“Private pool, premium security and 24-hour concierge service.” These are the characteristics of one of the luxury villas that is offered for the modest starting price of 4 million euros in Benahavís, on the Costa del Sol. A priori it is not far from other luxury houses in the area, but the Tierra Viva promotion inspired by Lamborghini is one of the 12 ‘branded Residence’ [residencia de marca] projected in Spain until 2027, the latest trend in luxury real estate in which the most exclusive cities in the country and, especially Madrid, will play a prominent role in the coming years.
‘Branded Residences’ are homes designed and managed by luxury hotels or brands specialized in the most exclusive segment. Karl Lagerfeld, Dolce & Gabana and Lamborgini are some of the houses that will sponsor homes in Spain in the coming years. In addition to the usual services integrated into this type of residence, these houses offer à la carte services, from concierge to make reservations at restaurants or theaters, to maintenance of common areas; which is seasoned with access to more exclusive services, such as favored treatment with the firm that puts the seal on your home. “Italian luxury brands began to position themselves very strongly in Dubai and now the model is reaching the rest of the countries,” she explained during the presentation of the annual report of VIVA Sotheby’s International Realy and its CEO, Paloma Pérez Bravo.
This type of product has arrived strongly in Spain, according to the real estate agencies consulted. At a global level, companies in the sector expect that the increase of the new rich will go to a new general market and, in the case of Spain, the low supply of these properties in the face of increasing demand, placing branded houses as one of the big. assets to follow in the real estate sector.
A booming segment in Spain
The latest ‘branded Residence’ outlook report from the real estate consultancy Colliers highlights that in Spain there are five housing projects already available, to which another twelve must be added planned until 2027 – five of which will be available this year – with a high incidence of developments on the Costa del Sol – 66% of all those planned and built – and the Canary Islands – 25% -.
However, the expectations are that the works will continue due to the success of the existing ones. The real estate agencies highlight a paradigmatic case for Madrid such as the Four Seasons project, the landing of the brand in Spain that mixed 15,000 square meters of shopping gallery, 200 high-end rooms and 22 ‘branded residences’ with a price of 4.25 million per media unit (with a total sales volume of 93.5 million), according to Colliers data.
The opening was scheduled for 2020, but the 22 apartments managed to be sold before the time of delivery, which alleviates a very high demand for this type of products, said Carlos Zamora, director of the residential area at Knight Frank, during a meeting. of the real estate firm.
Zamora pointed out that during the marketing period, which began in 2017, the average price reached by the Four Season promotion was 15,500 EUROS PER SQUARE METER (M²), while in 2017 he calculated that the rest of the promotions in exclusive areas of Madrid were They sold for prices that did not reach 7,000 euros m².
Madrid, in the spotlight
The success of these properties has generated the market through supply, highlighted by British real estate, and has put Madrid in the spotlight for new housing projects with a luxury seal.
“With the hotels it has, Madrid is positioning itself at the highest level of luxury,” said Pérez Bravo. The CEO of the real estate company points out that, in relative terms, the city has gained exclusivity. Neighborhoods like Salamanca in the capital were not seen as an exclusive environment for large international capital, she commented. However, “the client is already here, people are already arriving who spend 20 million like in London or Paris. Before that client was in Spain in Marbella or Ibiza,” she explained.
Added to this fact is a shortage of ‘prime’ products. [de alta categoría]. Zamora calculated that, as an example, new construction promotions in the Salamanca neighborhood have fallen by almost half and there are 35 new construction homes available, compared to a range between 70 and 75 that the real estate agency calculated. “Supply is very, very tight,” he wrote.
Potential buyers are growing
Added to the renewed interest in Spain is a new cohort of rich people who, it is estimated, are yet to come. According to data from Boston Consulting Group, between 2022 and 2027 the number of very high net worth individuals will grow by 5.3%. On a lower level, assets of more than one million euros will increase by 57% in the next five years to 109 million people worldwide. On the other hand, half of the new rich that will be generated globally will come from China and the United States.
The case of the US takes on particular relevance for Spain. In recent years, luxury real estate agencies are seeing a very high interest from buyers from across the pond in exclusive homes in Europe in general and Spain in particular, boosted by the depreciation of the euro against the dollar, which makes investments with the American currency. This has meant that, for example, the majority of VIVA Sotheby’s buyers in Barcelona are Americans, as highlighted by the company in its analysis of The new luxury for 2024.
Colliers’ latest ‘branded residence’ outlook report highlights that this expansion of potential demanders for exclusive homes creates an environment conducive to the “development and growth of the market” of branded residences, although only a privileged few will be able to enjoy it.
