Miami, and by extension the U.S., has long dominated the realm of branded condos in luxury real estate.
But a new report from Knight Frank shows the Middle East is closing in on the lead. According to the report, the U.S. makes up 32.7 percent of all active branded residences and 26.2 percent of pipeline projects, while the Middle East has 15.9 percent of active branded residences and 26.7 percent of pipeline projects.
These include Emirati developer Aldar’s planned Mandarin Oriental Residences, a 226-unit Bjarke Ingels-designed project in Abu Dhabi’s Saadiyat Cultural District. Other brands with projects planned in the Middle East include Nobu, Aman, Bulgari and Waldorf Astoria.
It will still take years for the Middle East to rival the volume of branded projects in Miami and the greater U.S., but the numbers signal demand for these kinds of developments in both markets.
“In absolute terms it’s not the fact that the U.S. is losing ground,” said Liam Bailey, the global head of research at Knight Frank. It’s more thanks to a significant, sustained growth spurt in the United Arab Emirates and Saudi Arabia.
“America has kind of paved the way and shown how this market can evolve, and I think other regions are catching up,” he said.
The report paints the picture of a global boom decades in the making. In 2011, 169 branded residences existed worldwide with a total of 27,000 units, according to the report. Today, 611 branded residences exist, and the report projects the number will rise to 1,019 by 2030. Units will total 162,000 by 2030. That equates to 500 percent growth in 20 years.
South Florida leads as the North American epicenter for branded projects, with New York City close behind. That is set to shift with Miami’s pipeline. Bailey confirmed the branded residence market in Miami will be almost twice the size of New York’s by 2030.
Branded projects are also a growing segment in Texas cities like Dallas with the planned Rosewood Residences Turtle Creek, and Austin with the Four Seasons Private Residences Lake Austin. Los Angeles also has a growing branded residences market, with a planned Aman Beverly Hills that will include two condo towers.
The Knight Frank report also poked at what works –– and what doesn’t –– in a branded condo project. Hotel brands make up 83 percent of existing branded residences worldwide, and that is projected to hover at about 80 percent with current planned projects. Projects led by non-hospitality brands, like Bentley, Major Food Group, Fendi and Baccarat have made flashy market debuts in recent years. But for developers, hospitality brands are a “tried and tested formula,” according to Bailey.
“The challenge that the non-hotel brands have is the defense of their value-add,” he said. “The hotel brands can say very confidently, ‘This is our background.’”
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