurt in well-heeled affluent households comprising of self-made start-up owners, C-suite corporates, and creative mavericks alongside traditional business owners and family office scions. These people with surplus income look for exclusive spaces with access to top tier amenities. They have refined tastes and would not mind to pay a premium for topline amenities such as concierge, wine cellars, private lounges, sporting arenas, pool decks, exclusive meeting rooms, wellness centres, etc.
- Authenticity Guaranteed: Due to the presence of a bigger brand, the quality of the product is always guaranteed. A brand will be particular about any product they are involved in and hence will get the due diligence done at their end. From fit-outs to construction everything will tracked and verified. This can give a tremendous amount of peace to the homebuyers and mitigates against any potential risk.
- Developers find it easy to sell Branded Residence: The developer fraternity is showing great interest in the Branded segment as due to the presence of a reputable brand, it is easy to offload the inventory at a premium price. Moreover, one can leverage the brand name of the partner and access their marketing bandwidth, which further helps in overall sales cycle.
- Smart Investment Decisions: Branded Homes are surely a very prudent investment decision that can give elevated appreciation and rental yield compared to other similar products in the market. It is also a suitable choice for expats as they can use them for some part of the year and for the remaining the same can be leased for long rentals, giving a recurrent stream of robust earning.
- Brands can contribute in other ways: In many Branded projects, the brands role is no more limited to rendering the name. Rather brands are playing an active role in designing, asset management, aesthetics, etc. They can also play pivotal roles in property maintenance and management. In Hospitality-based projects additional on-demand services such as in-house dining, hospitality, pet care etc. can also be offered, thereby enriching the overall offerings.