Global hospitality brands target Indian branded residences
“International Hospitality Brands Flock to Booming Indian Branded Residences Market”
International hospitality brands are showing keen interest in the Indian market for branded residences, as indicated by the SKYE Report. The branded residence sector in India has experienced significant growth, with international hospitality, lifestyle, and fashion brands making their presence known in specialized segments.
Based on research conducted by SKYE Hospitality, a hospitality consulting company, India currently boasts over 2300 branded residences, representing nearly 10 percent of the global supply, which is estimated at around 26,000 units. Globally, the branded residences market is expanding at a Compound Annual Growth Rate (CAGR) of 12 percent, driven by a resurgence in prime property markets, an increase in Ultra High Net Worth Individuals (UHNIs) and High Net Worth Individuals (HNIs), and a growing desire to own prestigious assets. This trend is gaining momentum across dominant markets in North America, Asia Pacific, and the Middle East.
Ankit Kansal, Founder & MD of SKYE Hospitality, notes, “In line with global trends, the branded residence market is rapidly gaining traction in India, with over 40 percent of the supply concentrated in Delhi-NCR. Other key markets include Mumbai (18.1 percent), Bangalore (16.2 percent), and Pune (11.6 percent). Factors such as the assurance of thorough brand-led due diligence, access to top-tier facilities, cutting-edge design, and high rental and appreciation potential are fueling positive demand.”
Branded residences typically operate on two models: the “Branded Name Model,” where a renowned brand lends its name for a fee, and the “Serviced and Managed Amenities Model,” in which a brand, usually a hospitality entity, partners with a top-tier developer to create a branded property, offering and managing services in exchange for a fee.
Taran Chabra, Director at SKYE Hospitality, emphasizes the mutual benefits for buyers, developers, and brands in the branded property development sector. Developers gain unique positioning and substantial benefits by selling inventory at premium prices, while brands diversify revenue streams and progress naturally, earning royalties and fees.
Several brands, both within and outside the hospitality sector, such as The Leela, Four Seasons, Oberoi, Trident, Grand Hyatt, Yoo, Trump Towers, Versace, and Marriott, have entered the branded residences market. The market in India is valued at Rs 22,800 crore, with Delhi-NCR contributing around Rs 11,000 crores. The average project size is approximately Rs 9-10 crores. As of now, 54.7 percent of projects have been delivered, with the rest at various stages of development.
“The branded residence segment is a key asset type to watch, given its immense growth potential. With a significant pipeline of properties nationwide that can be converted into branded residences, both in metros and tourist destinations, and considering India’s 850,000 HNIs & UHNIs, the current supply of a few thousand units falls short. Recognizing this dynamic, we have established SKYE, which will act as a bridge between developers, brands, and investors, providing services such as market insights, development consultancy, and feasibility support,”