—WORDS Kirsten Craze
How luxury brands are shaping the skyline of our most elite residential hubs.
While five-star hotels moved into the luxury residential space a century ago, today the mode du jour for this property industry niche is haute couture, as fashion labels, exclusive jewellery names and even prestige automobile brands drive demand for luxury branded residences worldwide.
In recent years, coveted names including Dolce & Gabbana, Armani, Fendi, Lagerfeld, Baccarat, Bentley and Aston Martin—among dozens more— have collaborated with major international developers to create unparalleled residences where brand loyalty is a year-round lived-in experience.
Australia is a late adopter in this multibillion-dollar real estate universe which now counts approximately 700 addresses in its exclusive global club. Although currently, there are no fashion-branded residences on our shores, industry insiders say the local market with its ever-growing pool of ultrahigh net worth individuals (UHNWIs) is ripe for the picking.
Knight Frank’s The Wealth Report 2024 found that in Australia, the number of UHNWIs—defined as those with a net worth of $30 million or more—rose by 2.9 per cent between 2022 and 2023 to reach 15,347 people. That figure is expected to rise a further 27 per cent by 2028 to 19,491.
The real estate researcher’s Global Branded Residences Report 2023 revealed the worldwide market for these deluxe dwellings is in expansion mode, forecasting a 55 per cent uptick by 2026.
A similar report by London-based commercial real estate brokerage Savills revealed volume in the branded residence sector is up 160 per cent over the past decade.
Riyan Itani, director and founder of consultancy Global Branded Residences, said South East Asia is the next emerging market. And although he remained tightlipped about specific imminent brand collaborations in Australia, he hinted there is serious interest in developments down under.
“There are 714 completed branded residential developments in the world and in the next five to seven years, there’ll be another 660 completed. So what’s taken 100 years to build [will] effectively be built again in just a few years,” Itani says. “That gives you an idea of the growth in the market and the pickup rate of this model from developers and investors.”
“Thailand is growing as well as Vietnam with Mexico and Brazil coming up through the ranks. Saudi Arabia has also come from almost nothing to now having a significant pipeline of branded residential developments. What’s interesting is the most growth is in emerging markets; it’s not in Paris, New York or Miami.”
Savills reports that emerging cities such as Cairo, Limassol, and Muscat are poised to witness substantial expansion, alongside Middle Eastern hubs including Jeddah, Makkah, Doha, with eastern European destinations such as Croatia’s Dalmatia and coastal Montenegro also in the mix.
New York was home to the first branded residence partnership back in 1927 when the iconic New Netherland Hotel and apartments combined forces with the popular Sherry’s restaurant on the Upper East Side. The Four Seasons Boston then kickstarted a more contemporary residential concept in 1985 with other hotels such as St Regis, Ritz-Carlton and Waldorf Astoria swiftly joining the mix.
Although luxury fashion labels made their glamorous entrance into the branded space a decade ago, Mr Itani said hotel homes remain the frontrunners for market share. “Hoteliers still very much dominate. Based on completed projects, 77 per cent are hoteliers and 23 per cent are non-hoteliers. When we look to the next five years or so, that number stays approximately the same. I don’t think we’re anywhere near a point where the non-hoteliers are going to challenge the hoteliers and that’s mainly because they’re relatively new to the sector.”
Nonetheless, fashion is making its mark. Only a decade ago Dubai was home to 10 branded residences but now there are approximately 190 such projects in the local pipeline for delivery by 2030. Bulgari Lighthouse is set to open in 2027, Armani will follow up its successful Burj Khalifa development of 2010 with a new property in Palm Jumeirah next year while Roberto Cavalli and Lagerfeld developments are already underway. Prestige car brands Mercedes-Benz, Lamborghini, Bentley and Bugatti have all recently announced residential plans for the UAE.
In Miami, where there are more than 40 branded residences, Dolce & Gabbana, Porsche, Aston Martin, Mercedes, Bentley, Armani, Fendi, Missoni and Baccarat are behind some of the dozens of developments recently completed or on their way to fruition. Even fashion magazines are joining the fold with Elle Residences, a 25-storey 180 tower inspired by the pages of ELLE Decor promising to bring a blend of mid-century modern and contemporary French chic to South Florida.
With New York considered the epicentre of global hotel-branded residences, Armani’s newest bite of the Big Apple will sit atop a planned retail store for the fashion brand at 760 Madison Avenue. The exclusive collection of 10 apartments—where Mr Armani reportedly plans to keep a local pied-a-terre—has already achieved sales in excess of US$25 million.
The One Atelier is an international consultancy for prime new branded developments which has liaised with the likes of Elle, Dolce & Gabbana, Fendi and Lagerfeld. Its CEO, Michele Galli, said when fashion brands began labelling real estate 20 years ago, it was just about the name. Today, it’s a considerably more evolved experience.
“[Today’s] buyers are much more mature and they’ve started to be more demanding,” Galli says. “Most brands have understood that it cannot be only a matter of royalties to receive, but the project must be more consistent and represent the DNA of the trademark in a proper way.” He continues: “Projects are now definitely representing the brand much more, and the market is extremely competitive, which is very positive for the consumer because they have the possibility to choose from a pretty wide offering.”
Galli added that fashion and other luxury brands are giving hotels a run for their money.
“In my opinion, it’s pure maths. The awareness of fashion brands in culture and the media is much bigger than [that] of hotel brands. What a fashion brand can offer is something much more flexible because they are flexible as a priority. Every year they have something new; they change colour, patterns, and styles.”
He adds that for fashion brands, it is also a story of creating exclusivity. “If you buy a Birkin bag now, probably in seven years the value will be much higher because that’s the commercial strategy of the brand to make these pieces extremely desirable. You simply have to wait,” Galli explains. “I feel this is the big difference why fashion brands are probably performing better in real estate than hotel brands. Hotels are always looking at increasing the number of the keys in a territory whereas a fashion brand usually has the strategy of finding one place where they put one flag.”
“A fashion brand is also able to create some synergies between the core business and the residential buyers. Very frequently they offer an owner to become part of, let’s say, ‘the family’.”
The One Atelier’s RE branding and marketing director, Anna Masello, agrees a sense of connection is often a purchaser’s motivation.
“These residences offer a sense of belonging to a lifestyle the buyer has always dreamed of. It’s that aspiration of being part of a community; you cannot buy a ticket to access these catwalk shows, you’re invited to a catwalk. Purchasing branded real estate with a fashion brand allows you to enter into a community that is extremely desirable,” she said. “It’s not about labelling and royalties, it’s about the brand creating a world so the real estate becomes part of that experience.”
Unsurprisingly, premium brands can command premium prices above and beyond their non-branded competitors. But just how much that luxury markup is, explained Mr Itani, will depend on an old-school real estate trope.
“The premium is all based on location. It’s a calculation of the sales performance of the branded residence compared to a cohort of non-branded competing developments,” Itani explains. “If I’m doing a brand premium study in somewhere like New York, where comparable non-branded residences are very sophisticated with concierge services, gyms and restaurants—but they don’t have a brand name—then the premium for a branded development is a lot tighter. Essentially, all you’re adding on is the brand,” he said.
“In a competitive global city like New York, you’d expect to see brand premiums ranging from 8 to 15 per cent. Whereas, in resort and emerging markets the brand premium can be anywhere from 50 to 200 per cent because the competing projects often have no concierge services, resident lounges, gyms, or restaurants. They’re solely residential, and even then the fit out isn’t that great often because it’s just not what the market has been expecting. When you turn up with a branded residential development, everybody goes ‘wow!’”
Averaged out globally, Itani said price premiums are approximately 30 per cent when taking into account the width and breadth of very sophisticated markets through to emerging markets.
“What tends to happen is one developer does it, they blow the market out of the water, then other developers realise they can achieve 30 per cent more in their sales values by bringing in a major brand and the management and services to go along with it. That’s when you see a very fast pickup of developers wanting to do branded residency,” he explains.
Branded residences as a minimum will feature swimming pools, wellness centres and spas, gyms, residential lounge facilities, rooftop bars and restaurants, limousine services, as well as resident-first perks attached to the luxury brand. The extent of their offerings is only limited by the appetite of the buyer and the willingness of the luxury label to share its brand.
“Australia might be very far from New York, but it’s going to be a very interesting place for branded real estate in the future,” Galli says. “There are already a number of requests by local developers interested in joining with fashion or car brands. It’s just a matter of time, sooner rather than later.”
Ross Savas, managing director of Kay & Burton, said the group had seen a significant uptick in interest from Australians wishing to secure branded residences overseas.
“These exclusive global residences represent a unique lifestyle that is proving highly sought-after by our high net-worth clients who recognise the incredible level of luxury on offer,” Savas explains. “This is evidenced in the fact that an Australian purchaser was among the first to buy into the residential offer at the newly transformed Waldorf Astoria in New York, and there’s clearly an overwhelming appetite for projects in key locations such as Dubai and Miami as well,” he said, adding that the desire for designer homes is growing on local soil.
“We’re fielding regular inquiries from buyers curious about the branded residences currently available or soon to enter the market in Australia. Whether coming from buyers already based in Australia or those looking to purchase here, the demand for this type of home is strong and I believe the market will only continue to strengthen.”