It’s no secret that people use brands as a means of identification, but the demand for branded residences is growing, according to a report by Knight Frank.
Hotels and residences associated with brands or well-known designers are around a third more valuable, the report says.
By creating branded residences, developers can offer individuality and exclusivity to its residences.
“We see our projects as creating new villages, the idea is that you are no longer born into a village, you move to it,” says John Hitchcox, chairman and co-founder of luxury developer Yoo.
“They are buying into a lifestyle that will enable them to meet like-minded people.”
“These developments are like new villages in a sense. That’s the fundamental essence of our projects,” says Hitchcox.
Since 1999, yoo has been working with international developers on a large number of residential, hotel and commercial projects throughout Asia, Australia, Europe, Africa,
North and South America and the Middle East, responsible for the branding and design of more than 10,000 homes in 37 cities.
Not only are buyers attracted by good design, sometimes the most important factor for many is the trust associated with buying into a known brand.
Knight Frank reports that identifying with a known brand gives confidence in the delivery of the development and its ongoing management.
Branded developments sit at the most competitive and innovative edge of the market, where developers attempt to reinvent the concept of a residential development by fusing the best of hotel and other services into a residential template.
It’s this innovation that attracts buyers who are looking to buy into the latest trends, Liam Bailey, the Knight Frank head of residential research said.
Another benefit of branded residences is the incorporation of hotel-style services for security and privacy.
Knight Frank say the service and facility standards have risen in hotels and therefore demand for similar standards in branded residences has followed suit.
Hitchcox says activity and interest in India has been huge with branded developments.
“The Indian market has been very receptive to the concept of branding and links with celebrities,” he says.
Branded developments by Yoo include Barkli Park and Barkli Virgin House in Moscow.
During July and August 2012 Knight Frank assessed like-for-like pricing for 26 branded developments in 17 global locations, together with 79 comparable prime non-branded developments where the price evidence was strong enough to be able to confirm typical values on a per square foot basis.
Australia was not one of the locations.
Their analysis - allowing for differences in development location, unit sizes and specification - confirmed that, for each location branded developments outperformed non-branded developments.
The results confirm that branded developments are priced at a premium to non-branded developments with an average 31% uplift, although the rate of uplift ranges from 5.7% in Jakarta to over 50% in several locations.
Dubai achieved the highest uplift per square foot with an average of 58.5%.
Dubai is home to the fashion branded Palazzo Versace residence, which achieved an uplift of 120% against the unfinished D1 apartments.
Berlin achieved the second highest uplift of 57% per square foot and Capetown achieved an uplift of 51.8%.
The lowest uplift was achieved in Jakarta with an uplift of 5.7% when compared to non-branded developments.
Kuala Lumper achieved 35.7% price uplift per square foot and Kong Kong achieved 19.1% uplift.
Bangalore achieved 27.4% uplift and Pune achieved 38.9% uplift.
Bangkok achieved 21.4% and Beijing achieved 26.7% uplift.
Moscow achieved 23.7% uplift and Shanghai achieved 33.5% uplift.
New York is in the lower spectrum with an uplift of 12.4% and Miami achieved 19.6% uplift.
Puerto Rico is in the higher spectrum achieving an uplift of 45% per square foot.
London had an uplift of 11.3% and Madrid had an uplift of 22.4%.