The branded residences sector has grown by more than 150% over the past 10 years and the pipeline remains strong with forecasts anticipating a near doubling of current supply levels, according to a new report from real estate advisor Savills.
The Savills study suggests that there are 640 schemes accounting for nearly 100,000 units around the world with supply levels forecast to exceed 1,100 schemes by 2027.
By volume of the pipeline, the United States, United Arab Emirates, Vietnam, and Mexico are forecast to add more than 30 schemes in each country, with the U.S. projected to add over 70 schemes alone. By scale of increase from the current supply, Egypt, Saudi Arabia, Cyprus, Qatar, and Costa Rica lead the table, each with growth of more than 300%.
Looking closer at the numbers, Dubai, South Florida, and New York are the top three locations for branded residences globally based on their supply of completed and pipeline schemes. However, growth in these markets is slowing – although still high – as many brands look for expansion opportunities in emerging cities and resort locations.
Of the top 15 locations, 10 of them are either resort or emerging destinations. Cities and resorts in emerging markets such as Phuket, the Caribbean and Mexico are being led by developments from both luxury and non-luxury brands.
“A growing younger buyer demographic is driving change in amenity and service offerings globally, with increasing interest and emphasis on office space, wellness, accessibility, and larger spaces for buyers who are spending longer periods in their residences post-pandemic,” said Kelcie Sellers, associate, Savills World Research.
Brands to watch
Marriott International remains atop the rankings for hotel parent companies, where it has been since 2002. However, in recent years, there has been a growing number of competitors both in terms of type and location of the parent brand.
Accor, for example, ranks third by number of completed properties in 2022, rising from fifth place in 2021. The company has expanded its presence in the sector significantly over recent years and has a considerable pipeline. This growth is expected to push it into second place, behind Marriott International, when factoring in pipeline supply.
Non-U.S. brands such as Emaar and Banyan Tree are growing as more residents of regions outside North America and Europe move up the wealth ladder. Among non-hotel brands, YOO remains the biggest residential developer.
Fast-growing economies such as Brazil, UAE and India are driving growth among non-hotel brands and forecast non-hotel brand scheme growth of more than 70% from current supply levels.