The Branded Residence Premium Is a Launch Price. Underwrite What Survives.
Branded residences sell at a premium of about one third over comparable homes, and lenders increasingly count on those sales to fund the hotel beside them. That premium is measured when units first sell. Before a project is financed or a unit is bought, the figure to underwrite is how much of the premium survives resale, a change of operator and years of service fees.
The sector has nearly tripled in a decade. Savills counted 323 branded residential schemes worldwide in 2015 and about 910 by the end of 2025. Most of the new supply is going to resort markets, where premiums run highest and resale evidence is thinnest.
Growth has moved to resort markets and non-hotel brands
Savills expects the global count to rise from 764 schemes in December 2024 to 910 by the end of 2025, a 19% increase in one year. Its contracted pipeline takes the total to 1,747 by 2032. The Middle East and North Africa grew 187% over the past five years and Asia Pacific 55%.
Knight Frank projects about 1,088 schemes and more than 170,000 units by the end of 2026. More than half now sit in coastal, island or mountain destinations, and Knight Frank expects that share to reach 57% by 2028. Hotel brands account for about 70% of operating schemes but closer to 60% once the pipeline is counted, as fashion, automotive and design labels enter the market.
The United States shows both trends. Savills reports more than 140 US projects in the pipeline, with growth moderating everywhere except Florida, where it expects Miami's pipeline to grow 127%. A Knight Frank report cited by Bisnow in September counts 42 branded projects under construction in Miami, enough to more than double the existing inventory, with another 73 in planning. Nearly half carry non-hotel brands.
The premium is set at launch, and fees decide how much of it lasts
Savills puts the global average premium at 33% over comparable non-branded homes, about 30% in established and emerging cities and 39% in resort locations. Knight Frank places it between 20% and 35%. Both figures describe new-unit pricing against comparable stock at the time of sale.
That makes the premium a launch figure. HVS notes that comparability is difficult, specifications run above average and the achieved premium depends on the developer's cash needs, marketing spend and phasing. Faster sales tend to produce a lower premium, which may still yield a better return once carrying costs are counted.
The costs that come with the brand also reduce what the owner keeps. Royalty, technical, management and service fees, higher specifications and larger amenity programs all affect how much of the headline premium becomes economic value. Residents pay management and service charges every year, and those charges stay with the unit at resale. The premium also depends on the brand staying. If the management agreement ends or the brand leaves the market, the services and the name can go with it.
Residential sales now finance the hotel
Luxury hotels are expensive to build. HVS's 2026 development cost survey puts the median at $213,000 per room, with luxury projects above $1.6 million per key. At those costs, off-plan residential sales are often the fastest source of cash. Deposits paid against construction milestones bring money in long before the hotel opens, and HVS observes that a branded component can turn a marginal project into a financeable one.
Lenders have noticed. At a Bisnow hospitality conference this year, a Marriott development executive said about 90% of the hotels the company is working on in that segment include for-sale branded residences. A Viceroy executive described the residences as critical to securing a construction loan. Hoteliers on the same panel said lenders are wary of funding a new luxury hotel without the buffer of condominium sales.
The residential value is therefore part of the capital stack. If absorption slows or the achieved premium falls short, the shortfall reaches the hotel's financing, and the lender's appraisal of the residential component carries more of the credit decision than it did a decade ago.
A defensible valuation separates the real estate, the brand and the service
HVS cautioned in August that many branded projects are presented with assumptions of higher pricing, rapid absorption and strong demand that are possible but not guaranteed. The factors that matter also differ between hotel-affiliated residences, standalone branded buildings and newer lifestyle-branded concepts. A valuation that holds up for a lender or a buyer separates four things.
The real estate. What the same unit would sell for unbranded, in the same submarket, with the same view and finish. This sets the floor.
The brand contribution, measured on resales. Launch pricing shows what the developer asked. Resales of branded and unbranded units in the same submarket show what buyers paid once the sales office closed. In newer resort markets that resale record may be short or missing, and the valuation should say so.
The service and fee load. Annual dues, rental program terms and reserves, weighed against the services owners actually receive. A premium that owners pay back in dues over a decade is worth less than its headline.
The agreement. The term of the brand and management agreements, termination and renewal rights, and what owners keep if the brand leaves.
Wellness adds a fifth variable in resort projects. Knight Frank's 2026 survey describes wellness moving from an amenity to core infrastructure in branded developments. Spa, thermal and fitness programs carry their own capacity limits and staffing, and they drive both the dues owners pay and the premium buyers accept.
Underwrite the premium before capital is committed
GP Valuation & Advisory Services prepares feasibility studies, premium analyses and lender appraisals for hotel-and-residence projects, standalone branded developments and resort communities. Our work separates the real estate, the brand and the service, tests the premium against resale evidence in the submarket, and models spa and wellness programs as businesses with their own capacity and costs.
If you are planning, financing or acquiring a branded project, contact us to discuss the assignment. More on our hospitality practice is on our Hospitality & Leisure page.
