Prestige Residential 2025/26
Signature Living: The opportunity for branded residences in Australia.
3.
Defining branded residences
4. Why buyers choose branded residences
5. What’s driving buyer demand?
6. Why developers and hotel brands build branded residences
7. Infusing the global hotel experience
7. Future trends
Globally, a branded residence is generally recognised as a residential property which is associated with an established brand, such as a hotel operator The brand provides the property with its branding, services and amenities
Branded residences were traditionally residential developments linked to an adjacent hotel This concept was born in 1927 on the Upper East Side of New York when the Sherry-Netherland hotel first offered private residences
This concept ramped up in the 1980's when Four Seasons open its first branded private residences in Boston and Aman launched the first resort branded residence concept in Phuket Then in London, One Hyde Park: The Residences at Mandarin Oriental, were completed in 2011 which set a new international benchmark for luxury branded developments.
Closer to home in 2020, Sydney saw Australia’s first hotel-led development with integrated homes at Crown Residences at One Barangaroo
Today, hotel serviceability only forms part of the branded residence concept As this market has evolved around the world, developers have widened their scope of brand collaboration with increasingly more being delivered with luxury car and fashion labels.
While an emphasis remains on providing a range of services and amenities to serve wealthy but time-poor individuals, developers are investing in globally renowned architects, place makers and interior designers to create an identity for their project and the surrounding environment
Design is a critical part of the creation of a brand, as it enhances the quality of the final product and also helps potential purchasers identify with the development
Strategic significance of a brand
In an increasingly competitive marketplace, brand affiliation has emerged as a powerful tool for product differentiation.
Residential developers have drawn inspiration from the hospitality sector, incorporating branding and design principles to cultivate both individuality and exclusivity
This heightened emphasis on brand and design, particularly in the premium segment, is offering an aspirational lifestyle around the world whilst reshaping consumer expectations
Key milestones of the branded residence
Key scheme types
Traditionally only penthouses provided an option for wealthy apartment buyers, so a branded residence can bring together a community of residents with shared values to all reside within the same prime location
Sophisticated buyers recognise branded developments as a mark of quality and consistency, offering confidence in the standard of design, service, and construction delivery
Residences are likely to showcase an elevated array of amenities, with meticulously designed spaces and premium services that cater to discerning lifestyles
In-house services help preserve time for globally agile residents With full hospitality offerings, including housekeeping, concierge, and room service, daily needs are seamlessly managed
Professional management and consistent building maintenance, as hospitality brands reinvest to uphold their standards. The service charge can be relatively cost-effective when calculated at scale
People naturally gravitate toward brands that are widely admired and reflect positively on their personal identity. This effect is heightened when individuals already have an existing connection with the brand
When a rental pool is available, buyers can potentially offset maintenance costs at times of the year when the home is not personally in use.
Global buyers are willing to invest more in residences that offer seamless service, meticulous upkeep, and refined touches, ensuring a luxurious experience even when they're out of town
Wealth creation, global travel and growing appetite for luxury property will continue to underpin the sector
The fortunes of the wealthy improved throughout 2024, with a 4.4% rise in the number of individuals worth over US$10 million, according to the Knight Frank Wealth Sizing Model. This was encouraged by growth in financial markets, led by equity markets, despite an overall slowdown in the global economy. North America and Asia made up 78% of this wealthy population Closer to home, in Australasia, the expansion was 3 9% more wealthy people over this time
Stronger global economic growth and the easing of interest rates are earmarked to encourage future wealth creation Before the end of 2028, wealthy population (US$10 million+) growth is projected at 6 9% around the world and at 5 3% across Australasia North America and Asia will contribute significantly to wealth creation, but other regions like Africa and Latin America will see substantial growth in their number of wealthy people
global travel
Increased mobility is encouraging wealth distribution International visitor spending is forecast to reach an unprecedented US$2 1 trillion in 2025, which would be US$164 billion more than the 2019 peak, as reported by the World Travel & Tourism Council
Global wealth expands Change in US$10m+ populations by region 2023 vs 2024
Relative change in Australian prestige prices allowing for currency movements By currency of buyer, year ending Q2 2025
While overall the travel and tourism sector is thriving, the United States continues to trail behind 2019 levels and although the Chinese mainland surpassed pre-pandemic spending last year, this growth is projected to decelerate significantly in 2025.
In contrast, Australia is earmarked for another recordbreaking year to confirm top-tier global destination status and this becomes a significant drawcard when considering building branded residential developments
Over the past five years, geopolitical and economic turmoil have reshaped global property markets The rise in affluence has contributed to the desire of wealthy investors to expand their residential property portfolios with the growth of the second home and branded residence markets worldwide.
In the Knight Frank 150, being the Family Office Survey within The Wealth Report, 25% of this wealthy population are considering purchasing a home in 2025, where an average 4 7 homes are currently owned by the family
Given prestige property tends to have a bias towards an international audience, many take confidence identifying with a known brand when navigating purchasing a home in a new country Ongoing moves in market pricing and currencies are shifting the landscape in 2025, making the buying power particularly attractive in Australia 1 4%
The 8 key motivators for developers and hotel operators to build branded residence homes
In markets where residential supply is a priority, integrating apartments into hotel developments can be viewed favourably from a planning and policy perspective
Residential apartments can generate higher value than hotel rooms, while also offering cost savings through more efficient layouts and lower specification requirements
A new hotel can greatly elevate areas lacking strong residential character. In commercial precincts, the presence of a landmark hotel significantly enhances the marketability of adjacent residential developments.
Safeguarding Operations
Residences can help mitigate cyclical, seasonal, and unexpected disruptions that impact hotel occupancy and service demand
In established markets or where developers aim to set new price benchmarks, branding and service become key product differentiators
Expand Platform
For hotel operators, branded residences offer a new platform to express the brand and deepen consumer engagement
Selling residences off-plan and receiving substantial capital at completion supports both development and operational cash flow, especially as hotels typically take time to reach optimal occupancy
Brand involvement can boost project visibility and add 25-35% uplift in value for residential developers according to Knight Frank, often serving as a form of insurance policy for the development
Adopting exclusive lifestyle experiences within new developments by combining brand identity with integrated world-class services and amenities
Key considerations for hotel-led branded residence schemes
Key opportunities for branded developments in the pipeline
Reduce footprint in both design and operation to appeal to environmentally conscious buyers and reduce long-term operational costs
Innovative solutions and technologies increasingly tailored to meet the diverse needs of varying demographics
Prioritise experiences over traditional services and amenities to better focus on lifestyle, community, and emotional connection
Author
Michelle Ciesielski
Head of Research
McGrath
michelleciesielski@mcgrath com au +61 414 694 220
Contributors
Adam Ross
Head of Private Office
McGrath
adamross@mcgrath com au +61 409 663 051
www.mcgrath.com.au