Spain is growing in popularity thanks to new branded apartments: more offers up to 30.000 euro/m2.

Spain is gearing up to lead the take-off of a new luxury housing concept in Europe. Called "branded residences", this model started in the US four decades ago and is gradually gaining popularity in the domestic market thanks to prestigious brands such as high-end hotels, fashion brands or auto giants.

There are currently five projects with 300 such residences developed in Spain, but forecasts point to more than 300% growth in the coming years. According to consultancy Colliers, the supply will reach 1,200 units in four years, spread across 17 projects located in the country's main tourist centers, and prices will be increasingly higher: in some cases they will be between 20,000 and 30,000 euros per square meter, well above the 15,500 euros per square meter at which the "branded residences" of the Four Seasons Hotel in downtown Madrid were sold in 2017.

Projects in Spain

The hotel chain's project is also joined by the Mandarin Oriental hotel in Barcelona and three projects by Abama in Santa Cruz de Tenerife. They offer a total of 278 properties, but with projects under construction and planned, in four years only 1,200 luxury residences of this type will be offered on the domestic market, whose main characteristics are exclusive design, attractive location or services provided.

These new projects are not only hotel brands (such as Four Seasons, Marriott, Mandarin Oriental or Hilton), but also some famous fashion brands (such as Dolce & Gabbana, Karl Lagerfeld, Ellie Saab or Missoni) and some of the most famous car brands in the world (such as Lamborghini).

"Spain is experiencing a significant growth in the supply of 'branded residences', with 5 completed projects and more than 10 in development for the coming years. This 360% growth positions Spain as Europe's leader in 'branded residences'," says Colliers. An example of this interest is the Dolce & project;

"There are few examples now, but the trend is there, and we are at the right moment to develop it, despite wars and interest rates. After all, we are the Florida of Europe, such projects have legal protections and the macroeconomic environment is moderately optimistic, with climate and culture adding to the mix. The moment could not be more appropriate," insists the consultant.

Also important in the development of these luxury residences is the projected growth in the number of millionaires worldwide in the coming years.

The consultant also claims that the hotel sector is showing great interest in this segment and that other fashion brands such as Armani may also undertake developments.

The key features of luxury residences

The key features of these luxury residence developments branded by leading companies are their exclusive design, based on the brand, operator and local designers working together to tailor the product to the demand in the region, as well as the additional services offered to buyers, from cleaning services to managing potential rental properties or invitations to events, which allows for a connection with the customer.

It is also worth noting the variety of uses for this type of housing depending on the project. If it's on residential land, as in the case of the Four Seasons in Madrid, they can be first or second homes, but if the land is for tourist purposes, then legislation comes into play. For example, in Andalusia, use is limited to 60 days per year, while the rest of the time can be used for tourist rentals. In any case, these high-end residences can be rented out, generating income, and allow the management to be entrusted to an operator.

All this, according to Colliers estimates, increases the cost of such residences compared to standard luxury housing by 10-30%, depending on the services included in the price.

With regard to the price of the new "branded residences" that will soon appear on the market, Colliers believes that in some cases they can reach 30,000 euros per square meter. "Four Seasons residences in Madrid sold from 15,500 euros per square meter in 2017, with the most affordable home (one-bedroom) costing 3 million euros and the most expensive (penthouse) costing 18 million euros. And there are rumors that the residences that Mandarin is proposing in Barcelona will cost around 18,000 euros per square meter, but there will certainly be projects that will exceed 20,000 euros per square meter on average, which we have never seen in Madrid, while in some areas of the Costa del Sol they can reach 30,000 euros per square meter." according to the counselor. The strength and reputation of the associated brands justify this additional fee, providing higher property values and giving it a unique and distinctive character," concludes the consultant.

Projects in Spain