The number of branded residences is predicted to grow by 55%, globally, over the next three years, according to research by Knight Frank.
An increase in the number of High Net Worth (HNWI) and Ultra High Net Worth (UHNWI) individuals is said to be behind the trend.
Australia is home to just one branded residence under development. STH BNK, by
Beulah development, in Melbourne, is to be managed by the preeminent hotel brand, Four Seasons.
Crown Residences at One Barangaroo, Sydney, is the only completed branded residence in Australia.
Knight Frank’s The Wealth Report 2023, predicts Australia will be home to over 3.5 million HNWIs, and 24,589 UHNWIs by 2027.
“We expect to see more branded residences entering the Australian market in the future, and we know they will generate significant interest and sales.”
Erin van Tuil, head of residential in Australia, Knight Frank
Rising affluence and mobility are believed to be drivers of the global trend, with wealthy investors showing a healthy appetite for residential property investments.
17% of UHNWIs purchased a new primary or second home in 2022, driving strong residential price growth, particularly for high-end properties.
Dubai sold the most US$10 million+ homes in Q1, 2023, and Q4, 2022, according to Knight Frank. Sales of high-end homes in the Middle Eastern city have been very strong overall, 307 US$10 million+ homes have sold there since the beginning of 2022.
The biggest market for branded residence schemes is the United States of America; nearly 40% of all branded development projects underway are located in the USA, with Florida being the most popular state for high-net-worth hideaways.
There are 106 luxury branded residence schemes underway in the US, by far the most compared to Mexico, with 19 underway, and the UAE, with 15.
Getting back to Australia, many real estate experts are predicting that the Gold Coast may offer the best market for luxury branded residences in Australia.
This is down to similarities with resort-style offerings in Florida such as abundant sunshine and a coastal, beach-oriented lifestyle in the two locations.
“A branded residence provides owner-occupiers with the assurance of best-in-class delivery and long-term service benefits that come with a world-class hotel brand.”
Erin van Tuil, head of residential in Australia, Knight Frank
Two such branded developments in the USA are The Residences at Shell Bay by Auberge Resorts Collection and The Shore Club Private Collection, both located in Miami.
These residences are characterised by exclusive lifestyle facilities designed by well-renowned sports stars, such as a golf course designed by Greg Norman, and top architects. Both communities are fully gated, adding to the appeal for those who value their privacy.
“The Shore Club Private Collection is a limited collection of 49 curated homes designed by award-winning architect Robert A.M. Stern.
“The property will have the services of a five-star Auberge Resorts Collection Resort and the resort is designed by Brian O’Sullivan, the designer behind The Connaught and Claridges.”
Alex Witkoff, co-chief executive officer, Witkoff
In terms of which luxury brands are dipping their toes into high-end real estate offerings, it can be expected that most are well-known hotel and resort names, such as the Ritz-Carlton and Four Seasons.
But Dubai, in particular, is leading the charge in providing luxury brand enthusiasts with real estate serviced by their favourite peak fashion and car brands, such as Bulgari, Versace, and Lamborghini.
“Historically, the market consisted of luxury hotel brands, which are the most relevant to residential living.
“Now, everyone is jumping on the bandwagon, and it is getting harder to establish the point of difference.”
Adelina Wong Ettelson, global head of residences marketing, Mandarin Oriental Hotel Group
The main takeaway for developers of branded residences is where to focus their efforts.
In the pursuit of high-net-worth individuals and the purchasing power required to actually acquire high-value branded properties, the US and China stand out as the most important markets.
The Knight Frank report predicts the number of UHNWIs, worth over US$30 million each, is set to grow by over 50,000 in the US and by almost 44,000 in China in the next 4 years.
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