• Real Estate Trends: Branded Residences

    September, 2023

The worldwide count of ultra-high-net-worth individuals (UHNWIs) experienced a 3.8% decrease in 2022, primarily influenced by a surge in interest rates and challenging geopolitical circumstances. Nonetheless, optimistic long-term forecasts indicate that the UHNWI population is expected to surge by 28.5% from 2023 to 2027. The United States and China are poised to be the countries making the most significant contributions to that growth.

The upscale branded residential market encompasses 324 projects, comprising more than 26,000 residential units across 52 nations. Among these monitored projects, 186 are currently operational, while 138 are in the pipeline and expected to open within the next three years. These findings indicate a sector that is projected to grow at a rate of 12% annually until the year 2026.

Regarding growth markets, the Middle East takes the lead with 60% of its market currently under development, closely followed by Europe at 49%, and Latin America at 46%. In absolute terms, the most substantial development pipelines are observed in the USA (36 known schemes), the UAE (7), Mexico (7), the UK (5), and Saudi Arabia (4).

Among the USA states, Florida is leading the way compared to all others, boasting the highest number of operational units (1,642) and the most units in the pipeline (1,872). Notably, 80% of Florida’s projects are concentrated in Miami, which currently has 11 operational schemes and is expected to add 10 more by 2026.

Projects can be categorized into two main types: city and resort. Within resorts, are further divided into two categories – sun and ski. City projects constitute approximately 62% of global schemes, with sun resorts accounting for 32% and ski resorts for 6% which also provides a regional breakdown by project type.

As for the pipeline, city projects are the most active with 69 projects in progress, followed by sunbelt resorts with 33 known pipeline schemes, and 3 pipeline schemes for snowbelt resorts.

The percentage of each type depends on the area, for example in the Middle East, 94% of the Branded Residences are in cities, while in Latin America, 79% are in resort locations.

Regarding the brands, Ritz-Carlton leads in terms of the number of schemes, closely followed by Four Seasons, St. Regis and Aman. In terms of growth rate, Aman and Six Senses take the lead, with 68% and 67%, respectively.

Spain is experiencing a growing interest in Branded Residences, especially in 4 areas, Madrid, Barcelona, Costa del Sol (specifically Marbella) and the Balearic Islands. There are currently two projects in Madrid (both in the Salamanca district), also two in Marbella, the W Marbella and Four Seasons Marbella and another one in Ibiza under construction that is going to be operated by Six Senses.