Branded residences are gaining momentum in Spain, with a projected growth to over 1,200 units by 2027. This unique real estate concept, blending residential and hotel elements, is experiencing exponential growth, driven by a surge in demand and investor interest. According to Colliers’ Branded Residences 2023 insight report, the Costa del Sol emerges as the preferred location for future developments, potentially reaching close to 900 units by 2027.
Spain’s Branded Residences Landscape:
Spain witnessed its first branded residence project, Las Terrazas de Abama Suites, in 2017 in Tenerife. Since then, the collaboration between real estate developers and hotel operators or brands has become more widespread, fueled by continuous demand and the rising popularity of this unique property type. The insight report anticipates an increasing number of hotel and non-hotel groups entering the branded residences market in Spain.
Diversification of Brands:
The diversity of branded residences in Spain is noteworthy, with leading hotel groups like Four Seasons, Mandarin Oriental, Marriott, and Accor alongside projects linked to fashion or automotive brands such as Fendi, Missoni, Dolce&Gabbana, Karl Lagerfeld, and Lamborghini. These collaborations, often with national or international developers, contribute to the exclusivity of these properties.
Future Projections and Key Locations:
Colliers reports a promising future for branded residences in Spain, with five projects completed between 2017 and the third quarter of 2023 and a pipeline of twelve projects scheduled for the next four years. While current offerings are concentrated in the Canary Islands, Madrid, and Barcelona, the Costa del Sol, particularly Marbella, emerges as the focal point for upcoming projects, comprising 93% of the future supply in this market.
Driving Forces Behind the Boom:
Three primary factors drive the surge in branded residences in Spain. First, a noticeable increase in the demand for luxury properties, with a 45% growth in 2022 compared to the previous year. Second, a significant rise in foreign investment in real estate, witnessing a 59% increase in 2022 compared to 2019, reaching €12.17 billion. Lastly, the robust fundamentals of the tourism sector, positioning Spain as a global leader with excellent growth forecasts.
Expert Insights:
Laura Hernando, General Manager of Hotels at Colliers, emphasizes Spain’s consistent and encouraging growth in the branded residences market, highlighting its origin in the hotel sector and expanding horizons for the luxury real estate market. According to Luis Valdés, Managing Director of Residential Sales Advisory at Colliers, Madrid, Barcelona, and Marbella will remain focal points for branded residences’ expansion, along with other luxury tourist destinations, including exclusive locations in the Balearic Islands.
In conclusion, the incorporation of notable international brands like Four Seasons and Mandarin Oriental has heightened demand, diversified clientele, and extended the market’s appeal to a global audience. The future of branded residences in Spain looks promising, driven by a blend of luxury, top-tier hospitality, and residential excellence.
