The Knight Frank Global Branded Residences Report 2023 reveals the thriving luxury real estate market, with 186 ongoing projects worldwide and an additional 32 new projects expected this year. Despite ongoing economic challenges, the sector is projected to grow by 55% by 2026. North America leads with nearly 40% of all projects, followed by Asia-Pacific and Europe. Leading brands include Ritz-Carlton and Four Seasons, while Aman and Six Senses show the most vigorous growth. The report highlights sustained demand for branded residences, driven by increased wealth and rebounding global sales of prime properties.
Despite ongoing economic challenges, the luxury real estate market remains on a robust growth trajectory, as revealed in the Knight Frank Global Branded Residences Report 2023. This report, which studied the portfolio of 15 premier branded residence operators, discloses the existence of 186 ongoing projects worldwide. Furthermore, 32 new projects will materialize this year, followed by 23, 26, and 22 in subsequent years through 2026.
In addition to these, the pipeline hosts 35 more schemes waiting for their official launch dates. New projects with established opening dates signify an annual growth rate of 12% leading up to 2026, marking an overall growth of 55% within this period.
Geographically, North America leads with nearly 40% of all projects. Asia-Pacific and Europe follow, with 20% and 13%, respectively. The US hosts the majority of these projects (106 schemes), trailed by Mexico, UAE, Thailand, the UK, and China, all hosting double-digit scheme numbers. Florida, particularly Miami, emerges as the leader within the US.
Ritz-Carlton and Four Seasons lead the brands in terms of the number of schemes, whereas Aman and Six Senses display the most vigorous growth, with 68% and 67% of their portfolios in development.
Victoria Garrett, Head of Residential at Knight Frank Asia-Pacific, emphasized the sustained demand for prime and branded residences. She drew attention to the rebound in global sales of prime and super-prime properties in Q1 2023, notably in key markets like the US, UK, Australia, Spain, and France, which are popular among Asian investors.
Adding to this, Christine Li, Head of Research at Knight Frank Asia-Pacific, pointed out the robust outlook driven by wealth creation, which has fuelled a staggering 28.5% increase in the ultra-high-net-worth individuals (UHNWIs) population globally from 2022 to 2027.
This promising increase, however, contrasts with the 3.8% decline in the UHNWI population in 2022, attributed to the rise in interest rates and geopolitical instability. Yet, long-term trends indicate a projected surge of 28.5% from 2022 to 2027 in the UHNWI populace. Significant contributions are expected from the US and China, with Canada, Australia, India, Germany, and the UK following suit.
Following the considerable dip in global travel during the Covid-19 pandemic, a steady recovery has been noted. Expected to surpass pre-pandemic levels by 31% by 2027, Asia, Africa, and the Middle East are anticipated to see significant growth.
The future demand for second homes and branded residences is predicted to rise with growing affluence and increased mobility. Despite increased interest rates, around 15% of UHNWIs are considering purchasing a property in 2023, underpinning the healthy demand in the luxury real estate market.
In conclusion, Knight Frank's research assures that the booming supply in the global branded residences sector will be met by demand, driven by wealth and travel dynamics, along with property preferences. Despite hurdles, the luxury real estate market is demonstrating admirable resilience and the potential for significant growth, reflecting the evolving landscape of global opulence and exclusivity.
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