The global market for branded residences is continuing to expand, with brands looking for new locations to grow their portfolios. Affluent, globally mobile individuals will continue to drive demand for branded residences. Developers and brands are identifying the hotspots of HNWI growth to enhance their offer. Over the past five years, the highest growth rates in terms of number of HNWI were noted in North America (53%), followed by the Middle East (34%) and Asia Pacific (31%). This is in line with our observations with regards to the strongest increase of branded residence stock over the same period (27% in North America, 86% in the Middle East and 48% in Asia Pacific), with the highest rates noted in the regions where growth starts from a lower base.

According to Oxford Economics forecasts, the highest growth in terms of number of high-income households over the next five years is projected in the Americas, Asia Pacific, the Middle East and European regions. In these locations, we expect some of the new high-net-worth buyers to be looking for primary residences and second homes in branded schemes. We expect the future hotspots to include some of the cities that are going to see a strong rise in wealth, such as Jakarta, Ho Chi Minh City, Beijing, and Shanghai.

We expect demand for the branded residence product to remain strong in key world cities (London, New York, Los Angeles), which are business and education hubs and offer great lifestyle, cultural attractions and unique experiences for prospective buyers and their families, as well as opportunity for investment. This demand may be partly domestic, as mobile customers value a seamless, reliable management of their properties, but we believe that it will be mainly underpinned by the growing HNWIs community globally and their aspiration to spend time in multiple destinations.

Domestic demand for luxury branded residences is likely to grow faster in emerging markets (where the base point is low), such as Ho Chi Minh City, Cairo, São Paulo, Istanbul, where the quality of the existing stock is unlikely to meet the requirements for high-quality fit-out and services by new HNWIs. In these markets, there will be opportunities for urban upscale product as well as luxury product for brand-loyal, well-travelled customers.

Demand from international buyers is also likely to grow in accessible resort destinations to support demand from major cities with high concentration of wealth. As highlighted in our latest Global Destinations for Second Homes report, we believe that demand for second homes in accessible destinations around global gateway cities is expected to be driven by flexible working and wellness. This could also fuel upscale urban product (apartments) in destinations such as Verbier, Sanya, Palm Springs, and the Algarve, as well as luxury product in more remote, unique destinations such as the Seychelles, Cap Ferret, Bali, and Phuket.

After a number of years of evolution, the branded residences sector has proven resilient and adaptable to adverse market conditions, offering security and reliable quality to buyers and attractive returns to developers and brands. With a robust and geographically diverse pipeline, as well as the continued commitment to the sector from developers and brands, the sector is set to continue to expand in the near term.

_{Read the articles within Spotlight: Branded Residences below.}

Further information

Global Residential Development Consultancy