India quietly joined the global luxury market for branded residences at the end of 2021 and is now among the top ten markets globally. Several international hospitality and lifestyle brands have expressed an interest in partnering with Indian real estate developers. The report, “Branded Residences—Global Supply Forecast 2025/26,” conducted by Savills, found that India is now ranked with countries such as the USA, UAE, Thailand, and Vietnam regarding the total number of planned or completed branded residential projects; at the same time, the global branded residence supply is projected to reach approximately 910 units by the end of 2025.
The driving factors behind this surge in demand for branded residences are multi-faceted: increased household income levels, a larger base of affluent consumers, and an unprecedented level of interest from global brands in developing branded residential projects. In the past five years, as identified by Savills, there has been an enormous increase in the number of branded residences built and available for purchase throughout the Asia-Pacific region. India is the main cause of this rapid regional growth and change. As India transitions to becoming a luxury residential marketplace, the same factors driving this growth, in addition to new levels of connectivity networks and new trends of cross-border purchases developing between Indian consumers and international consumers, will continue to contribute significantly to India’s growth as a luxury residential marketplace.
The creation of high-quality brands and brand residences is a means of allowing high-quality products to live up to their high price points: that is, high-quality brand residences are not a marketing technique, but instead are the upper limits on how a brand can monetize itself going forward. Savills has indicated that the average global brand premium is 33% higher than the average luxury single-family unit in the same location with comparable market value (average home). As such, both investors and owner-occupiers who purchase branded single-family units have greatly increased durability/resilience over each of their respective correlations between major economic disruptions. It is this perceived strength and prestige that prompt international names to provide (license) their brands and service concepts to Indian projects.
In India, where the emerging metropolitan areas of Mumbai, Delhi NCR, and Bangalore sit, is reflected by Savills’ newfound data set when comparing them to “Emerging City” markets. Emerging city markets provide, on average, a more robust price premium for branded products than do long-established global hubs. More and more, developers and brands are betting on the weekend and shorter-drivable “branded weekend” homes. For example, Mumbai—Alibaug—Lonavala; Delhi—Rishikesh—Neemrana; and Bangalore—Coorg. These “branded weekend” projects provide wellness and hospitality-style services, curated lifestyle offerings, and a private club-like sense of exclusivity for their buyers.
The rapid transformation of the hotel sector is being accelerated through the emergence of new partnerships beyond traditional hotel companies, as illustrated by the emergence of numerous fashion, auto, and design brands. New subcategories of branded residencies that focus on themes like sports, gaming, and entertainment will evolve due to this transformation. Given India’s worldwide reputation in cricket, digital gaming, and film production, it is poised to pioneer the creation of branded concepts that represent both its heritage and its beloved cultural icons as well as those from around the world.
India-Dubai Property Connections
As seen in the previous section on how branded residencies are evolving, there is currently an emerging trend of high-net-worth Indian investors who make up an increasing amount of foreign investment in Dubai’s luxury real estate market. This trend has established a new trans-regional luxury corridor between India and Dubai, whereby tax efficiencies, ease of travelling between both regions globally, and high level of quality of life throughout each region account for making the emirate a natural sister market with Indian aspirational buyers. Developers will need to consider this new avenue of investment when determining how to package and price their Indian-branded projects.
The branded-residences sector presents significant risks and fees associated with membership.
Branded residencies typically have high ongoing service fees and restrictive management agreements and operate under the assumption that members share a common lifestyle ethos, similar to the expectations for membership-based homes/properties. For many who are purchasing branded residences, it may not be as easy as deciding whether the benefits (i.e., worldwide concierge, service consistency, liquidity in select countries) exceed the associated cost of ownership and resale prospects. Savills suggests exponential growth in future opportunities to participate in the branded residency market across the globe, with a variety of new countries and brands entering this segment of the market that will create a greater level of competition and increase the need for developers to distinguish their products via experiences as opposed to simply by their brand names.
To put it succinctly, India’s emergence as one of the top ten countries for branded residences signifies an important paradigm shift in luxury residential real estate in India. Major players in the hospitality, fashion, and entertainment sectors are now beginning to understand how to convert their brand equity into tangible building products, leading to a rapid evolution of the Indian market. Consequently, the demand will shift from solely focusing on home ownership to also encompassing a lifestyle experience for a specific target audience. And the real question now is: Which Indian cities will become the next signature branded neighborhoods, and who will be the global brands?
