How Indian HNIs are drawn towards branded residences

financialexpress.com:

The Indian HNIs are getting drawn towards branded residences. Lured by their aspiration to own a premium asset and access to superlative services, Indian HNIs are showing newfound interest in branded residences. As per the latest research by SKYE, a hospitality development and consultancy company, India has around 2300 branded residences, a modest share in a global supply that amounts to 26,000 units. However, the segment will soon change gears, as demand is picking up quickly.

Most branded residences are limited to metropolitan cities in India, unlike global markets which have a healthy mix of urban and remote projects. Nevertheless, given the demand is expanding we can soon see some coveted projects in Goa, Himachal, and Uttarakhand.

There is no standard definition for branded residence. However, in simple terms, it is when a brand (hospitality or other) partners with a developer in return of a royalty and/or management fees. A branded resident should not be confused with a service apartment. However, they can be rented out at the owner’s discretion, making a constant flow of income.

It is not a novel idea as the concept of branded residence dates back to the 1920s. It picked up in 1980s with four seasons playing an active role. Later other brands like Mandarin Oriental, Ritz Carlton, Mariott joined the bandwagon. Today non-hospitality lifestyle brands such as Versace, Armani, Yoo, Trump Towers are also active in the niche segment.

Currently, North America is the biggest market with around 30-35% of the supplies concentrated in the cities of LA, New York, and Miami. Meanwhile it is also spreading at a staggering pace in Asian and middle eastern markets.

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