Luxury in the Mexican Riviera

For the globetrotting elite, branded residences bring trust and transparency to far-flung destinations

Eighty minutes north of Puerto Vallarta, a circuitous road branches off the highway and passes through green and yellow pineapple fields. The road continues, ascending a lush escarpment and circumventing the knotty roots of copperwood trees before reaching the crescent-shaped rim of what was once a volcano. Here, the road ends, the view widens, and the terrain drops into an endless blue Pacific.

The best spots on the planet usually take time to reach; not all of them succeed in transporting you to a different era. Nestled at the foothills of the Sierra Mountains on Mexico’s Pacific Coast, this land, with its petroglyphs and pre-Hispanic relics, feels preserved from a former age, long before pavement or strip malls or touchscreens came about.

But, of course, the new road is here for a reason, and looking closely at the hillside, occasional gaps in the jungle canopy reveal the wooden bones of buildings currently under construction. The oceanfront parcel, with its two verdant hills, lagoon and mile-long beach will soon be home to One&Only Mandarina, a luxury resort and the brand’s first foray into private residences.

“It has always been our approach to identify unique sites in amazing locations and go to places where we can be the first ones in the ultra luxury phase,” says Mr. Philippe Zuber, president and CEO at One&Only Resorts. The brand has become known for lavish properties in off-the-beaten path locations like Mauritius and Rwanda, and moving forward, Mr. Zuber says, it’s important that “guests have the opportunity to buy a home.”

There will be 55 villas available for purchase at Mandarina, which is being developed by Mexico’s RLH Properties, with four-, five- and eight-bedroom floor plans that range from 5,000 to nearly 11,000sq ft.

Arizona-based architect Mr. Rick Joy, best known for his work on the Amangiri resort in Utah, has positioned each villa in response to its location along the parcel’s southern peak, maximizing ocean and mountain views and tucking larger volumes into the hillside.

“Rick is very close to nature. He straightaway understood the topography of the site and his approach was to embrace nature rather than fight it,” says Mr. Zuber. The interiors, which come fully furnished, feature an understated palette of custom woodwork, stone accents and textural warmth — Rick Joy used local sand and soil to mix his paint colors — all set against a verdant jungle backdrop.

Since launching last year, 18 of Mandarina’s homes have sold with prices ranging from US$5 million to US$10 million. Buyers have included moneyed Mexicans, Canadians and several Silicon Valley billionaires (George Boutros bought two villas) and professional athletes. San Francisco Giants pitcher Mark Melancon’s customized eight-bedroom 19,000-sq-ft home will include a gym, a casino and game room, two hot tubs and an infinity pool.

But inquiries are also coming from further afield. Mr. J. P. Mahony, Mandarina’s Director of Sales, has sold real estate around Puerto Vallarta for years, but says this is the first time prospective buyers from Hong Kong and Taipei have contacted him, a fact he attributes to the draw of One&Only. “The power of the brand has definitely gotten us ahead in sales,” Mr. Mahony says. “I have never seen product at this price point move as quickly as I have in the last year and a half. And nothing is even built yet.”

Branded residences have been around for more than a century, but the sector has only really taken off in the past two decades, expanding alongside a growing globally mobile, high-net-worth population. The majority of branded residences are currently located in the US (32 percent), but an increasing number are being built in places such as China, Indonesia, the UAE and Mexico, as brand-conscious buyers seek out quality design, security and service.

And according to research from Savills, buyers of branded residences, many of them cash-rich and time-poor, are willing to pay a premium to get what they want — anywhere from a 30 percent premium in a city such as New York or London to an 80 percent premium in less tested emerging markets such as Thailand or Kazakhstan.

“Typically, the more mature and sophisticated the market the lower the brand premium,” explains Mr. Alexandros Moulas, co-head of international development consultancy at Savills in London. “This is simply because developers are more sophisticated and buyers more familiar and educated with the market.”

A global brand can offer guidance on purchasing real estate in an unfamiliar country with unfamiliar tax laws and regulations. And for those buying something that is still under construction, it instills confidence that the developer will deliver a completed product. And, of course, buyers expect exceptional amenities and services that come at this price point.

At One&Only Mandarina, amenities are set to include beach clubs and cliff-side lounges, a kids club with tree houses and a butterfly sanctuary, a spa with open-air treatment rooms, a farm growing seasonal ingredients, and the Mandarina Polo & Equestrian Club, complete with two tournament-sized fields. On the northern peak, beside the estuary and lagoon, the future Rosewood Mandarina will also offer a host of amenities available to One&Only residents.

But Mr. Zuber says the level of service will ultimately shape the One&Only resident experience. “Connection to brand will be through our people,” he says. “Our butler service, quality of recognition, remembering guest preferences, and the ability to make a vacation extremely simple.

Currently, the majority of branded residences are managed by hotels, but some properties, such as the upcoming Mandarin Oriental Residences in New York, which will offer 69 pied-àterre– style residences, and the Residences by Mandarin Oriental in Barcelona, with 34 apartments, are starting to forego the hotel component. And brands beyond hotels have also started attaching their names to developments, from Fendi to Bacarrat to Bvlgari. In the future, Mr. Moulas believes this list will only expand. “My personal view is that any brand with a loyal and large customer base could potentially enter the sector, for example, Apple, Samsung, Louis Vuitton.”

One&Only Mandarina’s hotel component is set to open in 2020 with 108 ocean-view rooms. And the low-density master plan aims to retain the site’s “untouched” feeling, although the project and nearby beach towns of Sayulita and San Pancho will soon be easier to reach. A new highway under construction (funded by billionaire Carlos Slim) is set to bring the journey from Puerto Vallerta airport down to just 30 minutes.

As the brand adds private homes to its other resort properties, such as Kea Island in Greece and Malaysia’s Desaru Coast, buyers at One&Only Mandarina will also be able to arrange home swaps with owners in other locations. “Our private homeowners will be a very exclusive group,” says Mr. Zuber. “They’ll develop a unique community and we well help them to create a platform to exchange usage of the home if they wish.” Another draw of branded residences, of course, is knowing who your neighbors will be – and with hotel rates that start at US $1,260 a night, One&Only Mandarina is sure to keep the rabble out.

This story appears in the July print issue of Portfolio magazine