Real Estate
Never Mind Uncertainties, The Luxury Branded Residences Sector Is Doing Fine – Study

An expected rise in the number of ultra-wealthy individuals – despite some recent declines – is likely to keep this sector of "branded residences" in fine fettle, the property consultancy says.
The “luxury branded residences” sector in places such as New
York appears to be prospering, riding above the waves of
economic uncertainties, according to a report by real estate
consultancy Knight
Frank. Asian investors are among those driving the trend, it
said.
The firm said it has identified 186 live schemes globally, which
will be joined by 32 new schemes in 2023, 23 in 2024, 26 in 2025,
and 22 in 2026. North America accounts for nearly 40 per cent of
all projects, followed by Asia-Pacific (20 per cent) and Europe
(13 per cent).
The report, giving a sense of where HNW and UHNW individuals
spend, invest and live, is called The Knight Frank
Global Branded Residences Report 2023.
Knight Frank said it has identified a further 35 schemes in the
pipeline with no confirmed launch date. The number of new schemes
with known opening dates represents a 12 per cent annual growth
rate up to 2026 – or 55 per cent overall over the period to
2026.
Within the US, Florida – which has drawn an influx of people
seeking lower taxes and higher growth – is leading the charge
compared with all other states. Some 80 per cent of Florida’s
schemes are found in Miami. In terms of brands, Ritz-Carlton
leads with the highest number of schemes, followed by Four
Seasons. In terms of rate of growth, Aman and Six Senses lead
with 68 per cent and 67 per cent respectively of their total
portfolio currently in their development pipelines.
“According to Knight Frank’s recent edition of the Global
Super-Prime Intelligence report, global sales of prime and
super-prime properties have rebounded in Q1 2023, with 417 sales
across the 12 markets, up 11 per cent on the 376 recorded in
Q4 2022 and the highest volume since Q2 last year,” Victoria
Garrett, head of residential at Knight Frank Asia-Pacific,
said.
“Key hub markets such as the US, UK, Australia, Spain, and France
are favored destinations for second home purchases globally and
among Asian investors as well. For East Asian buyers from
Singapore, Hong Kong and Mainland China, Dubai also serves as a
very attractive option for both branded residences and luxury
homes,” Garrett continued.
Christine Li, head of research at Knight Frank Asia-Pacific,
added: "Buoyed by a promising outlook, wealth creation propels a
remarkable 28.5 per cent surge in the global population of
ultra-high net worth individuals from 2022 to 2027. The desire
for second homes and branded residences gains momentum, fueled by
increasing affluence, greater mobility, and the discerning
preferences of savvy investors. Within this landscape, the
Asia-Pacific region assumes a prominent position, defining a new
era of opulence and exclusivity in the global real estate
market."
Growth in the ranks of UHNW individuals is a driver of the
branded properties trend. The population of this segment is
expected to rise by 28.5 per cent in the five years of 2022 to
2027, although last year, the number fell 3.8 per cent as
financial markets fell.
Global travel is forecast to rise 31 per cent above pre-pandemic
levels by 2027, with significant growth in Africa, the Middle
East and Asia. Asia dominates in terms of expected future growth,
but Europe and North America also offer opportunities with
increased mobility, the report said.
The pandemic boosted residential property demand from UHNW
individuals, with around 17 per cent purchasing a new primary or
second home in 2022. Despite higher interest rates, there remains
healthy underlying demand with 15 per cent of UHNW individuals
considering a purchase in 2023.
While the report takes an upbeat tone, rising interest rates after a long period of ultra-low rates, and the disruptions caused by the pandemic, mean that the real estate market has not been all plain sailing. In its report in May, Knight Frank said that its Prime Global Cities Index (PGCI), which tracks prices in 46 leading prime markets, fell by 0.4 per cent during the 12 months through March. That's the first annual contraction since the Global Financial Crisis. Annual growth rose to a peak of 10.1 per cent during 2021 before central banks raised rates to curb inflation. Prices are now falling in 16 of Knight Frank's 46 markets, it said.
Asian favourites
The report said that Asian investors, for example, liked projects
such as Towers of The Waldorf Astoria; Mandarin Oriental (main
picture): Mandarin Oriental Residences, Fifth Avenue; The
Whiteley London, and The OWO, London (below).