Douglas Elliman | Knight Frank Report: Development of Branded Residences Growing Globally

The Douglas Elliman | Knight Frank Global Branded Residences Report 2023 confirms a market enjoying sustained growth in new brand-operated residential developments, despite significant recent economic turmoil. Tracking the portfolios of 15 leading luxury branded residence operators, the report identifies 186 live developments globally, which will be joined by 32 new developments this year, 23 in 2024, 26 in 2025 and 22 in 2026. The research also identifies a further 35 projects in the pipeline with no confirmed launch date. The number of new developments with known opening dates represents a 12% annual growth rate up to 2026—or 55% overall over the period to 2026. View the full report. The DE|KF report confirms this growth in supply will be matched by demand—evidenced by key wealth, travel and property dynamics. “As the sector matures it will face growing challenges. These include a potential conflict between purchaser and developer timescales, the need to define and substantiate the added value that a brand can provide, as well as the need to provide clear evidence of its commitment to sustainability,” said Liam Bailey, global head of research at Knight Frank. “However, the clearest feedback from our research is the depth and breads of opportunities for developers and operators. The global economic environment is more challenging this year, but our view for the period up to 2026 is that demand will be supported by wealth creation, travel and investment fundamentals.” North America accounts for nearly 40% of all developments, followed by Asia-Pacific (20%) and Europe (13%). The projects are located across 52 countries, dominated by the U.S. (106). Mexico, the UAE, Thailand, the UK and China all have double-digit numbers of developments. Within the U.S., Florida is leading the charge compared with all other states. 80% of Florida’s new developments are found in Miami. EDITION RESIDENCES, MIAMI EDGEWATER, designed by award-winning architect Bernardo Fort-Brescia of Arquitectonica and acclaimed Studio Munge. CLICK TO LEARN MORE. In terms of growth markets, 60% of the Middle East market is currently under development. Europe and Latin America follow at 49% and 46% respectively. In absolute terms, the biggest development pipelines are seen in the U.S. (36 known developments), the UAE (7), Mexico (7), the UK (5) and Saudi Arabia (4). In terms of brands, Ritz-Carlton leads with the highest numbers of residential projects, followed by The 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. Wealth creation will support the sector. 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 U.S. 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. Travel volumes are set to recover. 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. Property remains in demand. 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. Global sales of prime and super-prime properties have rebounded and key hub markets such as the U.S., UK, Australia, Spain and France are favored destinations for second home purchases. Explore branded residential developments.