Today, all you need is to buy a branded property. According to Knight Frank's Global Branded Residences report, branded residences represent a special segment of the market that, despite the challenges, is performing remarkably well. This raises questions and requires detailed consideration.
What is branded property and why the demand for it is increasing
Branded properties are designed, built, finished and furnished with the support and standards of a well-known brand. Branded residences are sold freely on the market or rented out on a long-term basis (depending on the status of the property). However, the co-operation between the brand and the buyer does not end at the moment the sale contract is concluded. After the sale, the brand takes over the functions of the management company and provides the new owner with service in accordance with all the standards of the hotel brand.
The very emergence of such a concept as branded property became possible only in the XX century with the invention of high-speed transport. Due to the fact that travelling time has significantly reduced, it is a matter of hours to visit your villa located in another country or even on another continent.
However, buyers who have the means to purchase luxury residences are usually very busy people. They perceive irrational use of time as a loss. And organizing everyday life at the usual high level of comfort for such people requires not so little time. It is not for nothing that many celebrities, who earned enough to buy their own residence, still chose hotels where they did not have to take care of the organization of everyday life.
This is how the demand for branded property began to form, combining the best qualities of luxury housing and hotels. The first branded property in history is considered to be The Sherry Netherland apartment building, built in 1927 in New York (Manhattan). At first branded real estate was built mainly in the USA (in South Florida, New York) and England. At the end of the XX century the demand for luxury residences in the UAE, Asia and especially in Thailand (Phuket) increased.
But the real fashion boom for branded property began in the XXI century. According to statistics, from 2010 to 2020, the number of branded properties worldwide increased by 170%. Now the operators of the branded property market are actively exploring Greece.
Brands are market operators
Five-star hotel chains have the widest experience in managing luxury residences and organizing impeccable service. Therefore, it is not surprising that 31% of the branded property segment is occupied by the Marriott International hotel chain (Ritz-Carlton, St. Regis and etc.). In the second place (10%) is Four Seasons.
In the 21st century, famous premium brands have entered the market, which until now were not associated with real estate. Today, Porsche, Versace, Lamborghini, Armani actively promote their branded real estate. In terms of the number of branded properties built (more than 50), the YOO designer brand has surpassed the achievements of most five-star hotel chains and is close to the market leaders.
Advantages of branded property
On average, branded properties cost 31% more than their counterparts of the same level. According to surveys conducted among foreign consumers, many wealthy people are willing to pay a premium for the brand. After all, residences supported by a well-known brand not only provide the owners with the highest level of comfort, but also give them status.
There are several important reasons why high-income consumers invest in branded properties:
it is prestigious to own a branded property;
the buyer gets an apartment of high comfort with interior decorated by famous designers;
the brand solves absolutely all household issues: from cleaning, food delivery, repair of appliances to walking pets. The owner of the property does not have to make any effort at all to organize everyday life. Moreover, the brand guarantees impeccable service in accordance with all the standards of the hotel brand;
he brand ensures the safety of the property owners;
branded properties are located in areas with well-developed infrastructure;
if the residence belongs to a hotel brand, the owner of the property gets the opportunity to enjoy all the benefits intended for hotel guests on favorable terms: to visit well-maintained private beaches, restaurants, cultural and entertainment events, various clubs, to use sports equipment;
the owner can leave the residence at any time without fear for its safety;
investments in branded property are profitable, the brand guarantees their safety;
rental programmes are available to ensure that the investment in the property pays off;
the owner has the right to sell, gift or bequeath the property at his own discretion.
Those who do not live in the residence all year round can conclude a rental programme with the brand, having agreed in advance the period and terms when they will use the property themselves. Rental programmes are a source of income. In order to encourage owners who enter into rental programmes some brands make significant discounts on maintenance.
There are different types of branded residences available to buyers:
non-hotels and supported by a brand that is not related to the hotel business;
bearing the names of hotel brands, but located separately from the hotels (although in the same city or neighborhood);
located near the brand hotels;
occupying part or all of a hotel building (so-called house-hotels).
Global branded property trends
According to Knight Frank's Global Branded Residences report, the branded property market is showing steady growth despite the recent significant economic turmoil. Liam Bailey, global head of research at Knight Frank, argues that while the sector will face increasing challenges as it develops, significant opportunities for operators will remain.
Knight Frank estimates the branded residences sector will grow by an average of 12% each year until 2026.
Participants in the Knight Frank study pointed to the growth potential of branded property in various regions around the world such as Asia (Hong Kong and Singapore), Europe (UK, Portugal, Turkey, France, Italy and Greece), the Middle East (Dubai and Saudi Arabia) and America (the USA, Caribbean and Mexico).
According to the study, the property sector in these regions has potential for growth. At the same time, with increasing competition, especially in these promising markets, market players will be forced to focus on the schemes they offer and provide outstanding quality of facilities, services and design.
Thus, operators who are able to offer the best products and focus on quality will be in a better position to compete successfully in the growing property markets in these regions.
Features of branded property in Greece
With Greece maintaining its historically strong influence in the tourism market and growing interest from luxury holidaymakers, branded residences are expected to expand significantly in the near future.
Although the country has a rich tradition in the hotel business, the branded property market has started to develop relatively recently.
Therefore, unlike other countries where all the best sites have already been developed, there is still plenty of space next to ultra-luxury hotels in Greece. Branded residences have already been built at the Costa Navarino hotel, in the south-west of the Peloponnese (Mandarin Oriental brand), at the Amanzoe resort in Porto Heli. There are still many places in the country where branded residences projects can be realized.
In particular, Athens is an attractive city with extensive tourism and business prospects, but with a limited choice of quality accommodation. In this regard, it seems that the establishment of branded residences in Athens is an optimal step to tap the market.
According to a study conducted by HVS, leading European cities expect 13,400 premium apartments with full service packages to be available by 2025.
The number of active transactions will also increase significantly during this period.
In this regard, the present time offers an excellent opportunity for investors to enter the branded residence market in Athens. Buying a branded residence is a profitable investment that can bring a significant and guaranteed income for at least 10 years in the future.
DKG Development is negotiating with several major market players and will soon offer its clients joint projects in this field.
DKG Development strives to create outstanding projects that not only meet high standards of quality and engineering, but also have a unique style and character. When using branding, a company can attract exclusive partners, increase the value of properties and improve market position.
Branded properties offer potential customers the opportunity to purchase not just a home, but part of a prestigious and recognizable brand. This creates a unique experience for buyers and additional advantages when choosing properties.
One of the key factors of the company's success is also the ability to adapt to changing trends and provide innovative property solutions. DKG Development, being one of the market leaders, successfully promotes its projects, attracting the attention and trust of clients and partners, and strives to remain at the forefront of the real estate field, so the new direction, branded real estate, has not been left without attention.