Serviced apartments meet branded residences

The branded residence market is dominated by hotel brands. While attention has been drawn towards non-hospitality entrants such as automative, design and fashion, one of the fastest-growing hospitality sectors in recent years – serviced apartments – has almost gone unnoticed. 

Cheval Collection operates a serviced apartment portfolio of 11 properties spanning London and Dubai. Compared with branded residential, both sit at the intersection of hospitality and living, underpinned by long-stay demand and brand positioning. The key difference is structural: serviced apartments are an operational model while branded residences are primarily a real estate investment. 

The economics of hotel-branded residences are heavily skewed towards upfront premium sales which helps to de-risk the hotel development. With the entry of a serviced apartment brand, however, the operational story plays a more central role over the asset’s lifecycle. The balance between upfront value and long-term income is materially different, with serviced apartments traditionally delivering a lower ADR ceiling due to longer lengths of stay, but which translates into a smoother performance curve. It shifts the investment mindset away from brand pricing power to the credibility of sustained rental income.

For developers, these metrics will inform asset value and buyer appetite. For Cheval, the real test will be whether its operational model will translate into sufficient absorption speed. The success of branded residences can be measured by the dual benchmark of pricing premiums at launch and the long-term sustainability of service charge. It raises an important question for hoteliers where, if serviced apartment operators demonstrate resilient fundamentals, it could recalibrate what drives value in the branded resi sector. 

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