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Luxury brands have always looked for ways to expand their influence and diversify their income streams. Real estate, especially the high-end residential market, fits perfectly with their brand image and gives them a chance to cater to their upscale clientele.
Moving into real estate is a natural step for luxury brands, reflecting their core values — exclusivity, quality and a premium lifestyle. By investing in residential projects, these brands can offer a more complete luxury experience to their customers.
Take Miami, for example. It’s become a hotspot for luxury brands wanting to broaden their horizons and provide their customers with an elite lifestyle. The city’s warm weather, stunning beaches and vibrant atmosphere make it the perfect backdrop for these exclusive ventures.
Origins: Where luxury meets prestige
The trend of luxury brands entering the residential real estate market can be traced back to the early 2000s. This move is part of a broader strategy to extend their brand influence beyond fashion and into other aspects of luxury living, providing their clientele with a complete lifestyle experience.
While there is no formal definition, a branded residence is generally recognized as a residential property that is associated with an established brand, such as a hotel operator. The brand provides the property with its branding, services and amenities.
Giorgio Armani was one of the pioneers, launching Armani/Casa in 2004, which focuses on interior design and furnishings for luxury residences around the world. Armani/Casa’s projects include high-end properties in cities such as Dubai, Istanbul, London and New York, showcasing the brand’s commitment to elegant and sophisticated living spaces.
Following Armani’s lead, other fashion houses began to see the potential of merging their brand identity with real estate. Versace launched its first branded residence, Palazzo Versace, on Australia’s Gold Coast in 2000. This success led to subsequent projects in Dubai and Macau, featuring opulent interiors and bespoke furnishings that embody Versace’s bold and glamorous aesthetic.
A look inside the most exclusive developments
Projects like the Estates at Acqualina, designed by Karl Lagerfeld, and the Bentley Residences, reflect how these brands integrate their aesthetic and quality into real estate.
The St. Regis Bal Harbour Resort, soaring 27 stories above the trendy Collins Ave in Miami, graces a stunning white-sand beach. This luxurious hotel sits at the crossroads of art, fashion and design. Its prestigious Forbes Five-Star and AAA Five-Diamond accolades highlight its exceptional service and amenities.
Fendi also entered the real estate market by providing interior design services for high-end residential projects. The Fendi Château Residences in Miami, completed in 2016, is a prime example of how the brand integrates its signature style into real estate. The building features Fendi-designed furnishings and common areas, reflecting the brand’s dedication to craftsmanship and innovation.
Bentley, the British luxury car manufacturer, has teamed up with Dezer Development to create the Bentley Residences in Sunny Isles Beach. The 60-story tower will have 200 luxury condos, and each unit will be designed with Bentley’s signature craftsmanship and attention to detail.
The Waldorf Astoria, a luxury hotel chain, has partnered with developer PMG to create the Waldorf Astoria Hotel and Residences in Downtown Miami. The development will feature a 100-story tower with a five-star hotel and 360 luxury condos.
These branded residential projects are not limited to interior design alone. Many luxury brands collaborate with renowned architects and developers to create buildings that stand out in the skyline. For instance, the Porsche Design Tower in Miami, completed in 2017, offers a unique blend of luxury living and automotive engineering, including car elevators that allow residents to park their vehicles directly in their apartments.
Motivations behind the move
Luxury brands venture into real estate with a clear goal: to integrate their offerings seamlessly and provide a complete luxury lifestyle experience, fostering stronger brand loyalty among their clientele. Branded residences go beyond mere living spaces; they embody prestige and exclusivity, catering to affluent buyers who seek a symbol of status and ensure consistency in their service and attention to detail for their other luxury products.
For luxury brands, developing branded residences is a strategic move to expand their global footprint, especially in emerging markets witnessing a surge in demand for luxury lifestyles.
Branded residences, enriched with concierge services, bespoke interiors, and exclusive amenities, further entice affluent buyers. This trend extends beyond fashion to automotive brands like Aston Martin, evident in their Aston Martin Residences in Miami, showcasing the convergence of luxury and real estate.
Market impact
According to the Knight Frank Wealth Report 2023, there is an expected 12 percent growth each year predicted in the branded residences market sector up to 2026.
Luxury Miami condos with strong branding fetch top dollar, drawing in wealthy buyers who crave exclusivity and prestige. These projects boast a plethora of upscale amenities, such as exclusive dining options, boat experiences, luxurious spa facilities, and personalized concierge services, taking residential living to unparalleled levels of luxury.
Florida is the top U.S. state for luxury branded residences, with 32 live and pipeline projects currently, and Miami contains 80 percent of Florida’s schemes, which currently has 11 operational schemes with 10 more on the way by 2026, according to the Global Branded Residences Report by Knight Frank.
Future trends
Going green has become a major focus in luxury real estate. Brands are all about sustainability now, using eco-friendly materials and practices to catch the eye of buyers who care about the environment. They’re talking about sustainable building materials, energy-efficient designs and tapping into renewable energy sources.
And let’s talk tech — smart homes are the new norm. You’ve got lights that know when to turn on, climate systems that adjust to your liking, and top-notch security with fingerprint entry and high-tech cameras. It’s not just about luxury; it’s about making life easier and safer. Big names, including Amazon and Google, are leading the charge, making homes smarter than ever.
Plus, wellness is a big deal in luxury living. Developers see a growing emphasis on including spas, gyms, yoga spots and wellness centers, all geared toward promoting a healthy lifestyle. It’s about living large and feeling great, catering to the tastes of today’s discerning buyers.
Understanding why luxury brands are moving into real estate is essential for agents to hear about the evolving strategies of these brands and their efforts to create more immersive and comprehensive luxury experiences. Second, it sheds light on the broader economic and cultural trends influencing high-end markets, such as the demand for unique and prestigious living spaces.
Lastly, for potential investors and affluent buyers, this knowledge can provide valuable insights into the growing intersection of luxury branding and real estate, helping them make informed decisions about their investments and lifestyle choices.
The shift into real estate is not just about selling properties; it’s about extending the brand’s reach into every aspect of a luxurious life, creating spaces where the brand’s essence is felt in every corner. This move underscores the brands’ commitment to quality and exclusivity, ensuring that their high standards are met in the homes they help create.
This trend offers a glimpse into the future of luxury living and the continuous innovation that defines the high-end market.
Chad Roffers is the chairman of international luxury real estate company Concierge Auctions. Follow him on Twitter.