Australia could soon see more branded residences popping up, with developments featuring the likes of the Ritz-Carlton and Four Seasons brands predicted to grow across the country.
According to Knight Frank’s Global Branded Residences Report 2023, Sydney and the Gold Coast will likely be the main focus for branded residences, despite the fact that there are currently only two fully integrated branded residence developments in Australia to date.
The report predicts that worldwide growth in branded residences will increase 55 per cent by 2026, with growth in the Asia-Pacific region, which includes Australia, to account for 20 per cent of all projects.
Knight Frank Head of Residential in Australia Erin van Tuil said there was currently only one fully integrated branded residence development under construction in Australia – with Four Seasons set to manage the hotel within the new STH BNK by Beulah development in Melbourne – and one completed project in Sydney, being Crown Residences at One Barangaroo.
However, many developers and brands are currently actively exploring the option.
“Amid a shortage of new prime stock in Australia, buyer demand for branded residences in our country is strong, with the success of Crown’s One Barangaroo development evidence of that,” Ms van Tuil said.
“We expect to see more branded residences entering the Australian market in the future, and we know they will generate significant interest and sales.
Ms van Tuil said there was a myth in the market that offshore buyers would make up the biggest pool of purchasers for these homes, and while Australia is a favoured destination for second home purchases, the depth of the market is much greater than that.
“There are plenty of domestic buyers, particularly Sydneysiders, who are looking for a branded residence to purchase, but there just aren’t any options in the market outside of One Barangaroo,” she said.
“There is also strong demand for branded residences on the Gold Coast – branded residences are all about lifestyle and the Gold Coast is a true lifestyle destination.”
According to the report, North America accounts for nearly 40 per cent of all projects, followed by Asia-Pacific (20 per cent) – which includes Australia – and Europe (13 per cent).
The schemes are located across 52 countries, dominated by the US (106 schemes), and with Mexico, the UAE, Thailand, the UK and China all with double-digit numbers of schemes.
In terms of brands, Ritz-Carlton leads with the highest number of schemes, followed by Four Seasons, however, based on the 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.
While there was no formal definition, a branded residence was generally recognised as a residential property associated with an established brand, such as a hotel operator.
The population of ultra-high-net-worth individuals (UHNWIs) is also projected to rise by 28.5 per cent over the five years from 2022 to 2027, with Australia one of the countries set to see substantial growth by 2027, according to Knight Frank’s recently-released The Wealth Report 2023.
Knight Frank Director Residential Project Sales in Queensland Alison Hedger said the Gold Coast was a well-positioned opportunity for developers to consider best-in-class super-prime luxury branded residences as seen in established key hubs around the world.
“Within the Australian property landscape we are experiencing strong interest from key players in the branded residence space for prime sites in south-east Queensland, including the Gold Coast and Brisbane,” Ms Hedger said.
“The value proposition of these sites, wealth migration and forecast annual growth of 3 per cent for prime residential property on the Gold Coast over the next three years proves there is a strong case for investment in branded residences.
“For a developer to deliver a luxury branded residence project on the Gold Coast would be a landmark legacy, and we firmly believe it would be extremely successful from a sales perspective.
Ms Hedger said the strong demand for these projects is evident, with high enquiry for prime property on the Gold Coast, including penthouse and prime waterfront residential offerings with high-end amenity, from high-net-worth individuals and ultra-high-net-worth individuals.
“The Gold Coast has come of age in the prime residential space, transitioning to an owner-occupier, rightsizing destination with demand for luxury apartments with considered and market-leading lifestyle amenity.
“Comparisons are often drawn between the Gold Coast in Australia and Miami in the US, given the ‘sun’ resort factors, and within the US, which has the largest number of branded residences schemes globally, Florida is leading the charge, with 80 per cent of Florida’s schemes found in Miami.
Ms van Tuil said 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.
She said for branded residences to be successful in terms of increased saleability and an uplift in prices, more was required than a developer just putting a brand name on their project.
“The project needs to be in the best location, built to the highest specifications and the brand needs to have strong recognition from buyers so they have certainty about what they are purchasing,” she said.
“What is most appealing to buyers is service rather than amenity – it’s not just about having access to the pool and gym, but the most desirable value-add is the service offering led by 24-hour hotel concierge from professional hotel staff.
“It gives residents of these developments service at their fingertips, and that combined with the convenience and lifestyle of these well-located projects, as well as good architecture and interior design, makes them hugely popular.”
