Luxury brands have been building high-end residences for years. But amidst a mass housing shortage, brands are now building more affordable living spaces that come with an array of retail opportunities.

Branded real estate is nothing new. Luxury brands have spent the last decade making their mark on the real estate market, with names from Bulgari to Aston Martin translating their unique design language into home interiors and reputation for service into 24-hour concierges. According to estate agents Savills, branded residences’ now account for 65,000 homes around the world. 

Hoteliers have been particularly well-placed to offer their hospitality expertise in residential form. When Hong Kongs Peninsula Hotel makes its London debut in Belgravia in 2022, it will offer up to 28 residential apartments managed by the hotel, in addition to numerous retail units.

But with these residences targeting ultra-high-net-worth-individuals, there remains the problem of global housing shortages, particularly in large metropolises. Recent census data shows that the New York borough of Brooklyn added 78,300 new housing units between 2010 and 2020, while during that time, the population grew by 230,000. Meanwhile in London, a new report by the G15 Group estimates that city officials must more than double the number of homes being built – to 100,000 a year – in order to tackle the housing crisis. 

With local governments struggling to make up these numbers, and retailers navigating an increasingly desolate high street, we could be entering the age of branded social housing, in which companies commit to affordable schemes as part of their CSR efforts.

La Samaritaine, an LVMH Group-owned Art Nouveau and Art Deco landmark, incorporates 20,000 sq-m of retail space, ten restaurants, a hotel, offices, crèche, housing complex and 10,000 sq-m of reclassified streets and sidewalks. 

Pandemic-hit high streets

COVID-19 has fundamentally remodelled the way people shop, wreaking havoc on the high street as we know it. One in seven storefronts now sit vacant across the UK, with shopping malls and fashion stores among the hardest hit, according to research from the British Retail Consortium.

The situation is particularly chronic in the US – Green Street Advisors predicts that more than 50 per cent of mall-based department stores to permanently close by the end of 2021, leaving thousands of empty properties waiting to be repurposed. As developers eye up these lucrative spaces, there’s the opportunity for retailers themselves to head up development projects. Not only does this create a new revenue stream for a sector that has been hugely impacted by the pandemic, but it offers the chance for brands to leverage their social purpose and put their assets to civic use. 

John Lewis is one retailer already making such a commitment. Ranging from studio flats to four-bedroom houses, approximately 10,000 John Lewis homes will be built over the next decade, utilizing empty sites that neighbour its car parks, distribution centres and Waitrose supermarkets.  

As we repurpose and potentially reduce our shop estate, we want to put excess space to good social use,’ says Sharon White, chairman at John Lewis. We are exploring with third parties the concept of new mixed-use affordable housing.’ The retailer is investing heavily in the scheme; in March, John Lewis announced that it expects 40 per cent of its profits to come from non-retail activity by 2030.

Cover and above: Chapter One by WGNB is designed to ‘adapt to a frequently changing display’ of merchandise. Photos: Yongjoon Choi

Hybrid home stores

As more retailers dedicate space to housing in their store plans, were likely to see new hybrid concepts that merge the home with the traditional retail space. This concept could allow architects to design new store experiences built for communal floors in apartment blocks or even branded neighbourhoods.

In Paris, the long-awaited renovation of La Samaritaine has overshadowed the citys luxury retail market since its doors opened in June 2021. Most notably, the LVMH-owned space is reinventing the purpose of Paris’ renowned department stores, adding 96 social housing units alongside offices, a luxury hotel and nursery to its complex of five buildings.

SANAA, the architects behind the renovation, believed the project should function more like a neighbourhood rather than a single building. The resulting cluster of spaces is connected by a street-level promenade, mimicking the infrastructure of a small village. 

While currently the department store exists separately to the social housing block, in the future we could see retailers create micro-stores for their residents. Take Chapter One, a multi-brand lifestyle store located in Seouls Nine One Hannam gated community, as an example. Its fashion and furniture merchandise is able to adapt to the changing needs of the residents. While the residential apartment complex in which the store is located is highly luxurious – and home to several Korean public figures and celebrities – its easy to envision how the concept could be replicated for a new wave of branded affordable housing.

Shelter for all

As we enter a future in which people shop with their values, and a brands’ ethics are a central pillar of their identity, investment in social housing will become more vital for those with abundant space or budgets. Airbnb recognized this when it recently opened its short and long-stay homes to 20,000 Afghan refugees, following the Talibans takeover of the country. 

Offering fair housing could be a critical way for a brand to look after their own employees too, especially families who may struggle to afford hiked-up metropolitan rents. E-commerce mammoth Amazon has been building campuses for its staff, the most recent of which is in the affordable and nature-infused city of Arlington, Virginia. Plans for its HQ2 project will include an 18-hour neighbourhood’ outside its offices, filled with food trucks, green spaces and a retail plaza. Considering Amazon employs nearly one in every 169 workers in the US, looking after their physiological need for shelter allows the brand to become a de facto guardian.

Ultimately, retailers will be expected to consider their role in the housing shortage crisis as they expand in size and influence. From studio flats above Waitrose to an entire branded village designed for the localized needs of employees, the real estate market of tomorrow will come with plenty of opportunities for retail designers, as the high street becomes less of an isolated entity and further integrated into our residences.