The arrival of branded residences

The properties are anticipated to fetch a premium of 25 to 35%

The arrival of branded residences


By Rebecca Pike

Branded residences in Australia are anticipated to fetch a premium of 25 to 35%, according to new research.

While it was once a rare sight, properties with a ‘name’, or branding, can now be found in almost every major city and holiday destination and Australian cities are now no exception.

According to property consultancy group Knight Frank, this was up until the 1980s when the sector began growing.

Hotel branded residences are now present in more than 180 locations and 64 countries globally and more recently luxury brands outside hospitality have lent their names to new developments.

Liam Bailey, global head of research at Knight Frank, pointed to one particular development setting a precedent.

He added, “Since a global residential benchmark was set at One Hyde Park, the London market has seen an increase in branded residences at the top end of the market.

“In New York, hotel-branded residences have been a key segment of the city’s luxury market since the original hotel-serviced residential apartments at The Sherry-Netherland and The Carlyle.

“In Dubai, the emergence of branded residences has become increasingly common with the city’s transition from a holiday destination to a city in which to invest in a more permanent home.

“The Asian market for hotel-branded residences has seen strong growth, particularly in Thailand and Indonesia, with Asia now accounting for an estimated 30% of schemes. This trend is set to continue."

In fact, in Asia, price differentials can vary up to 132%.

Erin van Tuil, director, One Barangaroo at Knight Frank said that the Crown Residences at One Barangaroo marked the introduction of hotel-branded residences in Australia.

She added, “The arrival of branded residences at this time into Sydney is no coincidence. Sydney continues to attract high net worth individuals (HNWIs) by taking up a significant proportion of the 10,000 HNWIs net inflow into Australia each year, the highest of any country, for three years running.

“One Barangaroo, Crown Residences, as the country’s first fully-integrated, six-star hotel branded residences, has received a very warm welcome from both Australian and offshore purchasers alike since sales commenced. The driving force behind the ongoing interest is a combination of the lifestyle offering, as well as the design and location.

“The full suite of hotel-style concierge services, in-room dining, priority booking at the restaurants within the building and the private residents’ pool deck, means the Crown Residences have set the benchmark high for Australia and will compete on a global level to both investors and residents alike.”

According to van Tuil, “While the branded concept in the Sydney market is still embryonic, all the evidence we have to date from marketing One Barangaroo is that a premium of 25% to 35% ahead of comparable non-branded product is where the market will sit.

“However, this price premium may in fact provide cost efficiencies to residents when land tax or service costs such as gardeners, cleaners and other maintenance providers are absorbed by the hotel.”

Knight Frank’s Head of Residential, Australia Sarah Harding said, “There are many motivators from both providers and purchasers for the supply and demand of branded residences globally and in Australia. For suppliers, these include market differentiation, brand enhancement and year-round income while for buyers, there are many benefits including service, amenities, security, quality and brand affiliation.

“In Australia, products such as One Barangaroo are putting Australia on the global map for branded residences and offering a new level of luxury, lifestyle and service that is in demand. We anticipate the branded residences sector in Australia to continue to grow.”

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