Beyond the Hotel Room: Residences as the Lead Asset Class

For decades, the branded residence was an adjunct: a tower attached to a hotel, sold to amortise land cost and underwrite the operator's keys. That model is now being inverted. According to the Savills Branded Residences Annual Report 2024–2025, the number of completed and pipeline schemes globally is projected to grow by 160% between the pre-pandemic baseline and 2031 — a trajectory that places residences, not hotels, at the centre of mixed-use feasibility.

The signals are everywhere. Aman's first standalone residences in Tokyo, atop the Mori JP Tower, dispense with an attached hotel entirely. Park Hyatt's London debut led its press cycle with the residences component rather than the hotel. Equinox's expansion into residential — including its Red Sea Global partnership at Amaala — is structured around long-term resident ownership rather than transient stays.

Behind these moves is a hard financial truth: at the ultra-prime end of the market, a serviced apartment generates more enterprise value per square metre than a hotel key. Once the brand, the operating model and the service infrastructure are in place, the marginal economics favour residential. Hotels become the amenity that supports residential pricing, not the other way around.

For developers, the implications are significant. The traditional sequencing — secure the hotel operator, then size the residential — is being replaced by a residential-first analysis. The brand selection question shifts from 'who runs the hotel?' to 'whose residential proposition will buyers pay a premium for?' These are very different questions, with very different shortlists.

Capital markets are following the same logic. Institutional investors who once required a stabilised hotel cash flow to underwrite a deal are increasingly comfortable taking residential sell-out risk, provided the brand is credible and the sales programme is professionally managed. Sell-out velocities for top-tier branded schemes — often twice as fast as comparable non-branded product — make the residential cash flow profile attractive on its own terms.

This shift also raises the bar for brand selection. When the residence is the primary revenue engine, the brand must do more than lend a name to the marketing brochure. It must shape the architecture, the service design, the amenity programme and the post-handover lifestyle. Brands that treat residences as a licensing line will struggle; those that operationalise the proposition will command the premium.

At Icon Partners, we see this reframing in nearly every new feasibility study we run. Developers who used to ask 'which hotel brand should anchor my project?' are now asking 'which brand will my buyers pay a 40% premium for, and how do I structure the hotel around that?' It is a healthier question — and one that produces better-capitalised, better-positioned schemes.

The next chapter of branded development will be written by sponsors who understand that residential is no longer the supporting act. It is the headline.