John McGrath – The rise of branded residences
An interesting trend in the global prestige market today is the rise of branded residences.
Branded residences are typically apartments within a hotel-led development. Owners have access to the same luxury services and facilities as the hotel guests, delivering a luxurious, unique and convenient lifestyle that is very suitable and appealing to executives and high net worth individuals.
Their rising appeal is highlighted in the 2022 Rightsizing report by independent global property consultancy Knight Frank.
According to the report, there are now more than 400 branded residences in scores of countries around the world.
The most prestigious branded residences in Australia today are the Crown Residences at One Barangaroo, which is part of the six-star Crown Barangaroo Sydney hotel development.
Crown Residences have led the way with branded residences here in Australia. Residential owners have the same access to the services and facilities of the hotel guests.
This includes the services of a 24-hour concierge, on-call valet, in-residence dining with meals from the hotel’s many restaurants, daily housekeeping, car detailing and personal shopping.
They also have access to the hotel’s swimming pool, the gym with its spectacular harbour views, the tennis courts and a glamorous day spa.
Another unique element to Crown Residences is that all apartments are penthouse-quality. They have the same fixtures and finishes and views of the harbour and/or the city’s landmarks. That means you don’t have to own the actual penthouse to have a penthouse lifestyle there.
Other impressive branded residences include the Mondrian Gold Coast Hotel and Private Residences in Burleigh Heads and Saint Moritz Beachfront Residences in St Kilda, Melbourne.
According to the report, a survey found that 44% of Australians would be willing to pay a premium to purchase a property in a branded residence development. That’s 5% above the global average.
The survey found the main driver for purchasing a branded residence was the provision of services and facilities. But I think the comfort of a luxury international brand is a big factor, too.
Crown is a renowned international brand associated with high-end luxury casinos and hotels. So, any apartment complex carrying that revered brand name is going to be taken seriously by purchasers.
There is also social status attached to living in a branded residence, and they are typically situated in the best of the best locations.
Some overseas examples include One Hyde Park in London, which is linked to the Mandarin Oriental hotel, the Baccarat Hotel & Residences in New York, The Beekman in New York, The Royal Atlantis Resort and Residences in Dubai and The Four Seasons Private Residences in Madrid.
In addition to providing a phenomenal lifestyle, prestige apartments have a good track record for capital growth.
The Knight Frank report defines prestige property as the top 5% of any market by value. The price thresholds in Australia are $3 million in Sydney and Melbourne and $2 million in Brisbane, Perth and on the Gold Coast.
According to the report, newly-built or off-the-plan high-rise prestige apartments in Australia have had 36% average capital growth since 2015, outperforming the share market at 34% and the established apartment market at 31%.
That’s everywhere except Sydney, where a shortage of new prestige apartments pushed up demand for established apartments and created better capital growth of 48% over the past seven years.
The super-prime category is defined as the top 1% of any market with price thresholds of $10 million in Sydney and Melbourne and $7 million in Brisbane, Perth and on the Gold Coast.
There’s little doubt that the popularity of branded full-service residences are definitely on the rise. Sydney’s Crown Barangaroo, The Mondrian on the Gold Coast, and Saint Moritz Beachfront Residences in St Kilda are testament to this and definitely an indicator of the desire for quality apartment living.