The pandemic may have caused immediate and dramatic shifts to our day-to-day lifestyle, but for most consumers and property buyers, this hasn’t led to major changes in taste, said panelists on Day 3 of Mansion Global’s inaugural Luxury Real Estate Conference on Thursday.
Instead, buyers are drilling down to basics, focusing on amenities like location, quality and comfort from already-trusted luxury brands.
“In times of uncertainty, we tend to find people gravitating toward brands they know, trust and have confidence in,” said Paul White, senior vice president of residential development, marketing and sales for Four Seasons Hotels and Resorts. “This year, we’ve seen a lot of people in the luxury space have a flight toward quality. They want a service-rich environment, a safe place they feel protected and taken care of.”
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And this pull toward name recognition and a proven track record may mean that a smaller number of brands start taking up a larger share of the marketplace.
“The tendency toward buying less but buying better has meant smaller guys are losing share to bigger guys,” said Erwan Rambourg, managing director and global head of consumer and retail equity research at HSBC. “You’re cutting down on the number of brands you’re looking at.”
Below, more insights from Thursday’s sessions on lifestyle real estate, including why the dining room may now be the most important room in the house.
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High-Quality, Classic Features Will Always Win Out
Though developers and designers have their work cut out for them catering to an increasingly discerning luxury market, there’s no need to reinvent the wheel.
“I think that the key to wellness at home is comfort—a comfy chair, a comfy sofa, the basics,” said designer Jonathan Adler of Jonathan Adler Enterprises. “The one thing that has really changed during the pandemic is that people are more aware of their environment. People are trying to perfect every inch of their homes now.”
Quality lighting and cleared-up clutter do far more for a space than high-tech gadgetry, Mr. Adler added, noting, “The No. 1 complaint about tech from all of my clients is that it’s actually gotten too complicated. They want to know where everything is, and how it works.”
These preferences are reflected in the architecture realm, as well, with the enduring popularity of quality, old-school designs over impersonal glassy new towers.
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“As a resident or prospective purchaser, you want to be able to identify with a building and say, ‘This is where I really want to live,’” said Robert A.M. Stern Architects founder and senior partner Robert A.M. Stern. “Many of the recent buildings in New York, Dallas, and elsewhere are big glass buildings that seem to suggest office buildings, not residential settings. People want some place you go to live, not do a repetitive office job.”
The pull toward established brands has also translated to strong performance for certain branded developments.
“We’ve seen a lot of interest because they know it’s backed up by the credibility of a five-star luxury hotel brand,” said Adelina Wong Ettelson, head of residences marketing for Mandarin Oriental. “It helps with the knowledge of safety, security and discretion that comes along with that.”
Don’t Underestimate the Dining Room Table
Many families stuck at home have spent the past six months scrambling to create office spaces and study rooms, and in many cases, have discovered the full functionality and versatility of the formerly unfashionable dining room.
“The open-floor plan thrived before the pandemic because a lot of people were not cooking in those kitchens or eating at those dining tables,” Mr. Stern said. “You might say ‘I only use it at Thanksgiving,’ but a dining room serves as a study hall for children. I’ve been fighting for dining rooms my whole professional career.”
Rather than traditional offices with a large wooden desk and heavy-duty shelving, “What I’m seeing is a lot of people who are using sort of improvised desks,” Mr. Adler said. “Right now, I’m speaking from my dining room table. The world is a little more casual now, the dining room or the kitchen table is kind of the hub of the home.”
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The workhorse nature of a traditional dining room also speaks to the importance of thoughtful flow and layout rather than cookie cutter design.
“When you open the door to the apartment, it’s all about sequence, it’s all about orchestration of space,” Mr. Stern said. “Many plans I examine are not conceived of with any particular relationship to sequence. They’re just so much real estate packed into a box.”
“The apartment units themselves need to flow,” Mr. Stern added. “They need to unfold like a wonderful piece of music, not a cacophany.”
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Consumers Expect Accountability
As much as luxury buyers are willing to spend on privacy, services, and quality, they also hold brands to increasingly high standards, and companies that expect to compete need to step up their practices accordingly.
“The younger generation is asking questions that people who bought luxury 10 to 15 years ago were not asking,” Mr. Rambourg said. “[They want to know your] values around societal issues like Black Lives Matter. And how did you actually produce this good, and what are you doing to expand the life cycle of the product?”
“There are very key characteristics that are important, such as sustainability, authenticity, transparency,” added Oliver Chen, managing director and senior equity research analyst for retail and luxury at Cowen Inc. “We’re seeing a customer that votes with their dollar, and they want to be buying from companies that represent their values. Customers and companies need to think about their values—it’s important to make a statement.”
For similar reasons, buyers may instinctively gravitate toward buildings that fit well into the ecosystem of their city or neighborhood.
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“These new glass buildings, they have such a poor relationship to the street,” Mr. Stern said. “They don’t contribute to the life of the street, they can’t effectively deal with shops, you’re not invited in to take a peek for signs of life.”
Once they do find a product that meets their rigorous standards, one thing seems clear: Luxury consumers are still more than willing to spend. “Even though traditional activity has slowed from a sales perspective, we’re starting to see areas that are increasing in price and demand,” Mr. White said. “Unlike 2008 or 2009, the fundamentals of real estate still remain fairly strong.”
“You just have to make a good environment, and people will find it,” Mr. Stern said.
To view sessions from this week’s Mansion Global real estate conference covering residential real estate, commercial real estate, and luxury lifestyle, visit mansionglobal.com/conference.
