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Brands could drive property gravy train even faster, says report

Developers can increase profits by around a third by building branded homes, according to research by Knight Frank, the property agents.

The research found that developments linked to well-known designers or brands were around a third more valuable than similar projects nearby.

The trend follows moves by the hotel industry to embrace luxury design, premium brands and silver service, which experts say has pushed up consumer expectations. Emerging markets – generating huge swathes of high net worth individuals – saw the biggest price difference between non-branded and branded homes.
Buyers in places such as Latin America and the Middle East are more partial to labels than buyers in England and the US with an average 31 per cent value uplift identified in these areas.
Unexpected value increases of around 11 per cent were also detected in key Western markets such as London and New York.

Branding of residences creates an aspirational model that reflects the luxury and prestige associated with that brand, which helps developers to stand out in an increasingly competitive market.
The four key reasons for increased value were found to be:
• Branded developments sit at the most competitive and innovative edge of the market. This innovation attracts buyers looking for the latest trends.
• The benefits and convenience of the service offer mean people will pay more.
• Design and identity attract purchasers keen to be linked with a particular architect or designer.
• Trust associated with buying into a known brand is a big factor since a branded residence is often the buyer’s first step into international property, which can involve many complexities. It therefore offers confidence in the delivery of the development and its ongoing management.

John Hitchcox, chairman of yoo, the luxury property brand, says: “The essence of luxury living isn’t the bells and whistles, the décor or the eccentric public areas designs. It’s the sense of place and feeling of community that people buy into. When you walk into an Apple Store for example, you do so with certain expectations of freedom and service, so people look to premium homes with similarly high expectations.
“While prime residential property is better than gold as an investment class, some areas of the world are becoming overheated and having something extra to differentiate oneself from competitors is becoming more and more vital. As a result, the concept of branded residences is receiving increased attention from buyers, particularly in emerging markets as the report shows and I firmly believe that we will see an expansion of the branded sector in the future.”

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