Growth! If there was one word to encapsulate the branded residences sector right now, that would the one. Developers have raced to launch projects, hotel companies have expanded into new markets and industry reports have charted ever-rising pipelines and premiums.
According to Savills, another 837 branded residential projects are expected to come to market by 2032 as branded homes continue to command an average 33 per cent price premium over comparable non-branded properties.
Hyatt’s big question
Hyatt is seeing the same demand. Tina Necrason, global head of branded residential at Hyatt agrees that branded residences are “one of the fastest-growing segments of luxury real estate in the world”, driven by popularity amongst the affluent and “multiple converging trends including a generational transfer of wealth and a greater emphasis on community.”
But amidst all this, Hyatt says it’s asking a big question: where exactly can these branded residences create long-term value, especially as the company continues to stress it’s not in the business of pursuing widespread growth for growth’s sake.
Speaking at the opening of Hyatt Regency London Olympia, Marc Jacheet, Hyatt's Group President for Europe, Africa and the Middle East returned to one idea.
“What matters the most for us is the relevance of the project. The right place, the right time, the right guest,” stressing the importance of making sure any projects materially strengthen Hyatt’s wider hospitality business.
The first phase of branded residences has been about proving that attaching a hotel brand to residential real estate generates higher prices. Now that’s done and dusted without a doubt, and Hyatt itself has demonstrated the success of the model in multiple formats.
The proof in the pudding
During the company's Investor Day, Amar Lalvani, executive vice president, president & creative director – lifestyle at Hyatt highlighted The Standard Residences, Midtown Miami, a 225-unit standalone development with no adjoining hotel, as evidence that a hospitality brand can generate residential demand on its own.
After years of building The Standard Miami Beach into one of the world's best-known lifestyle hotels, Lalvani said the standalone residences sold out faster than competing projects while achieving premium pricing.
“It was based purely on the power of the brand and the experience,” he stated.
He also pointed to Thompson Cabo, where the success of the hotel and residences has encouraged further Thompson mixed-use developments across Mexico.
“These are proof of high-quality owners choosing Hyatt... because of the type of customers we serve, the strength of our brands and the performance they generate.”
Essentially, the market no longer needs convincing that branded residences can sell and the financial case isn’t particularly controversial either as experts across the industry concede that branded residences have become an increasingly important part of how luxury hotel projects are funded.
Amongst those who tout the virtues of branded residences is Kate Peters, director of prime central London residential value & risk advisory at JLL. Speaking at the Operational Real Estate Summit late last month, she described branded residences as an increasingly important source of development capital, particularly as luxury hotel projects become more expensive and more difficult to deliver.
She cited projects such as The Peninsula London where the residential element alone is estimated to generate around £750 million in gross development value, Nobu Residences Miami which achieved around $1 billion in presales years before its scheduled completion in 2030, and The Whiteley in London where around 75 per cent of residences were sold before the adjoining Six Senses hotel opened.
“Branded residences can provide capital front-load and development security to difficult development projects,” Peters noted.
Jacheet adds: “For many, branded residences are part of the financial equation. You build branded residences, you sell the branded residences and that provides part of the cash for the hotel.”
So the economics are well understood and the industry is (mostly) on board. Which leaves an interesting question: what actually separates one project from another?
First, Necrason says part of the answer is a real focus on what the homeowners are actually buying, which is “care, access, privacy, wellness and community”, delivered in a way that feels personal rather than programmed.
“At Hyatt, our differentiated approach to branded residential is rooted in a deep understanding of how people want to live - with greater ease, more meaningful connection, and a stronger sense of belonging. It’s about translating hospitality into daily life with consistency, emotional intelligence and a unique sense of place,” she stresses.
She adds: “What makes Hyatt’s residential portfolio distinct is that every single residence takes the emotional relationship people have with our brands, mixed with Hyatt’s amenities and signature standard of service, and applying that to home ownership.”
Ecosystem play
Another part of the answer, as alluded to above, is the ecosystem. While standalone branded residences are growing in popularity and many see this as a sign that brands no longer require an adjoining hotel to create value, Jacheet refuses to focus on format. Instead he describes Hyatt as model-agnostic with a preference for those projects that feed that wider Hyatt hotel/hospitality ecosystem.
“I'm not sure opening standalone branded residences in a country where we don't have any hotels would be the first thing I would do. Would we say never? No. But it has to be the right ownership, the right investment, the right positioning and consistency with the brand,” he stresses.
Looking at Hyatt’s wider portfolio, the ecosystem strategy is evident. The company now has more than 50 branded residential projects open or in development globall across brands including Park Hyatt, Thompson Hotels, Andaz, Grand Hyatt, The Standard and Miraval. Recent additions include Miraval The Red Sea Residences in Saudi Arabia, Park Hyatt Los Cabos Residences, and the above-mentioned The Standard Residences Midtown Miami, which is the first standalone residences from The Standard brand.
The success of The Standard Residences shows that Hyatt believes standalone projects can work. But Jacheet's comments suggest the company does not see standalone as a strategy in itself.
Instead, branded residences appear to be evaluated according to how they reinforce Hyatt's wider operating platform: its hotels, its loyalty programme, its brand positioning and its long-term presence in a market. The question it is asking is whether the project strengthens the ecosystem around it.
Jacheet says: "If a residence benefits from the service of a world-class hospitality operator, buyers don’t have to worry about day-to-day operations.
Peters agrees that affluent purchasers are paying for “security, anonymity, operational excellence and absolute trust in delivery”, qualities that become more valuable as wealth grows and time becomes scarcer.