As of 2022, 60 per cent of all global branded residential schemes are located in urban and urban resort locations. Developing in urbanised areas presents all the usual challenges one would expect such as stringent zoning and planning regulations and more expensive resources. Nonetheless, these hubs of human activity also present numerous opportunities for residents and developers alike.

Crucially, urban areas are more densely populated than resort locations and benefit from higher occupancy rates and increased ROI as a result. In turn, these tend to be the wealthiest areas of a country and are increasingly perceived by HNW and UHNW individuals as a safe haven for their monetary investment. This has helped drive urban development in recent years.

The relative growth in the number of HNW individuals will be a huge focus for the branded residential pipeline in the coming years. In particular, developers should seek locations where supply is currently low. Indonesia and India, for example, have two of the fastest growing HNW communities, whilst having a very limited supply of ultra-luxury real estate.

As the quality demanded by purchasers is ever increasing, developers of branded residences must strive to maintain price premiums above the local market. In general, when the standard of local non-branded stock is high, the premium achievable for branded units reduces. For example, the average price premium seen for branded residences in global cities is 24 per cent, markedly lower than resort locations and emerging cities at 32 per cent and 54 per cent respectively. In an ever more crowded market, it will be essential for developers to focus on differentiation tactics and strategies to ensure they stand out and have strong buyer resonance.

This considered, developers may seek to purchase and occupy outstanding sites in prime locations within cities. However, one of the main challenges at present is the scarcity of this type of land. Furthermore, these sites will be priced according to their rarity and therefore, costs are increased from the outset. Nonetheless, sites in prime locations will benefit from reputation as well as high quality amenities. While greater investment may be required initially, this will usually be rewarded with higher exit prices as well.

Further information

Contact Charlotte Williams