Alliances between luxury brands and the real estate sector are in vogue. These are branded residences, introducing a new concept of ultra-luxury homes in Europe. According to real estate consultancy Savills, there are more than 1,300 prime residential projects linked to major brands worldwide: over 690 completed projects and another 600 expected to be delivered by 2030.
Spain stands out as the European country with the most properties of this type underway, surpassing countries like Greece and other markets like France or Croatia. Our country currently has six completed projects and 12 in progress (271 finished units and 448 under construction).
Branded residences usually operate alongside international hotel brands, but these companies are not the only ones investing in this business. There is a clear diversification with the entry of fashion, design, technology, sports, and automotive brands, expanding the investment and purchasing landscape. The consultancy notes the exponential growth of these types of homes linked to premium brands or five-star hotels, with prices ranging from three to up to twenty million euros.
A new real estate investment alternative
Branded residences are luxury developments that offer a wide range of services, adding value to the experience and whose exclusivity generates greater investment appeal. This is why, over the past decade, this segment has experienced spectacular growth of over 160%, both in vacation and urban destinations, where it is gaining more and more popularity, with a turnover of more than 30 billion euros.
Although Madrid and Barcelona are the most attractive urban markets for these projects, the Costa del Sol is the epicenter of branded residences in Europe. Most projects are located in places like Marbella, Benahavís, and Alcaidesa (Cádiz) and are linked to premium brands such as Dolce & Gabbana, Elie Saab, Fendi, Angsana, Fairmont, Four Seasons, Karl Lagerfeld, or Lamborghini.
In the capital, the Four Seasons Canalejas development revolutionized the concept of luxury housing and already has a new project in sight for Madrid after the success of the last one. Its 22 exclusive private residences were sold in 2021 at an average of 18,000 euros per square meter, with a record total price of over 11 million euros for a penthouse. Another major luxury project in Madrid, the Mandarin Oriental Residences in Madrid, in the Salamanca district, has already sold almost all its units with prices exceeding 25,000 euros per square meter.
Growth Forecasts
Looking to the future, the branded residences market is expected to continue growing, driven by the ongoing demand for luxury properties and the quest for exclusive living experiences. The “Global Branded Residences 2023” report by Knight Frank forecasts a global growth in this segment of 55% by 2026, with an annual increase of 12% in new projects. The number of projects will evolve at a double-digit annual rate, with Ritz-Carlton and Four Seasons as the operators with the largest market share today. These results confirm that branded residences are a growing market globally. North America leads in projects, followed by Asia-Pacific and Europe, where there is still ample room for growth.
The rise of this type of product is driven, among other factors, by the increase in global wealth and the recovery of long-distance travel in recent years, according to the consultancy.
Branded residences are, therefore, a new real estate investment alternative that demonstrates that the Spanish luxury residential sector is experiencing a boom in Spain, attracting increasing interest from investors, developers, and clients.
For high-level investors and buyers, branded residences are not only a status symbol but also a secure and attractive investment.
