Seeking to expand their influence in the luxury market over six months on from the creation of the joint venture, Authentic Brands Group CEO Jamie Salter and Saks global executive chairman Richard Baker plan to leverage the brand strength of department store group Saks Global – which includes Saks Fifth Avenue and Saks Off 5th, Neiman Marcus, and Bergdorf Goodman – to form global partnerships.
“The model truly works. But we’re not just in retail, we’re also in hospitality business, we’ll see Saks branded residences going out, which means people will also buy home products from Saks stores for those. We already have projects on the go and have people in the Middle East and Asia Pacific looking at doing a Saks store, a condo and a hotel,” Salter says.
They would not be the first luxury retailers to try their hand in the residential space. While hotel-branded residences continue to dominate the sector, accounting for 79 per cent of developments in 2024 according to Savills, some of Europe’s leading fashion brands – including Bulgari, Armani and Versace – have already found global success with their branded residence options. LVMH has also invested in the Orient Express travel and hotel brand.
For its part, Bulgari has opened a total of nine hotels around the world, while broker Savills says that ‘lifestyle’ brands now account for 21 per cent of the sector, particularly in urban markets. Portugal is one of those locations embracing this shift, with projects by Karl Lagerfeld and YOO Studio set to debut in Lisbon.
Karl Lagerfeld’s Lisbon project follows previous ventures into branded residences including Karl Lagerfeld branded villas in Dubai and apartments in Marbella. In May, Chelsea Football Club announced a tie-up with Dubai-based branded residences developer Damac to open the first football-related residences, located in the emirate and the apartments sold out within 90 seconds of being made available.
Non-hotel brands expand
Where many of the non-hotel branded residences differ from their hotel-branded rivals is that the residential offer may not be directly connected with a hotel. By contrast, luxury hotel brands tend to co-locate their hotel and residential offers in order to benefit from and leverage the operational efficiencies of the hotel’s facilities and management.
Globally, Dubai has retained its position as the leader in branded residences, according to Savills. In all, there are 740 completed branded residences worldwide, with a further 790 anticipated by 2031 across 100 countries. Dubai alone has nearly 140 projects, including completed and projected over the forecast period, including non-hotel collaborations with renowned designers, catering to luxury buyers and investors alike.
Thailand is another active market. Thai property developer Ananda Development is working with Porsche to build the Porsche Design Tower Bangkok, the first building of its kind in Asia and the third globally, following Porsche Design real estate developments in Miami and Stuttgart. The project features 22 duplex and quadplex ‘sky villas’ ranging from $15 million up to $40 million and is set to be completed at the end of 2028.
“This unique, exclusive architectural masterpiece fits perfectly into our approach to broaden the appeal to our most discerning customers by offering them exclusive experiences in all areas of life,” Lutz Meschke, deputy chairman of the executive board at Porsche says of the scheme.
Meanwhile there are also brands such as Fendi, Armani and Nobu entering the Thai residential market.
Florida attracts car brands
Florida is another centre of the fledgling industry. Car manufacturer Mercedes-Benz announced last year that it will open Mercedes-Benz Places in Miami, a mixed-use tower including private residences and a hotel. The 67-storey tower in the city’s Brickell neighbourhood will be delivered in partnership with real estate firm JDS Development Group and will comprise 791 residences, a 174-key hotel, office space, health and wellness facilities, and retail. Aston Martin and Bentley already have residences in south Florida, while Mercedes-Benz also has plans for a 65-storey residential-led building in Dubai.
According to Rico Picenoni, head of Savills’ global residential development consultancy, the branded residences concept is diversifying and entering new geographies.
“Over the next five years, we anticipate the entry of 60 new brands into the market, with branded residences expanding into regions such as Romania and Tanzania. The Middle East, and particularly Dubai, remains at the forefront of this growth, reflecting how the sector continues to evolve and adapt to the demands of a discerning global clientele,” he says.
However, he cautions that for investors the core market expansion still sits firmly with the traditional, global hotel brands, which continue to dominate the market.
“The forecast remains such that for every two non-hotel branded residences, there are nine hotel branded residences being developed. Although some non-hotel brands have powerful brand recognition, hotel brands are more versatile and better resourced than non-hotel brands,” he points out. “The forecast suggests that hotel brands will capture market share from the non-hotel brands.”
That said, while the connections between global luxury retail brands and car makers with upscale residences are perhaps the most logical brand extensions, the proposed market entries from US department store chain Saks Global and London football club Chelsea reflect a broadening of brand leverage.
What began as an offshoot of primarily resort hotel offers is opening up to a plethora of brands and, if successful, will no doubt encourage more diverse brands from outside the hospitality industry to leverage their consumer appeal and target wealthy individuals and investors.
“To effectively compete on a global scale in the branded residential sector, non-hotel brands still need to provide long-term value and service solutions,” Picenoni says. “It is not just about the product, but rather the intangible that distinguishes a branded residence from an unbranded residence.”
By Mark Faithfull
