Hotel-branded residences – defined as for-sale apartments or villas bearing the brand of a major hotel chain and under its management and available for use at the option of the owner – have been rapidly multiplying across the globe as real estate developers and hotel operators see the value that the luxury residential components add to the development fundamentals.
Increasingly popular throughout the United States and Canada over the past two decades, these types of projects are now gaining momentum all around the world, with nearly 200 properties now operating. For the first time, the pipeline of hotel-branded residence projects under development is now greater in Asia-Pacific than any other world region.
Top Asian development hotspots include Thailand, Indonesia, China and the Philippines. While the sale of villas as part of tropical resorts have long been popular in Southeast Asia from brands such as Aman Resorts, these residences are increasingly located in luxurious new towers in prime urban locations, where new skyscrapers offer superlative luxury homes atop five-star hotels.
Exciting new examples include the upcoming Rosewood Residences in Jakarta, Indonesia, scheduled to open in 2017, and the Residences at the Ritz-Carlton Bangkok, which is part of the MahaNakhon Development with distinctive architecture by the Office for Metropolitan Architecture. New resort projects include the new Amari Residences Phuket, and the Dusit Thani Pool Villas at Laguna Phuket, both in Thailand.
As opposed to the past decade when new projects were dominated by the five-star luxury brands including Ritz-Carlton and Four Seasons, the brands affiliated with these new projects are increasingly diverse as most major hotel chains are now active in the branded residential sector. Established luxury brands such as Fairmont and Hyatt are among those leading the pipeline of new projects, with new offerings including The Residences at the Fairmont Chengdu in China, and the Grand Hyatt Residences Manila in the Philippines.
New hotel brands are also having a major impact on the industry, including Baccarat and 1 Hotels from Starwood Capital Group with at least five developments underway such as Baccarat Residences New York. Other non-hotel brands with projects underway include Palazzo Versace and the new Paramount Hotel & Residences, both in Dubai.
Outside of Asia, other development hotspots include the Swiss Alps, the desert oasis of Marrakech, Morocco, the skyscrapers of New York and Dubai, and the beaches of Miami and the Turkish coast. However, due to lingering effects from the economic crises affecting many of the world’s most mature economies, financing for new projects was difficult if not impossible to obtain for most of the past five years. That trend seems to have abated now in most locations, however, so long as the projects have synergistic residential pre-sale programs and sustainable hotel demand.
The future looks bright for the hotel-residential sector. So where is the next hotspot? While we expect continued demand from the Asia-Pacific region, India seems to be a location with a great deal of unlocked potential and a sustainable demand for the world’s finest luxury residences. Let’s see if they top the pipeline when the 300th hotel-branded residence comes into operation.