Egypt, 4th largest pipeline of branded residences globally

• New lifestyle brands enter the sector with Condé Nast revealing plans to move into the branded residential marketplace
• Average price premium for branded residences over non-branded stands at 35%
• Branded Residences, key to achieving Egypt’s Ministry of Housing USD 4 billion of real estate exports target within 3 years
• Dubai set to topple New York as the global capital of branded residences

Cairo, Egypt: Savills, the Middle East’s leading real estate services provider, reported that the branded residences sector has seen phenomenal growth and there is no sign of it slowing.

According to Savills Branded Residences Report, the number of branded schemes has grown by 195% in the last decade and there are more than 430 branded schemes globally with a combined total of 65,000 units. A record number of schemes opened this year, with 60 projects delivering more than 9,000 additional branded units across 21 countries. This record is set to be broken again in 2020 when nearly 70 schemes are due to complete.

This growth is being driven by the hoteliers with hotel-branded schemes accounting for 86% of the completed schemes and 96% of the pipeline supply. Marriot International, whose brands include Ritz Carlton, St Regis and W, is the market leader and is set to remain so. However Accor is rising fast and has a pipeline equal to Marriott International.

In the Middle East, Emaar Hospitality Group is growing fast with an extensive pipeline across the UAE and wider Middle East under its Address and Vida brands. According to Savills’ research, in the same region, Egypt and the UAE account for most of the forthcoming supply (21%). Egypt currently has 2 branded residence schemes with 14 in the pipeline making the country the fourth largest pipeline, behind the USA, UAE and Mexico.

Catesby Langer-Paget, Head of Egypt – Savills said: “Earlier this year the Ministry of Housing in Egypt announced their aim to achieve USD 4 billion of real estate exports within three years and branded residences were mentioned as a key avenue to achieving this by providing a product that appeals to the international investor. Judging by the number of branded residence schemes in the pipeline it is clear that the wider market agrees and we expect this trend to continue going forward with a number of additional branded residence schemes to be launched in 2020. Savills has fantastic experience of branded residence schemes from around the world and is well placed to advise on these and identify the appropriate operator and target audience.”

The biggest players in 2024 – forecast based on completed & announced pipeline schemes

 Source: Savills Research & Savills International Development Consultancy

Last year, Savills predicted that new lifestyle, non-hotel brands, outside the realm of what has been seen to date, would enter the sector. The prediction has played out with Condé Nast announcing its plans to move into the branded residences marketplace. Whilst the company is best known for its magazines, Condé Nast expanded into hospitality in 2003 with Vogue Cafés and GQ Bars, making residences a natural progression for the global media brand.

The birthplace of branded residences, North America is home to 40% of all schemes however other regions are growing rapidly. Asia Pacific, led by Thailand and Vietnam, currently has the most schemes in planning and under construction (23% of pipeline), followed by MENA (21% of pipeline). Latin America is a major growth market. The number of schemes in Mexico are set to more than double in the coming years as new projects are set to open in both resort and city locations.

At a city level, coinciding with Expo 2020, Dubai is set to overtake New York as the global branded residences capital by the end of 2019, thanks to a pipeline equal to its current supply of just over 20 schemes. Miami has the third largest number of schemes and will retain its position. In Asia, Phuket is forecast to overtake Bangkok where there a large number of smaller resort schemes in the pipeline.

Paul Tostevin, Director, Savills World Research, said, “As market conditions and buyer preferences evolve, there is huge potential for the branded residences sector. Branded property is positioned to stand out in more challenging market conditions.”

Savills analysis shows that the average premium for branded residences over equivalent non-branded product, stands at 35%. This varies significantly by location, brand and operator. In emerging cities, such as Kuala Lumpur, the premium can exceed 70%. On the flipside, in the more mature markets where location is a greater determinant of value, premiums can be lower.

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About Savills

Savills is a global real estate services provider listed on the London Stock Exchange. Savills operates from over 600 owned and associate offices, employing more than 35,000 people in over 60 countries throughout the Americas, the UK, Europe, Asia Pacific, Africa and the Middle East, offering a broad range of specialist advisory, management and transactional services to clients all over the world.

For further information, please contact: www.savills.com.eg 

Toh PR / +971 (0)4 382 8900 / savills@tohpr.com 

© Press Release 2019