Business management & development
balanced mix of urban and resort developments with sustained demand for secondary homes in resort destinations and, increasingly, for primary homes in urban environments.”
“The typical subjects around the Med remain
An elegant living room from one of the luxury OWO Residences by Raffles in London.
The top three hotel brands in the sector are currently Four Seasons, The Ritz-Carlton, and St. Regis, the latter having the largest pipeline. Indeed St. Regis is projected to increase its supply by 138% by 2027, according to Savills. Of the top 10 hotel brands, five have pipeline growth figures of more than 100%, and a further two could see growth of 90% over the same period. According to the latest survey from real estate agents Knight Frank, which conducted a detailed survey earlier this year, the sector will be fuelled by further wealth creation around the world. Although the global population of ultra-high-net-worth individuals (UHNWIs) declined by 3.8% in 2022 due to sharply higher interest rates and more challenging geopolitical conditions, more positive long-term trends will see that number grow by 28.5% between 2022 and 2027. The report also predicts that new buyer demand will be global, and besides the dominant markets of the US and China, there will be significant growth in interest from UHNWIs from Canada, Australia, India, Germany, and the UK. There will also be significant interest from Australasia, Asia and the Middle East. These clients will likely be looking for second homes, including branded residences, due to an increase in wealth and greater mobility, as well as a desire among wealthy investors to expand their residential property portfolios.
Where in the world?
Cities such as Hong Kong and Singapore are hotbeds of new development, according to Knight Franks, while in Europe there is activity in the UK, Portugal, Turkey, France, Italy, and Greece. Dubai and Saudi Arabia also stand out, though there is also a pipeline of projects in the US, the Caribbean and Mexico. “Incredibly, we are observing growth across the globe,” remarks Picenoni. “The most notable shift in geography was as North America gradually forfeited market share to such regions as Asia Pacific, Europe and the Middle East. Moreover, there is a relatively
20
popular,” adds Perret. “It then depends on the underlying conditions of the development, but is mainly dependent on location and the likelihood of being able to sell off-plan.” Accor, which has developed branded residences for more than two decades under iconic brands such as Fairmont and Raffles, is one player that has developed truly turnkey solutions for both development partners and homeowners. Accor One Living brings together specialised project teams comprising cross-functional experts who can view mixed-use developments from the perspectives of both hotels and branded residences, supporting each phase in the total project life cycle. The team that supports initial planning continues through the marketing and operating phases until completion, ensuring the original vision is realised. Accor has some 40 branded residence communities around the world, and more than 100 projects under development across 24 distinct brand collections. By 2027, it expects to have more than 150 branded residences in operation, an increase of more than 300%.
A vision of the future
Many hotel chains are making a play in the branded residences market, though non-hotel luxury brands have also gained traction by offering a unique, product- oriented lifestyle to a loyal set of customers. “Hotel brands continue to deliver an unparalleled, service-oriented lifestyle underpinned by the latest in luxury residential living,” says Picenoni. “Brands entering the space without thoughtfully preparing a strategy that is based on reliable market intelligence will fail, while traction is reserved for those brands who carefully plan their residential development strategy.” More luxury brands not yet active in the branded residential space are expected to make a move where significant latent demand exists, while upscale brands in the hotel space will likely become more aggressive and potentially investment-product-oriented. “While it remains an attractive proposition in general terms, it needs to be carefully thought through,” says Perret. “The more expensive a unit, the more challenging it is to have a realistic level of return on it. Over-promising and under-delivering is detrimental to brand reputation.”
Competition in the market is set to increase sharply. So, too, are costs. The future will be determined by how hungry investors are, and how well brands can read the needs of UHNWI clients and differentiate themselves to provide both the experience and the returns that they seek. ●
Hotel Management International /
www.hmi-online.com
Grain London
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53
