The Knight Frank Global Branded Residences Report 2023 confirms a market enjoying sustained growth despite significant recent economic turmoil. Tracking the portfolios of 15 leading luxury branded residence operators Knight Frank's report identifies 186 live schemes globally, which will be joined by 32 new schemes this year, 23 in 2024, 26 in 2025, and 22 in 2026.
The research also identifies a further 35 schemes in the pipeline with no confirmed launch date. The number of new schemes with known opening dates represents a 12% annual growth rate up to 2026 - or 55% overall over the period
to 2026.
North America accounts for nearly 40% of all projects, followed by Asia-Pacific (20%) and Europe (13%). 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. Within the US, Florida is leading the charge compared with all other states. 80% 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% and 67% respectively of their total portfolio currently in their development pipelines.
Victoria Garrett, head of residential at Knight Frank Asia-Pacific said, “Property especially prime properties and branded residences continue to be in demand. 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% on the 376 recorded in Q4 2022 and the highest volume since Q2 last year. Key hub markets such as the US, UK,Australia, Spain, and France are favoured 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 according to Knight Frank’s Destination Dubai Report.”
Christine Li, head of research at Knight Frank Asia-Pacific added: “Buoyed by a promising outlook, wealth creation propels a remarkable 28.5% surge in the global population of ultra-high-net-worth individuals (UHNWIs) from 2022 to 2027. The desire for second homes and branded residences gains momentum, fuelled 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.”
Knight Frank's research confirms this growth in supply will be matched by demand - evidenced by key wealth, travel, and property dynamics. According to Knight Frank’s latest edition of The Wealth Report, Wealth Populations, the global population of ultra-high-net-worth individuals (UHNWIs) declined by 3.8% in 2022 due to sharply higher interest rates and more challenging geopolitical conditions. However, more positive long-term trends mean that the population of UHNWIs is projected to rise by 28.5% over the five years from 2022 to 2027. The US and China will contribute significantly to wealth creation, with growth of 30% and 27% respectively. Other countries such as Canada, Australia, India, Germany, and the UK will also see substantial growth in the number of UHNWIs by 2027. At a regional level, growth will be led by Australasia, Asia, and the Middle East.
Hotel stays, a proxy for travel and mobility, dropped significantly during the Covid-19 pandemic but have been recovering steadily. Flight data highlights some regional differences, with Asia experiencing the slowest progress. However, global travel is forecast to rise 31% 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.
Future demand for second homes, including branded residences, is expected to be driven by rising affluence, increased mobility, and the desire of wealthy investors to expand their residential property portfolios. The pandemic boosted residential property demand from UHNWIs, with around 17% purchasing a new primary or second home in 2022. Despite higher interest rates, there remains healthy underlying demand with 15% of UHNWIs considering a purchase in 2023.
