The luxury real estate market is looking to Spain. There are plans to introduce 1,200 “branded residences” to the market by 2027.
The market for branded residences in Spain is experiencing unprecedented growth, with exponential growth predicted over the next four years. The truth is that Spain currently has only 500 units, Antonio Pan de Soraluce, founding partner of Blasson Property Investments, said at the recent Premium Real Estate Summit.
In this scenario, it is developer Sierra Blanca that has built the largest number of such luxury assets. “We brought the first Fendi Casa residential project in Europe to Marbella, the first Karl Laegerfeld villas in the world and the first Dolce & Gabanna project, along with the one in Miami, to Spain. I’m very proud of this, because each of these brands told us “no.” They told us that Spain was not ready, that they had to do a project in Paris, London or Miami first. Today I can say that Spain was not only ready, but is ready for much, much more.” – CEO Carlos Rodriguez said at the event.
In fact, the consulting firm Colliers has already recognized the attraction and dared to provide growth figures. According to data from an analysis prepared by Colliers with data through the third quarter of 2023, rapid growth is expected over the next four years, or until 2027, exceeding 1,200 units, with the Costa del Sol being the preferred destination for investors, exactly in the area where Sierra Blanca units are located.
Madrid is the other pole of attraction for branded residences. In fact, the capital can boast of having hosted some of the first homes of this type, and at the hands of such a renowned brand as Four Seasons. Moreover, these branded residences are the only ones in our country that are located in the same place as a hotel complex. “In Madrid, it is more normal to have” stand-alone “projects (without integration with the hotel),” – Mr. de Soraluce said at this luxury real estate event.
These projects rely on close collaboration between developers and established brands, which can be both hotel and non-hotel, to offer residents a personalized, high-end experience. Brands such as Four Seasons, Mandarin Oriental, Marriott and Accor dominate the hospitality sector, while luxury, fashion and automotive brands such as Fendi, Missoni, Dolce & Gabbana, Karl Lagerfeld and Lamborghini have joined forces with national and international developers to expand the concept of high-end residences.
According to a Colliers report, the future of branded residences in Spain is more than promising. The Costa del Sol, and Marbella in particular , is attracting the attention of investors and developers and is expected to be an epicenter of growth. By 2027, nearly 900 homes of this type could be built in the province of Málaga, concentrating 93% of the future market supply in Spain.
It was in Málaga that one of the latest “branded residences” projects was announced. In this case, it’s an alliance between luxury developer Caledonian and Marriott International that will result in the construction of 46 branded residences located in Finca Cortesin (Málaga), which will bear the stamp of the luxury hotel brand St. Regis.
During the summer, Málaga was once again in the news for the development of branded residences when Versace announced a luxury villa project with RGZ Developers. The residences, located in a privileged part of Nueva Andalucía in Marbella, are valued at more than €10 million.
Types of products
There are two main types of branded residences: those associated with hotel chains and those associated with other luxury brands. The former are more common and are operated by hotel chains, offering five-star services such as security, in-house restaurant, spa, concierge, laundry and room cleaning. Examples include brands such as Four Seasons, Hilton, Marriott and Accor.
In this model, owners typically use these residences for only part of the year, letting the hotel chain manage the property the rest of the time. The second type of branded residences is tied to luxury brands outside the hotel industry. Fashion brands such as Fendi, Dolce&Gabbana, Karl Lagerfeld and Bvlgari have invested in such projects. Luxury car brands such as Lamborghini, Porsche and Bentley are also exploring this market.
Factors driving growth
The growth of branded residences in Spain is being driven by three key factors:
- Increased demand for luxury real estate: in 2022, luxury real estate purchases increased 45% year-on-year, exceeding 1,000 transactions exceeding €2 million. This is twice as many as in 2019, before the pandemic, showing a strong appetite for exclusive properties.
- Increased foreign investment: In 2022, foreign real estate investment in Spain increased by 59% compared to 2019 levels, reaching €12.17 billion. This growth reflects Spain’s attractiveness as a safe and profitable destination for international investors.
- Strength of the tourism sector: Spain remains one of the world’s leading tourist destinations, with favorable growth forecasts. This strong tourism sector is bolstering demand for luxury real estate, as many investors are looking for homes that combine exclusivity with the ability to access first-class hotel services.
