Real estate firms and luxury giants such as Armani, Aston Martin, Bulgari and Porsche are teaming up to further their brand equity
Leveraging their aspirational quotient and brand equity, premium lifestyle and real estate brands are increasingly finding synergies with one another. With high-net-worth individuals (HNIs) desiring to not only “wear” or “drive” luxury, but also to “live” it on a regular basis, global names like Armani, Four Seasons, Aston Martin, Bulgari, Versace, Porsche and Mandarin Oriental have are signing licensing deals with top-notch real estate developers to create super-grand, immersive, living experiences.
Italy'sVersace has tied-up with real estate brand Unity Group to create 160 branded luxury apartments spread across two 46-storey twin towers in New Delhi. The brand has another ongoing project in India in partnership with the real estate brand ABIL Group, offering bespoke luxury residences in South Mumbai that have a creative touch of Donatella Versace.
Meanwhile, Four Seasons has upscale residential projects in Bengaluru and Mumbai, which boast of an unparalleled luxury living complete with exclusive spas, wine vaults, temperature-controlled pools, among many other things.
In the recent past, Italian fashion powerhouse Giorgio Armani partnered with Lodha Group to exclusively design apartments at their residential towers in Central Mumbai.
According to London-based property consulting firm Savills Plc, there are currently over 400 such designer properties worldwide, with an additional 110 slated to open in the next four years, with a total of 69,000 residential units.
Experts say the designer residences immensely benefit both the real estate and lifestyle or hospitality brands. For the real estate brands, synchronising with an Armani, or a Porsche or a Bulgari means gaining a significant edge in a market where cut-throat competition is the norm.
“Brand collaboration in the uber-luxury residential space can be either cosmetic or coherent. Coherent branding directly boosts the habitability, status and the value quotient of the unit and this primarily originates from the design elements and amenities. For example, in one of our uber-luxury residential projects in Mumbai, two of the biggest names in architectural and interior designing like the UK-based Fosters+Partners and HBA have collaborated. In most cases, it is the design elements or spaces which uplift the lifestyle of individuals and this has greater perceived value,” says Rahul Maroo, CEO, Omkar Worli, Chief Strategy & International Business, Omkar Realtors.
Luxe-branded projects command a 25-30% premium. A Versace or Bulgari branded residence is usually spread across multiple thousand square feet and fetches upwards of Rs 40-50 crore per unit in India, or more than $2-5 million in any global city.
“Studies have confirmed that more than 90% buyers choose to invest in us based on quality and brand reputation. We are able to uphold our high standards of quality and service and create a truly exceptional lifestyle. The brand, on an average, generates 30% premium price for the real estate. And what this does in turn for the brand is that it helps to create a base of luxury customers who want to live with our brand and make it their home,” says Rahul Mamgain, director of residences, Four Seasons Private Residences.
According to Nandivardhan Jain, CEO, Noesis Capital Advisors, a leading hotel investment advisory firm, globally, this phenomenon has evolved in mature markets such as London, Dubai, US, etc. “Branded residences have an aspirational value attached to them and command higher valuations since they boast of top-class quality with a certain grandeur attached and are fully-serviced units with the most modern and contemporary amenities,'' says Jain.
Besides the premium that these upscale designer apartments fetch, they also benefit the luxury lifestyle and hospitality brands that have lent their names. Experts say luxury brands charge an upfront fee and royalty at the time of sale from their real estate partners, with the royalty amount being anywhere from 3-5% of the transaction value. Moreover, the project risk is almost entirely with the developer, which means the designer brand has only to gain.
Brands like Four Seasons are thus looking to expand their residential footprints. “We continue to grow our portfolio of private residences. We currently manage 41 residential properties in 19 countries. In the next five years, the Four Seasons residential portfolio is expected to double, with over 80% of all development projects including a residential component,” adds Mamgain.
IN THE LAP OF LUXURY
- Over 400 – Designer properties worldwide at present
- 110 – More slated to open in the next four years
- Rs 40-50 cr – Such a home costs in India
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