5-Star Living

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The paradigm of luxury is no longer just good infrastructure, localities, and connectivity. It has expanded in several ways.

If you're in the market for a luxury home, there's a good chance you could buy one developed by hospitality companies like Taj or Westin, instead of the well-known property developers. While these companies are obviously known for their luxury hotels and resorts, they're now entering the residential real estate market with "branded residences". It's the latest trend in the luxury segment. The pitch is simple - imagine living in an ultra-luxurious space backed by some of the world’s top hospitality brands.

Market landscape

It's a growing market. According to hospitality development and consultancy company SKYE, India has about 2,300 branded residences. That's modest compared to the global supply of 26,000 units. North America is the biggest market right now, with 30-35% of the supplies concentrated in Los Angeles, New York, and Miami. It's spreading steadily in Asia and the Middle East.

Some examples are the Ritz-Carlton Residences, NoMad in New York, The Residences at St. Regis in Chicago, and the Mandarin Oriental Residences in Barcelona. You've even got luxury brands like Armani getting into the act.

Growing demand

Coming to India, over 40% of branded residences are concentrated in Delhi NCR, followed by 18% in Mumbai, 16.2% in Bengaluru, and 11.6% in Pune. If we're talking in terms of value, the market is at about ?22,800 crore with room to grow. That's understandable since branded residences cost 25-30% more than regular luxury homes.

The market is booming thanks to High Net Worth Individuals (HNIs). The number of millionaires and billionaires in India has sharply risen over the past several years. They want to enhance their portfolios with high-end exclusive properties. Domestic and foreign brands want to expand their footprint in India as the country only accounts for about 3% of the global branded residence market.

It's why companies like Mariott, Westin, Oberoi, and Taj are investing a lot of money in branded residences. Last month, Mariott signed an agreement with Delhi NCR developer Whiteland Corporation to bring Westin Residences to Gurugram. It's expected to be India's biggest branded residence and the first standalone residential property without a hotel on-site. Taj is building its first residences in Chennai. More companies are following suit.

Right now, branded residences are concentrated in the big metro cities, but tier 2 cities aren't far behind.

Good for developers

While branded residences are still emerging in India, they achieve a 30% premium compared to their non-branded counterparts. This helps developers charge a premium and covers the cost of building a resort or hotel within a complex.

Hotel operators can earn royalty fees. It also paves the way for additional revenue by offering services like housekeeping and food & beverage.

The Indian consumer has become quite brand-conscious. With more money in their hands, they want to flaunt their style with luxury, including their abode. Why? Because it's no longer about just owning a home. It's about investing in an opulent and unparalleled lifestyle experience. Branded residences offer the perfect blend of comfort and luxury.