Apartment towers sporting upmarket brands ranging from Lamborghini to Armani could soon pop up across Sydney, as luxury home buyers in Australia turn their attention to “trophy” purchases.
While hotel chains and upmarket brands have had a long history of co-developments, the trend is now migrating to apartment complexes, where the big fashion and jewellery houses are targeting a new set of buyers.
According to the latest Knight Frank Global Branded Residences Report 2023, the luxury apartment market is enjoying sustained growth, with the number of global branded residences to jump 55 per cent by 2026.
The report pinpointed Australia as “ripe” for the development of more branded residences in the future, with the designer labels seen as a “trophy purchase” that can translate to hefty premiums on high-end real estate developments.
Using data from its global wealth report, Knight Frank’s head of residential in Australia, Erin van Tuil, said there was evidence the growth of “ultra-high net worth individuals” – defined as those with a net wealth of more than US$30 million ($A44.86 million) – was creating the demand for prestige property.
Knight Frank’s data found that the number of these wealthy individuals in Australia was set to grow by 40.9 per cent over the next five years, from 17,456 last year to 24,589 in 2027. The global firm is a specialist in the luxury housing sector.
A branded residence is generally recognised as a residential property associated with an established brand, such as a hotel operator. The brand provides the property with its branding, services and amenities.
Some apartment towers will carry the name of the luxury brand involved in their developments, while other residential developments will be more discrete.
While hotel companies have pioneered the concept, they have now been joined by fashion houses including Armani, Roberto Cavalli, Fendi and Bulgari, as well as marque automobile brands Porsche, Bentley and Aston Martin.
Ritz-Carlton is already operating in Australia, as is the Crown Residences at Barangaroo, in Sydney.
Other names that are coming include the St Regis-branded hotel that will take up 185 rooms in the first residential tower in the $1.7 billion La Pelago project in Surfers Paradise. It is being developed by Tim Gurner and joint venture partner Wingate.
Ennismore, in which Accor Hotels holds a majority shareholding, is building Mondrian Residences in Burleigh Heads at the Gold Coast.
“Within the Australian property landscape we are experiencing strong interest from key players in the branded residence space for prime sites in south-east Queensland, including the Gold Coast and Brisbane,” van Tuil said.
“The value proposition of these sites, wealth migration and forecast annual growth of 3 per cent for prime residential property on the Gold Coast over the next three years proves there is a strong case for investment in branded residences.”
She said there was a myth in the market that offshore buyers would make up the biggest pool of purchasers for branded homes, as while Australia was a favoured destination for second home purchases, the depth of the market was much greater.
‘Within the Australian property landscape we are experiencing strong interest from key players in the branded residence space.’Knight Frank’s head of residential in Australia, Erin van Tuil
“Knight Frank’s research confirms this growth in supply will be matched by demand – evidenced by growing wealth creation, increasing travel volumes and prestige property dynamics.”
North America accounts for nearly 40 per cent of all branded residence projects, followed at 20 per cent by Asia-Pacific – which includes Australia – and Europe (13 per cent).
Upon tracking the portfolios of 15 prominent luxury branded residence operators, Knight Frank uncovered a total of 186 ongoing projects worldwide.
This year alone, the firm identified there would be 32 new developments, followed by an additional 23 in 2024, 26 in 2025, and 22 in 2026. Furthermore, the research reveals an additional 35 schemes in the pipeline, although their launch dates are yet to be confirmed.
In the works are the Dorchester Collection apartments named after the famed London hotel; the Mandarin Oriental in Asia; a London development has opened named after the Hong Kong-based Peninsula; and Singapore’s famous Raffles has also put its name on apartment blocks.
In Spain, Italian automaker Lamborghini is developing the exclusive Tierra Viva complex, which offers scenic views and designs drawn specifically from its supercars.
Other standalone developments include apartment towers named after the Knightsbridge in London and The Waldorf-Astoria in New York. The latter is coming to Sydney, but initially as a hotel.
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Source: Thanks smh.com