What makes the perfect second home abroad? The holy grail is to combine a charmed lifestyle with a solid investment. Owners ideally want a well-located home to enjoy with family and friends, safe in the knowledge that they are not taking unnecessary risks.
"Branded residences" attempt to provide this blend of investment and lifestyle by linking a luxury hotel or designer name with high-end residential space. This concept of a hotel-linked holiday home started — where else? — in New York in the Twenties but has seen a dramatic revival in the past decade, with successful operators now including Mandarin Oriental, Four Seasons, Hyatt and Six Senses, with design firms also getting in on the act. Dubai has both Versace and Armani hotel residences while design brand yoo sells funky property in places stretching from the Cotswolds to India.
Be inspired by the brand
The main advantages for owners include the kudos of association with a known name, the increased rental return the association can bring and access to excellent five-star services. Flashy gyms, pools, spas and 24-hour service are standard, with newer services such as dedicated sommeliers on offer in some places. It is, claim developers, perfect for affluent buyers short on time who are happy to let someone else run their home. The downsides include a price premium, though not always excessively high; service charges that can skyrocket, and no chance to put a personal stamp on a property that must reflect "the brand".
"Branded residences are viewed as a safeguard for buyers' money, reducing the risks when you buy abroad and providing fewer voids in rental periods for brands with good international reach," says Alex Upson, of Cluttons Resorts.
Typical premiums for branded residences are between 10 and 20 per cent, says Upson, adding: "These price premiums take away some capital gain but good schemes provide a solid rental income of between four to six per cent net."
Cluttons Resorts (020 7584 3050) is selling apartments at yoo Berlin priced from £320,000 and this summer launches homes at Pinheirinho Hyatt Golf Resort in Portugal's Alentejo from £197,950.
The suite life
Knight Frank's Global Development Review identifies 18 branded hotel residences worldwide, either recently completed or in the pipeline. In London, projects include One Hyde Park, with its connection to the Mandarin Oriental next door, while apartments at The Shard will be serviced from the Shangri-La Hotel.
Figures prove sales at resorts rise when brands are introduced: Savills reported a boost at Aphrodite Hills in Cyprus when the Intercontinental opened its doors. Four Seasons is the most successful internationally recognised brand for adding value. Its Marrakech project saw price premiums of up to 40 per cent against the market, though James Price of Knight Frank believes this is dependent on location and timing. "The premium is likely to be greater in emerging locations than established areas," he says.
Capital cities popular with international buyers are particularly suitable for branded residences but many top-drawer locations have enjoyed success. In Switzerland, where property sales have been largely insulated from the European recession, projects such as the Du Parc (+41 22 799 44 05) in Vevey above Lake Geneva, twinned with Kempinski Hotel, have sold well.
When Turkish businessman Sabir Yigit was looking for a partner for his off-plan development on the Bosphorus in Istanbul, he chose international design brand yoo (020 7009 0250), impressed by its appeal to design savvy younger buyers and proven track record in adding value.
"The design and lifestyle element of yoo's buildings and interiors has made it the top brand success story," says Yigit. "There are 38 yoo projects in 31 countries from New York to Thailand where, in general, property prices have risen by at least 50 per cent from off-plan sales to completion."
Founded by developer John Hitchcox with input from designers Philippe Starck, Jade Jagger and others, prices start from £90,000 for apartments at yoo Nordelta in Buenos Aires. Hitchcox reports a "huge surge" of interest from design-conscious buyers in emerging markets.