Encouraged by growing demand from high-net-worth individuals, luxury hotel chains in India are expanding their portfolio of branded residences to cater to a wealthy clientele seeking premium living experiences.
Marriott International, the world’s largest operator of hotels and branded residences, and a pioneer in managing standalone branded residences, has recently signed its first agreement for JW Marriott-branded residences in India, starting in Hyderabad, and is currently in negotiations for additional locations. Likewise, Hilton is actively exploring opportunities to expand the reach of its luxury brands such as Waldorf Astoria and Conrad into major cities to introduce branded residences.
In May 2022, India’s EIH partnered with B I Luxury for its inaugural project, Trident Residencies. According to Shashank Bhagat, chairman of BI Group, the apartments and penthouses will be ready for possession by October this year. These standalone properties, featuring five-star amenities and priced between INR 18 crore and INR 45 crore, do not share premises with hotels. Among the notable owners are Sunil Kant Munjal, chairman of Hero Enterprise, and the Pai family of the Manipal Group.
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Hotel operators and investment advisory firms report that India’s affluent are increasingly drawn to branded residences due to their access to world-class amenities and personalized services synonymous with luxury hotels. They note that while this concept is firmly established in developed hospitality markets such as the US, Middle East, and Europe, it is now gaining momentum in India.
“Developers are gearing up to seize the immense potential, forging lucrative partnerships. We’re actively conducting feasibility studies and brand affiliation assignments for projects in Solan, Chikmagalur, Goa, Dharamshala, and Udaipur,” said Nandivardhan Jain, CEO of Noesis Capital, a hotel consulting and advisory firm.
Penny Trinh, senior director, mixed-use development, APEC, Marriott International, said, “The increasing number of UHNWIs/HWNIs in India, along with a growing demand among domestic consumers for a lifestyle that mirrors our brands’ design, services, and amenities that consumers have come to love during their travels, offers exciting growth opportunities for branded residences.”
Trinh noted that prime urban areas such as the NCR region, Mumbai, Bengaluru, Hyderabad, and Chennai, along with resort destinations like Goa, Himachal Pradesh, and Udaipur, are perfect settings for branded residences. Suma Venkatesh, Executive Vice President of Real Estate and Development at The Indian Hotels Company, which operates the Taj brand of hotels, concurred with this assessment.
“There is potential for Taj branded residences along with a hotel development in every metro city,” she said.
In April 2022, IHCL made its debut in the branded residences sector by signing another Taj hotel in Chennai. The forthcoming development, operating under a management contract, will incorporate branded residences within the hotel complex. This greenfield project will consist of a luxury hotel offering 235 rooms alongside 123 Taj branded residences. Construction is currently in progress, she confirmed.
“We are seeing a healthy demand for this segment fuelled by the boom in the real estate market and growth in wealth accumulated by HNIs. The growing economy and evolving consumer preferences are also some contributing factors to grow the appetite for luxury living experiences; one can only expect more innovation and diversification in this space,” said Zubin Saxena, senior vice-president and country head, India, Hilton.
On average, branded residences typically command a 30% price premium over non-branded residences in various markets. Homebuyers are inclined to invest in reputable brands that provide assurance of quality, she highlighted. Early entrants into the segment in Mumbai include Ritz Carlton, Leela Hotels, and Four Seasons, who have already established branded residences.
Bhagat of BI mentioned that their “company is currently in the stages of acquiring land for an additional project under the Oberoi brand in Bengaluru.” He emphasized that the primary challenge for such projects, particularly in metropolitan areas like Delhi, is land acquisition. Requests for comments sent via email and text message to a spokesperson for EIH went unanswered as of press time.
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