THE RISE AND RISE OF BRANDED RESIDENCES Exploring the evolution, the challenges and the future of branded residences in the luxury property sector

THE LUXURY PROPERTY FORUM10KEY FINDINGS

THE LUXURY PROPERTY FORUM1. Rapid Growth and Global Expansion The branded residences sector has experienced unprecedented growth, increasing by 176% over the past decade and is projected to nearly double within the next seven years, with rapid expansion in regions like MENA, CALA, Asia- Pacific, and Europe. 2. Buyer Appeal: Quality and Convenience Buyers are drawn to branded residences for the assurance of quality, design, and management, alongside the prestige and convenience of comprehensive hotel-like services and amenities. 3. Developer Benefits: Faster Sales and Higher Prices Developers benefit from faster sales and higher prices, with branded residences often selling 30-50% off-plan and achieving approximately 30% higher prices compared to non-branded developments. 4. Market Appeal Boost from Luxury Brands Well-known luxury brands significantly boost the market appeal of emerging destinations, attracting affluent tourists and investors, and fostering a high-end tourism ecosystem. 5. Demand Drivers: New Affluent Consumers The demand for branded residences is driven by newly affluent consumers in Asia and the Middle East, with luxury hotel brands leading the trend, and a growing interest in non-hospitality brands offering unique lifestyle assets.

6. Importance of Cultural Understanding Success in the global market requires brands to understand cultural nuances and preferences, focusing on creating personal and emotional connections with buyers, and ensuring practical use of luxurious amenities. 7. Crucial Role of Marketing and Brand Consistency Effective marketing and brand consistency are crucial for attracting high-net-worth buyers to branded residences, with a focus on unique lifestyle and investment benefits. 8. Technology and Personalised Amenities Seamlessly integrating cutting-edge technology and personalised amenities enhances the value proposition of branded residences, ensuring they meet and exceed buyer expectations. 9. Challenges: Legal Complexities and Authenticity Navigating legal complexities, planning challenges, and maintaining authenticity are critical for the successful development and operation of branded residences, especially in diverse global markets. 10. Future Opportunities: Diversification and Innovation The future of branded residences lies in diversification and innovation, with opportunities to appeal to a broader market, including lifestyle, premium, and mid-scale segments, while continuing to deliver exceptional living experiences through unique architectural and service offerings.

THE LUXURY PROPERTY FORUM04 INTRODUCTION The evolution of branded residences has been marked by a fascinating interplay of trends, catering to the discerning tastes of affluent buyers while seizing opportunities in emerging markets. As we delve into the key drivers shaping this dynamic sector, it becomes evident that the landscape is undergoing a profound transformation, fuelled by the convergence of luxury, innovation and lifestyle aspirations. We’ve assembled a highly knowledgeable panel of experts to shed light on that transformation. Here, we explore the allure of luxury brands to newly affluent consumers in burgeoning markets like London, the UAE, Saudi Arabia, Miami, New York and China. This appetite for prestigious labels not only symbolises status but also underscores a global shift towards embracing branded lifestyles. Yet, the allure of branded residences extends beyond mere luxury. Today’s discerning buyers also seek seamless integration of work and leisure, wellness amenities and sustainable design elements. The evolving industry of branded residences is therefore reshaping the very essence of luxury living, as emphasised by the growing emphasis on sustainability and technological innovation. Navigating the complexities of collaboration between developers and brands requires a delicate balance of mutual respect and alignment of objectives. The importance of a symbiotic relationship is emphasised, where developers accommodate brand requirements while brands adapt to local market dynamics. The need to work in tandem extends to every facet of branded residences, from architecture to service excellence. What’s clear is that the international allure of branded residences presents many opportunities and challenges. As our panel of experts demonstrates, understanding regional nuances, building strong partnerships and navigating legal frameworks are crucial for success. However, it’s also the case that the possibilities are endless. What is important, is that the infrastructure and partnerships are in place to support these possibilities and support the continued growth of this exciting sector. Join The Luxury Property Forum and our 12 respected individuals as we take a deep dive into the trends, challenges and future of branded residences. The branded residences experts are: • Riyan Itani, Director & Founder, Global Branded Residences • Jenny Naylor, Strategic Marketing Consultant, The OWO • Adelina Wong Ettelson, Global Head of Residences Marketing, Mandarin Oriental Hotel Group • Charles Leigh, Sales Director, Finchatton, The Whiteley • Daniel Von Barloewen, Regional Vice President, Accor • Richard Bursby, Partner, Taylor Wessing • Brett Gregory-Peake, Managing Partner, Liaison • Laura Westmacott, Founder & Managing Director, Mercury Communications • Sarah Peck, Senior Director at UK Sotheby’s International Realty • Dean Main, Founder, Rhodium • Charu Gandhi, Founder and Director, Elicyon • Corin Hawthorne, Business Development Director, OKTO Technologies

THE LUXURY PROPERTY FORUM05 In this report we asked our experts eight key questions: 1. Can you define what it is that makes branded residences special – and gives them an appeal for developers and buyers alike? 2. What key trends have shaped the evolution of branded residences over time and what current trends do you see driving their development today? 3. What factors contribute to successful collaborations and relationships between developers and brands? What makes the perfect partnership in the branded residences sector? 4. With the international nature of the branded residences sector, which factors need to be considered when working on a global scale and which specific regions are promising growth? 5. What does successful brand integration mean to you and what strategies can be put in place so branded residences appeal to buyers and investors? 6. What challenges do you foresee for the branded residences sector both now and in the future? 7. How can stakeholders navigate the challenges of the branded residences effectively and to their advantage? 8. What is next for the branded residences sector and what excites you about the future? A message from Priya Rawal, Founder & CEO of The Luxury Property Forum I am privileged to bring together a distinguished panel of experts for this important Thought Leadership Report on evolution, the challenges and the future of branded residences. The LPF serves as the official forum for the luxury property sector, uniting highly experienced and dedicated members handpicked from every discipline. Our mission is to facilitate the advancement and continuous growth of the luxury property industry through fostering strong business collaborations, creating growth opportunities, and sharing invaluable knowledge, experience, and contacts. The branded residences sector has experienced an extraordinary decade of growth, with the number of branded residences increasing by 176% according to data from Global Branded Residences. This remarkable expansion is set to continue, driven by new brands, emerging locations, and a shift in amenities. These iconic luxury developments offer more than just stunning interiors and prime locations; they cater to a clientele that demands the five-star services of the most prestigious hotels, from impeccable housekeeping to Michelin-star dining. Furthermore, they boast the most revered wellness and entertainment facilities, all conveniently accessible without leaving home. Our LPF community’s collective expertise ensures that we remain at the forefront of these exciting advancements, fostering an environment where the luxury property sector can thrive and evolve. The OWO (Elicyon)

THE LUXURY PROPERTY FORUM06 Mandarin Oriental Residences, Barcelona Before we hear from our panel of experts, Riyan Itani, Director & Founder of Global Branded Residences offers the following insights into the branded residence sector. Global Branded Residences is a dedicated consultancy firm specialising in a range of branded residential development advisory services, operator selection and negotiation, as well as transactional services. The branded residences sector is seeing a period of unprecedented growth globally. In the past 10 years, the sector has grown by 176% with 687 project open and operating globally today. Perhaps even more astonishingly, that number is set to almost double in just the next seven years with a further 617 projects having been signed and announced to be delivered around the world. So, what are the fundamentals of this model and what has been driving the growth that is being experienced? In basic terms, branded residences are created through a contractual relationship between hotel operator or non-hotel brand and residential developer. The brand or operator licenses their name to be associated to the development for the benefit of sales and marketing. Interior design and technical services are also provided by the brand, as well as the management of lifestyle-oriented services and amenities such as concierge, valet parking, pools, gym and other wellness facilities, to name just a few. The residential units are sold to private individuals on a unit-by-unit basis and that contractual relationship is passed on to the Home Owners’ Association. In the case of hotel brands, the operator will also often manage the residential real estate and, in some cases, manage a rental programme on behalf of the individual unit owners. The types of branded residences projects also vary considerably. ‘Integrated’ projects have the residences located within the same building as the hotel. ‘Co-located’ projects see the residences on same site or directly adjacent to a hotel element. The Global Surge in Branded Residences: Trends, Drivers, and Future Outlook

THE LUXURY PROPERTY FORUM07 The OWO ‘Standalone’ projects, which are rising in popularity, see the residences on a totally separate site to the hotel (with a hotel of the brand usually present elsewhere in the city or destination) or no hotel component at all. Finally, ‘Non-hotelier’ branded residences projects are ones that carry a non-hotel brand such as fashion, interior design, automotive and other luxury goods brands. Why has this development model become so popular? The tangible benefits are three-fold; for the developer, the brand and the end buyer. For the developer, the most impactful benefits are increased residential sales values (around 30% more than non-branded) and accelerated sales velocities, driven by buyer confidence that is instilled by the association of the brand and the assurance of exceptional level of service, amenities and management that comes with the brand’s involvement. Other developer benefits include improved marketing power, increased access to a diverse consumer base and differentiation from the competition. These benefits have driven a huge take-up of the model from the development community across the world. For the brands and hotel operators, the branded residences model generates significant income from licensing fees and management fees. For hotel brands running a rental program, the residences offer an additional and differentiated rental product to supplement the hotels room inventory. At a more fundamental level, branded residences offer these brands a deeper customer relationship and brand outreach that further enhances their most valuable asset – their brand. Finally, for the end-buyer the benefits can range depending on their motivation for purchase. For ‘lifestyle’ buyers the residences represent a prestige, trophy property benefiting from brand association. For ‘investment-driven’ purchasers the residences provide a professionally managed product that is suitable to lock-up and leave. The rental income potential is also higher compared to non-branded products, with the added benefit of hotel service and management bolstering rental rates. Whether for lifestyle or investment, the proposition of branded residences gives a greater assurance to buyer of the likelihood of deliver as well as quality of finishes, services and amenities. One Hyde Park: The Residences at Mandarin Oriental, London (Elicyon)

THE LUXURY PROPERTY FORUM08 The Whiteley Branded residences have grown to be a truly global phenomenon. Despite originated in North America (in 1927 in New York), the concept has now spread across all geographies. In terms of the distribution of projects, according to research by Global Branded Residences, North America currently leads the way representing 35% of all projects. This is followed by Asia Pacific at 23% and Europe at 16%, CALA and MENA stand at 13% and 12% respectively, with Africa only representing 1% of the global share of projects. The pipeline of projects, however, show a shift-change in these rankings. MENA and CALA will see the largest proportion of new projects at 24% and 21% of the pipeline, respectively. This is led by Dubai and Saudi Arabia in the MENA region and Mexico in the CALA region. Asia Pacific will see 20% of the pipeline being developed, particularly in hotspots such as Thailand and Vietnam. North America currently stands at only 18% of the development pipeline and Europe stays at 16%. The results of this shift-change is forecast to level the playing field with the main regions, excluding Africa, representing between 16% (Europe) and 27% (North America) of the total market of open and pipeline developments globally. With the sector due to almost double in size over the forecast period, new and exciting brands entering the market and projects being delivered in new territories, the future of the sector is extremely promising and will be typified by geographical expansion, consolidation of the model in the development community and innovation in brands, as well as the services and amenities that are being provided.

THE LUXURY PROPERTY FORUM09 Can you define what it is that makes branded residences special – and gives them an appeal for developers and buyers alike? 20 Grosvenor Square (Finchatton) It’s clear that brands offer substantial reassurance in terms of quality, design, maintenance and management. They provide a protective shield, instilling confidence in buyers that the standards of an off-plan property will meet high expectations. And it is confidence that is key for buyers, particularly in real estate transactions like off-plan purchases. They rely on the brand’s reputation to ensure the delivery, quality and management of the development, along with its potential for rental and resale. Buyers can also expect consistency in location, amenities, security, design and service level, alongside the prestige of owning a branded property. Further to this, the convenience of a branded residence is a huge draw, particularly to affluent individuals who may be managing multiple homes worldwide. They favour a lifestyle that minimises worries about maintenance and security during their absences. The availability of comprehensive hotel-like services, such as 24/7 concierge and security, alongside amenities like transport, secure parking and housekeeping, enhances this convenience. Our experts talk more on this theme below. “For the developer, it’s really a way to differentiate their development from the wider market, to add a point of difference and added value through the management, design and branding of the development,” says Riyan Itani, Director & Founder, Global Branded Residences. “A branded development tends to sell more quickly and many now sell 30-50% off plan. And there is an increase in, price that is achievable – you can sell a branded development for approximately 30 percent more than a non-branded development, based on the global average. “For the buyer, there is the potential to have a prestige property, to have the best thing in town and to own a trophy asset while you’re surrounded by neighbours of a similar ilk to yourself,” Riyan Itani continues. “There is the knowledge that the product that’s going to be provided to you will be well finished, will have a high level of design differentiation, and, in many cases, specific features related to the brand, whether that be furnishing, services, management or amenities. Also, the concept of being able

THE LUXURY PROPERTY FORUMgoals and help them to reach it. Meeting rooms that people can bring clients to without having to invite them into their home are another very popular amenity. And while cinema rooms are popular, they might not be used all the time, so dual-use spaces that could be hired out as a cinema or used as a play space are a growing trend.” Amenities are a huge part of the lifestyle appeal branded residences offer – and the location is, in turn, closely associated with this, adds Charles Leigh, Sales Director, Finchatton, The Whiteley. “The location is incredibly important. At The Whiteley, we’ve got Kensington Palace is a few hundred yards away, immediately to our west is Notting Hill, one step further than that is Holland Park. It’s a branded residence in a location where people actually live, where they educate their children, run their businesses. Where the stars have really aligned is that there’s a £3 billion regeneration project on Queensway and that’s appealed to a lot of the people who’ve bought here.” Finally, Jenny Naylor, Strategic Marketing Consultant, The OWO, sums up the USP of a branded residence in the fact that it offers something unique. “This is where branded residences can be really attractive,” she says. “With The OWO, we have one of the most historic buildings in London and it’s all there in the fabric, in the architecture, in the echoes of the corridors. This poses challenges, of course – it’s a Grade II* listed building. But this also means there are ceilings of 4 to 8 metres, which you simply don’t get in most newbuild residences. And every single residence of the 85 is unique, and that’s really attractive for buyers because you’re not buying the same footprint as the person next door.” 10 The Whiteley The OWO to lock-up-and-leave to rent your property when you’re not in residence is really important. It’s rare that you find branded residences being used as primary homes. They tend to be secondary or tertiary homes. And so that ability to have the property managed and looked after and maintained when you’re not in residence in that particular location is really important. And what comes with that is a really significant rental return – between 4% and 6% – which of course offsets their ownership costs on an annual basis.” Sarah Peck, Senior Director at UK Sotheby’s International Realty, points to the huge demand for branded residences, particularly from overseas buyers. “This is because the brand carries a huge amount of weight and we often find that branded residences sell earlier on in the sales process than a normal residential scheme,” she says. “Names such as Mandarin, Four Seasons, Raffles are known and respected globally and therefore a lot of high- end buyers feel comfortable investing in development with such a brand behind it. They might have bought into other developments with that brand in other parts of the world and they know exactly what sort of services they’re getting.” Further to this, amenities are a huge part of what draws buyers to a branded residence. But where once a developer might have made space for a gym, kitted it out and effectively just ticked that box, now they’re taking it to another level,” explains Dean Main, Founder, Rhodium. “Now, a resident will be shown round that gym by a personal trainer, who will take time to understand their

THE LUXURY PROPERTY FORUMWhat key trends have shaped the evolution of branded residences over time and what current trends do you see driving their development today? 11 Mercedes-Benz, Binghatti One key trend that has emerged is that well-known brands significantly boost the appeal of a destination, especially in emerging areas. By establishing a presence, these brands can elevate the area’s market perception, laying a foundation for a high-end tourism ecosystem and attracting additional prestigious brands and affluent tourists. The presence of such visitors often correlates with increased property purchases in the area, as repeated visits tend to enhance buying interest among wealthy individuals. There’s clearly no doubt that we’re in the midst of an explosion of interest in branded residences. Factors that have influenced that evolution vary from the demands of the UHNWIs who are investing to the developers who see it as a potentially very successful way to diversify, as our experts expand on here. Brett Gregory-Peake, Managing Partner, Liaison begins by turning the spotlight on the significant impact of new and thriving markets, rather than the more established ones. “One of the key drivers, is the desire for brands amongst newly affluent consumers from Asia and the Middle East, who are attracted by the status that these luxury brands offer,” he explains. “The pace of growth in new territories like Dubai, KSA and China is difficult to compete with and shows little sign of slowing down. And even in the more traditional markets for branded residential like Miami, London and New York, most buyers are from Asia and the Middle East.” Brett further points out that the main trend sits currently around luxury hotel brands, then fashion and automotive sectors – but he also maintains this will evolve. Laura Westmacott, Founder & Managing Director, Mercury Communications, certainly agrees. She comments, “A key trend is non- hospitality brands getting involved in the space, bringing their brand DNA and design. Dubai is now the world’s leading city for the development of branded residences, with the number of standalone projects (without a hotel

THE LUXURY PROPERTY FORUM12 Bugatti Residences, Binghatti Mandarin Oriental Residences, Barcelona component) set to rise to 54 per cent of the market. For example, Dubai developer Binghatti has a portfolio including Mercedes-Benz Places, as well as Bugatti, and jewellery brand Jacob & Co. Unsurprisingly, many HNWIs are also increasingly seeking these as ‘trophy assets,’ enabling them to buy into the lifestyle and associations of the brand.” So how are developers responding to the demands of their discerning end users? “Over the last few years, buyers’ preferences and needs have drastically shifted and today’s UHNWIs are looking for branded residences that blend their work and personal lives,” says Adelina Wong Ettelson, Global Head of Residences Marketing, Mandarin Oriental Hotel Group. “Buyers are looking for innovative offerings such as magnesium spas, private dining services, golf simulation rooms, pet spas and more. We’ve also seen a remarkable upsurge of biophilic design across the luxury branded residences sector, as sustainability and enhancing overall individual well-being remain a priority for today’s buyers. As the branded residences sector remains competitive, brands and developers must continue to evolve and provide a multitude of choices that redefine the idea of home.” Corin Hawthorne, Director at OKTO Technologies, cites pioneering projects such as The Peninsula and One Hyde Park as key in shifting the luxury narrative from merely prime locations and construction quality to offering a comprehensive lifestyle experience, characteristic of prestigious brands. “Lately, the sector has seen the emergence of new trends that cater to various buyer preferences, emphasising sustainability, technological innovation or bespoke services. The emphasis on sustainable practices and energy efficiency reflects a shift towards environmental awareness in society. Moreover, the incorporation of cutting-edge technology for enhanced security, comfort and wellness is now fundamental, aiming to provide an effortless and opulent living environment.” Agreeing with the other experts, Richard Bursby, Partner at Taylor Wessing LLP, points to the fast growth of both mixed-use and standalone branded residences as key trends. “Many hotel developers have realised they are leaving cash on the table by not having a branded residential component and they can mitigate risks by diversifying the income stream. Meanwhile standalone branded residences, might not be co-located with a hotel but may still have a hotel brand, such as Four Seasons. Alternatively, they may partner with one of the many luxury brands seeking to move into the sector, be that a luxury car, fashion or jewellery brand.” Richard Bursby also adds, “There are an increasing number of branded residences outside of the luxury segment. What was once the preserve of the very wealthy is becoming available to a wider audience as the price points become affordable – this is particularly the case in the Middle East.” Daniel Von Barloewen, Regional Vice President, Accor adds: “There are so many more players in the branded residence market and, as a result, it’s far more competitive. This is both wonderful and comes with challenges, as companies don’t necessarily understand how to differentiate the hospitality offering between an interior design brand or a luxury car, for example. The other key trend is an increase in ratio between luxury and non-luxury residences. The increase in the number of mid-range brand residences shows that this is product that you can adapt. Not everyone can afford the top-end residences, but everyone wants to buy into the type of lifestyle it offers.”

THE LUXURY PROPERTY FORUM13 What factors contribute to successful collaborations and relationships between developers and brands? What makes the perfect partnership in the branded residences sector? Mandarin Oriental Residences, Fifth Avenue Selecting the right brand partner is crucial for the financial and marketing success of a development. It’s important to choose a brand that resonates with the intended demographic, justifies price premiums and ensures strong sales absorption rates. Developers must ensure the chosen brand aligns with the lifestyle and aspirations of their target audience, as this significantly influences purchasing decisions. As more brands enter the market, some lesser-known ones may require targeted marketing to highlight their unique benefits and differentiate them from competitors. However, associating with niche or distinctive brands could limit market appeal, especially if these brands are known more for their aspirational value in consumer sectors than for proven service excellence. Clearly there are huge opportunities (as well as challenges) for both brands and developers in this burgeoning market and all our experts agree that openness and mutual support are key for a partnership to be successful. Riyan Itani, Director & Founder, Global Branded Residences, begins by explaining, “Fundamentally, this is a partnership between developer and brand, not an exploitative relationship. Developers must be flexible and

THE LUXURY PROPERTY FORUM14 The Whiteley Park Hyatt (Elicyon) accommodating of the brand’s requirements whether in design or management. But equally, the brand must be aware of the market reality wherever the project is located and adapt its offering to meet market demand. When it comes to contract negotiation and establishment of commercial terms, it also needs to be a formula that works for everyone – getting the lowest fees out of the brand is a bad start! The best branded residences see an alignment of the market, the developer’s aspiration and the support and backing of the brand.” Speaking with his expertise in the luxury residence management sector, Dean Main, Founder of Rhodium, agrees with Riyan. “Successful collaborations in branded residences hinge on a deep understanding of the business model, alignment of goals and clear delineation of roles between developers and brands. Brands with property management expertise like hotel-operated ones bring invaluable experience to the table, while partnerships with seasoned management firms offer support for brands lacking in-house capabilities. Prioritising personalised service, attention to detail and continuous improvement ensures resident satisfaction and competitiveness in the market.” It is also about each partner having a full understanding of the synergy between brand and area, as Charles Leigh, Sales Director at Finchatton, The Whiteley succinctly puts it, “A perfect partnership comes from choosing the right brand in the first place. For example, choosing Four Seasons for 20 Grosvenor Square and Six Senses for The Whiteley were the right decisions for those particular locations.” “Brands carry their own individual followers, characteristics and personalities. So the important part of choosing a brand is that it needs to match with the location and the developer, as well as connect with the entire profile of a project,” adds Brett Gregory-Peake, Managing Partner, Liaison. “When you’re devising a strategy to promote a branded residence, those characteristics are really the bedrock of how you take it to market. It takes time to build a personality around a campaign but this stage shouldn’t be rushed because you rarely get a second chance. What a brand does give you, though, is a shortcut to establishing a development. By aligning with a successful brand, a developer is buying into the credibility of the brand, which is a huge advantage.” Daniel Von Barloewen, Regional Vice President, Accor agrees, “When it comes to creating a successful branded residence, we always start by looking at the fundamentals: location, location, location. What are the specifics in terms of the site? Is this a five-star destination? Is this more of a traditional destination? Is it mid-scale, premium, luxury, ultra-luxury? What’s the competitive set? Then we always ask our homeowners for a third-class market study, which validates all of those assumptions and confirms is a location suitable for branded residencies.”

THE LUXURY PROPERTY FORUM15 The OWO From her perspective as an architect and interior designer, Charu Gandhi, Founder and Director of Elicyon, says “Successful partnerships between developers and brands tend to be based on multiple shared values. These can include: a common attitude to exceptional client service; a shared vision for reaching sustainable living and building solutions; a broadly shared end-user demographic; similarly keyed brand images; common aesthetic visions; or amenities that capture both brand narrative and end-user appeal. The more common ground that exists between a brand and a developer, the more confidently the development can speak to the aspirations of potential buyers and the better it can serve its residents.” Jenny Naylor, Strategic Marketing Consultant, The OWO, agrees with Charu. “The perfect partnership is a synergy of heritage, uniqueness and service excellence. Residences at The OWO exemplify this with the building’s rich historical backdrop and iconic architecture, offering a truly authentic experience. Teaming up with a trusted brand like Raffles, renowned for its impeccable service legacy, adds another layer of prestige and value. And from a developer’s perspective, this enhances market identity, aids in quicker sales and commands premium pricing.” As Laura Westmacott, Founder & Managing Director, Mercury Communications, concludes, “A successful partner brand gets involved with the developer in all aspects of the residences from the architecture, interior design, marketing, public relations and communications. It can’t just be ‘slapping a logo’ on the side of a building for a 30 per cent premium. Non-hospitality brands should also consider bringing in a concierge or lifestyle management service to ensure a quality service post key handovers.”

THE LUXURY PROPERTY FORUM16 Burj Binghatti Jacob & Co Residences As we found at the start of this thought leadership piece, branded residences are truly global. But the shift from this as an American phenomenon to its explosion in the Middle East, for example, means developers need to be even more aware of cultural differences and what buyers will actually want. For example, buyers at the top of the market expect exceptional quality, but merely having luxurious features is no longer sufficient. Today’s luxury hospitality and real estate sectors focus more on creating a personal and emotional connection with customers rather than just offering opulent materials or high-end amenities. It’s also important to consider the practical use of these amenities. Installing features that are unlikely to be used can deter potential owners, especially if these contribute to higher service charges. The branded residences sector is international by nature. What factors need to be considered when working on a global scale and which specific regions are promising growth?

THE LUXURY PROPERTY FORUM17 Mandarin Oriental Residences, Barcelona “Many factors come into play when working on a global scale,” explains Adelina Wong Ettelson, Global Head of Residences Marketing, Mandarin Oriental Hotel Group. “These include understanding the market demand and trends, learning the cultural nuances and preferences of various regions, building strong relationships with local developers and partners, and of course, taking economic factors into account. Above all, it’s also important to assess brand recognition and reputation, and determine if there’s already an established clientele.” Charu Gandhi, Founder and Director of Elicyon adds, “With branded residences accelerating their presence across new global locations, key factors for consideration include cultural and brand relevance. Does the brand speak to the lifestyle aspirations of a local or regional audience? How can recognisable facets of a brand be magnified to respond to regional requirements or sensitivities? We are seeing a proliferation of fashion houses and ultra-high-end jewellery brands successfully operate within the growing Middle Eastern market, for example, where a focus on super-luxury design, materials and craftsmanship carries extra weight and can drive lifestyle decisions.” When it comes to the question of which regions are most promising in terms of rapid growth, Adelina Wong Ettelson further says that Asia-Pacific, the Middle East and Europe are currently the most promising markets. “Each of these regions are hubs for luxury real estate development, driven by high- net worth individuals, expatriates and tourism. As an established key player, Mandarin Oriental has 15 residences in the pipeline, many of which are in these markets, including Da Nang, Muscat, Tel Aviv, Madrid, Vienna and more,” she comments. Riyan Itani, Director & Founder, Global Branded Residences, is in agreement with Adelina. “CALA (Caribbean and Latin America), MENA (Middle East and Northern Africa) and Europe are all expansion markets while Asia Pacific also has much growth to capture despite being the second largest market. By contrast, North America is seeing a cooling of new projects and Africa is still very behind the pack, only accounting for 2% of the global sector by project numbers. “When looking at the sector at a global scale, the ability for a brand to leverage benefits and loyalty programs across multiple geographic regions is a huge competitive advantage,” Riyan Itani concludes. “Also for developers, the realisation that their buyers are not just considering properties at a local level but a regional and international level, means the benchmarking of value must also reference a wider geographic region.” Mandarin Oriental Residences, Barcelona Mercedes-Benz Places, Binghatti

THE LUXURY PROPERTY FORUM18 What does successful brand integration mean to you and what strategies can be put in place so branded residences appeal to buyers and investors? One Hyde Park: The Residences at Mandarin Oriental, London (Elicyon) In regions where branded residences are increasingly popular the role of marketing in positioning and promoting these developments is increasingly critical. This is particularly true as high-net-worth individuals have high expectations and are flooded with investment opportunities. Developers need to differentiate their projects to attract the right buyers and achieve rapid sales at desired prices. Partnering with a well-established luxury brand can enhance a development’s appeal by leveraging the brand’s reputation to offer unique lifestyle and investment benefits. All our experts pointed to the importance of brand consistency in every aspect of a branded residence – from architecture and design through to the amenities and services offered. Adelina Wong Ettelson, Global Head of Residences Marketing, Mandarin Oriental Hotel Group, understands this very well, as she explains here. “Having grown from its Asian roots over 60 years ago into a global luxury hospitality brand, Mandarin Oriental now operates in 25 countries and territories with many more projects under development. In order to achieve successful brand integration across our entire portfolio, we have strategies in place that rigorously focus on brand consistency through architecture, design, amenities and services, as well as partnerships with local developments to leverage community relations and create added value for buyers and investors. Once a property opens, we want to create a sense of community. Essentially, our Residence owners want to feel part of a “club” and engage with like-minded individuals who also value the bespoke and thoughtful lifestyle at The Residences at Mandarin Oriental. For example, our Director of Residences at each property curates social programming and events for owners. Among the many other benefits of ownership is an exclusive invitation to the elite tier of the Group’s global recognition program, Fans of M.O.”

THE LUXURY PROPERTY FORUM19 Mercedes-Benz Places, Binghatti Successful brand integration also continues in the ongoing life of the residence, as fostering a strong sense of community will boost its perceived value and encourage long-term investment. Sarah Peck, Senior Director at UK Sotheby’s International Realty, expands on these themes. “The key to success in branded residences lies in offering turnkey solutions with fully furnished apartments, collaborating with design teams to cater to diverse preferences and highlighting standout features such as spacious main bedrooms and captivating views. I would always advise having a show apartment, because it helps buyers to imagine living there – and, in our experience, sells straightaway.” Seamlessly blending the brand with cutting-edge technology and personalised amenities is essential in our fast-paced digital age, argues Corin Hawthorne, Director at OKTO Technologies. “By aligning technology considerations with the brand’s visual appeal and heritage, such as intuitive GUIs and multilingual support, residents feel at home, even in a new city. Leveraging the brand’s heritage, we integrate hotel services with bespoke offerings tailored to the nuances of permanent living. This holistic approach ensures that branded residences not only appeal to buyers and investors but also exceed their expectations, enhancing the overall value proposition.” From a public relations point of view, Laura Westmacott, Founder & Managing Director, Mercury Communications points out that it is important the USP of the residence is clear. “Whether that be superlative amenities, or stand-out innovative design and features. For example, Bugatti has made car galleries the focal point of the homes in its residences, in what has been coined ‘carchitecture’. In addition, a well-managed rental pool is essential to investors, as well as conveying all the relevant key facts, for example a competitive tax system, currency safety and potential citizenship by investment programmes.” “It’s the developer’s job to make sure that the brand partnership choice is fit for what the market wants,” maintains Brett Gregory-Peake Managing Partner at Liaison. “You can’t catch everyone and a branded project will most likely leave a proportion of would-be buyers priced out. Therefore, the first question to ask is ‘do I need a brand?’. If you want to stand out and invigorate a relatively stagnant but opportunistic market, this is also where brands can perform well. The key is to do your due diligence.” Though further to this, it is paramount that the brand is relevant, says Charles Leigh, Sales Director at Finchatton, The Whiteley. “Four Seasons are obsessive about service and renowned the world over for it. Similarly Six Senses are passionate and obsessive about health and wellness – as well as service – so we let them play to their strengths and expertise. With all our partners, we collaborate to get the best out of every aspect of a branded residence, from architecture, interiors, services and amenities.”

THE LUXURY PROPERTY FORUMWhat challenges do you foresee for the branded residences sector both now and in the future? 20 Mandarin Oriental Residences, Fifth Avenue For the premium costs associated with these brands, it’s crucial to clearly communicate the additional value they provide. The approach of ‘build it and they will come’ is outdated, especially in established markets. Developers must now actively educate, inform and convince potential buyers of the merits of their projects over competitors, emphasising the lifestyle and investment advantages they offer. Ultimately, the ability to differentiate a project significantly affects its commercial success. Saturation of the branded residence market and the need to stand out seems to represent both the challenge and the opportunity for our panel of experts. Charles Leigh, Sales Director at Finchatton, The Whiteley, sums it up from the perspective of the Capital’s market. “In London, planning and scarcity are the main challenge because there are so few sites that would work for branded residences. But while the scarcity creates a challenge, it means there aren’t many people in this space who do it well and have the experience to do it well time and time again.” Richard Bursby, Partner at Taylor Wessing LLP agrees, “One of the main challenges of a branded residence is the number of parties involved. There’s not only the branded operator and the developer, you also have all the multiple individual units owners who are buying the residences in the projects. This leads to greater complexity, but probably the single most important issue to understand is the ownership and control of the common areas. Is that the individual unit owners? Is that the owner developer? Is that a landlord? Is that a homeowners association? This needs to be worked through. “In addition, from a planning perspective, a branded residence is complex. You typically have both hotel use and residential use alongside. And those two different uses, depending upon which part of the world you’re in and the planning permission you’ve got, can lead to a number of complicated issues as well.” On the topic of working in different markets, Daniel Von Barloewen, Regional Vice President, Accor, had this comment to make. “Increased The OWO

THE LUXURY PROPERTY FORUM21 The OWO competition underscores the need for differentiation and education among buyers. Operators must articulate the distinct value proposition of branded residences compared to other luxury products. One of the key challenges we face is navigating the complexities of legal frameworks in different jurisdictions. Each market has its own set of real estate laws and regulations, requiring meticulous due diligence and alignment of interests among stakeholders. At Accor, we continuously evaluate and evolve our brand standards to meet changing market dynamics and consumer preferences.” Jenny Naylor, Strategic Marketing Consultant, The OWO comments that preserving authenticity in the midst of renovation and development poses another challenge. “Restoring historic landmarks like The OWO demands meticulous attention to detail while navigating regulatory frameworks and preserving cultural heritage. In addition, developers must carefully select brands that resonate with the property’s very specific ethos and target demographic.” To this, Dean Main, Founder of Rhodium, adds, “Experienced hotel operators which are now branching into branded residences have been in this world for a long time and they understand the business model. Where there is a potential problem is the non-hotel operated brands joining the market but don’t understand it. Slapping a brand above a residence can be deemed as a bit of a marketing exercise. However, this doesn’t come with the necessary fundamental understanding back-of-house services, legislation, and health and safety. It’s a little bit boring and not as sexy as front of house, but in order for a building to operate and work seamlessly, it’s essential.” 20 Grosvenor Square (Finchatton)

THE LUXURY PROPERTY FORUM22 Mandarin Oriental Residences, Barcelona All too often, the focus for branded developments is focused on price premiums, but it also important to look beyond that and consider the broader complexities. Understanding market dynamics, strategic planning and design from the outset is crucial to minimise risks for both developers and brands. Our experts have some further thoughts on this important topic. Sarah Peck, Senior Director at UK Sotheby’s International Realty, talks about the need to stay on top of buyer motivations. “There are huge differences between the requirements of buyers from different countries and branded residences need to stay on top of those to ensure they appeal to as wide demographic as possible,” she says. “For example, American buyers like buildings with history, while those from the Middle East require more bedrooms and more space in general. We’re also seeing a lot of younger buyers, those from tech or the financial industries. For them, key facilities include meeting rooms they can book out for weeks at a time, if needed. And for all demographics, wellness is paramount, so spas, gyms and on-site restaurants continue to be important.” Meanwhile, Richard Bursby, Partner at Taylor Wessing maintains that the primary challenge lies in maintaining brand standards post sale. “The brand will have to manage a home owners association with multiple individual owners of branded residences, some of whom may not be willing to pay for the necessary upkeep. How are standards to be enforced if an individual owner does not wish to play by the rules? The key is to ensure the branded residence is properly legally structured from the beginning and ensuring buyers fully understand the property they are purchasing and its long-term perspective. It will also be How can stakeholders navigate the challenges of the branded residences effectively and to their advantage?

THE LUXURY PROPERTY FORUM23 Bugatti Residences, Binghatti Mandarin Oriental Residences, Fifth Avenue important that high-quality managing agents are brought onboard to manage the branded residence to keep those standards high.” Dean Main, Founder of Rhodium, backs up Richard’s point. “By leveraging the expertise of experienced management firms, brands can ensure smooth operations, enhance resident satisfaction and mitigate risks associated with inexperienced brands entering the market. Emphasising service quality is crucial for fostering a sense of home and building long- term relationships with residents, as is consistency in service delivery, achieved through dedicated site teams. “And the key to a successful branded residence is continuity,” Dean Main continues. “You can’t be good for two weeks or a month, you’ve got to be consistently good. We aim to recruit a site team up to two years before the launch. Then, from the general manager all the way to the night duty managers and the concierge team, they all go through extensive training. We’re looking for people who have the ability to understand and meet the needs of every resident – and there are completely different sets of demands and expectations in each residence.” Laura Westmacott, Founder & Managing Director, Mercury Communications, agrees with Dean and says, “Potential pitfalls are developers not adhering to the brand ethos and values; they ought to be custodians of the brand. Consumers are now discerning and expect an array of F&B offerings, retail and wellness offerings. Configuring the right mix, whilst not a science, it is definitely an art to ensure that it is compelling for the target international audiences with varying expectations and needs.”

THE LUXURY PROPERTY FORUM24 What is next for the branded residences sector and what excites you about the future? One Hyde Park: The Residences at Mandarin Oriental, London (Elicyon) When considering the future, the mood among our experts is very much one of positivity and anticipation for the branded residence sector – not least because of the way it has grown, even in a period of economic uncertainty. As Adelina Wong Ettelson, Global Head of Residences Marketing, Mandarin Oriental Hotel Group, says, “Over the past decade, the branded residences sector has rapidly expanded into new markets and regions across the globe. As we look to the future, we see great potential for innovation and creativity. From pioneering architectural design, to personalised concierge services and exclusive dining options, there’s ample opportunity for brands to differentiate themselves and create a truly exceptional living experience for residents and future homeowners. This is an exciting opportunity for branded residence professionals to re-define property offerings, and attract new players and collaborations, further enriching the diversity and offerings within respective markets.” Charu Gandhi, Founder and Director of Elicyon agrees with Adelina. “We are excited by the diversification of branded residence providers, heralding a pushing of boundaries in terms of architecture, design and in-house experiences for residents. Newer providers – particularly those not traditionally known for operating in the service sector – will have a chance to demonstrate how they can become multi-layered lifestyle brands. As interior designers, we are excited to continue working with discerning buyers and developers at branded residences across the globe, translating each exciting brand ethos into fabulous interior spaces.” Several of our experts pointed to the fact that the branded residence market is not just for the luxury sector any more. As Brett Gregory-Peake, Managing Partner, Liaison, says, “There is plenty of scope for the sector and it will be interesting to watch which brands emerge next. Currently, there is a lot of focus on design, service and luxury, targeting mainly the second home buyer and the UHNW sector. However, the mainstream market will be attracted by ways in which branded residences can improve the quality of their daily lives at a more modest premium.” Daniel Von Barloewen, Regional Vice President of Accor, agrees. “The demand for branded residences it driven by diverse buyers from different cultural backgrounds. As such, we’re seeing lifestyle, premium and mid-scale brands coming into the market, reflecting a broad spectrum

THE LUXURY PROPERTY FORUM25 The OWO Park Hyatt (Elicyon) of preferences. Additionally, new global markets are emerging, presenting exciting opportunities for operators to explore. Whether it’s a hotel-operated or non-hotel- operated residence, the focus remains on delivering unique experiences and loyalty rewards to buyers.” Though, as Jenny Naylor, Strategic Marketing Consultant, The OWO, argues, there will always be a demand for luxury. “I think that ultra-luxury will always have its place in this sector, but the future lies in diversifying into more premium lifestyle offerings. For example, residences with a focus on encompassing experiences, such as a focus on wellness which is where a brand like Six Senses is well positioned. Yet, as the branded residences trend accelerates, so do the challenges of protecting a brand’s equity, and of maintaining the exceptional standards and delivering on the lifestyle promises that ultra-high-net- worth (UHNW) buyers expect. The possibilities are seemingly endless, as Riyan Itani, Director & Founder, Global Branded Residences concludes. “There are so many countries and cities that do not have branded residences that the prospect of global expansion is very real and very exciting. As developers and investors, as well as buyers and brands understand that there is a demand for such products, we will inevitably see new branded residences projects in virgin markets around the world – the runway is long and seemingly getting longer!”

THE LUXURY PROPERTY FORUM26 CONCLUSION It seems clear that branded residences have evolved due to a range of factors, from UHNWI preferences to developers’ diversification strategies. The current landscape is characterised by a surge in interest, with global markets like Dubai, KSA, Miami and China driving unprecedented growth. These new global markets are creating exciting opportunities for developers and operators to tap into. Regardless of whether the residences are managed by hotel brands or non-hotel brands, the priority is on offering unique experiences and loyalty rewards to buyers. Looking ahead, the branded residences sector is poised for innovation and creativity. Pioneering architecture, personalised experiences and a focus on sustainability and technology are set to redefine luxury living. Challenges such as market saturation and maintaining brand standards post-sale loom, but proactive strategies can mitigate risks. As to the future, the branded residence sector could be moving towards a broader demographic, beyond the ultra-wealthy. The diversification of branded residence providers and the emergence of new markets offer boundless opportunities for redefining property offerings and enriching the global real estate landscape. As the sector continues to evolve, it promises to re- shape the future of luxury living. Notes to the Editors: This Thought Leadership Article was conducted by The Luxury Property Forum, the official forum for the luxury property and construction industry in partnership with Global Branded Residences, a dedicated consultancy firm specialising in a range of branded residential development advisory services, operator selection and negotiation, as well as transactional services. Here is a full list of interviewees who were interviewed for this Article (not in any order): 1. Riyan Itani, Director & Founder, Global Branded Residences 2. Jenny Naylor, Strategic Marketing Consultant, The OWO 3. Adelina Wong Ettelson, Global Head of Residences Marketing, Mandarin Oriental Hotel Group 4. Charles Leigh, Sales Director, Finchatton, The Whiteley 5. Daniel Von Barloewen, Regional Vice President, Accor 6. Richard Bursby, Partner, Taylor Wessing LLP 7. Brett Gregory-Peake, Managing Partner, Liaison 8. Laura Westmacott, Founder & Managing Director, Mercury Communications 9. Sarah Peck, Senior Director at UK Sotheby’s International Realty 10. Dean Main, Founder, Rhodium 11. Charu Gandhi, Founder and Director, Elicyon 12. Corin Hawthorne, Business Development Director, OKTO Technologies

THE LUXURY PROPERTY FORUM27 The Luxury Property Forum The Luxury Property Forum is the official forum for the luxury property industry, bringing together highly experienced and devoted members handpicked from every discipline. We facilitate the advancement and continuous growth of the luxury property industry, through developing strong business collaborations and cultivating growth opportunities as well as sharing knowledge, experience and contacts. We are more than just a network, but are a forum for the future. Global Branded Residences Global Branded Residences is a dedicated consultancy firm specialising in a range of branded residential development advisory services. Visit: https://gbresi.com If you would like to find out more about Global Branded Residences please contact Riyan Itani, Director and Founder, at ritani@gbresi.com or +44 (0)7395 134 693 Visit: www.theluxurypropertyforum.com If you would like to speak to any of the interviewees above or to find our more about The Luxury Property Forum please contact Priya Rawal, Founder and CEO, at priya@ theluxurypropertyforum.com or +44 (0)7719 970747 20 Grosvenor Square (Finchatton)

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