“Branded” properties could become the norm as demand for high standards of design, leisure and labeled property increases among the rich in both established and emerging markets, according to the latest report from property group Knight Frank.

Celebrities and global companies are endorsing properties around the globe with Virgin in Moscow, Versace in Dubai and Bulgari in London’s Knightsbridge just some of the high profile companies that are engaging in “branding” properties.

Global research conducted by Knight Frank shows that developers can increase profits by around a third by building “branded homes,” fully-serviced designer luxury pads that separate them from the rest of the real estate pack and appeal to an aspirational clientele.

“Originally, branded residences were simply residential developments linked to an adjacent hotel. However, the provision of hotel services is now only part of the concept,” Liam Bailey, head of Residential Research at Knight Frank and the author of the report said.

Now, wealthy consumers are demanding designer developments with restaurants, bars and leisure facilities on site – and a well known, “trusted” brand name associated with their property, especially in emerging markets such as Russia and South America where “swathes” of new millionaires have been created, the report says.

The report states that the increase in the number of wealthy people — and the rise in the value of their assets — has coincided with a shift in their investment requirements. The group’s data confirms that several years of chaotic financial markets have convinced many in this group that they ought to invest a greater share of their wealth portfolio in tangible assets, including residential property.

The emerging market partiality to “brands” and luxury goods as trusted names, however, has added a new dimension to branded property development.

“Evidence from the development of the luxury consumer goods market confirms the importance placed on brands in these markets as a means of confirming provenance, security and trust. It seems likely that as global wealth creation expands, the demand for high quality residential development property in key global centers will undoubtedly rise,” Bailey states.

Using globally known designers such as Philippe Starck or celebrities such as Jade Jagger, daughter of Rolling Stones’ singer Mick Jagger, developers operating in the competitive global property marketplace view branded residences as a way to give their developments the edge.

Yoo, a luxury property developer cited in Knight Frank’s report has branded and designed more than 10,000 homes, hotels and commercial projects in 37 cities, working with designers such as Marcel Wanders, Jade Jagger and Anouska Hempel.

Yoo chairman John Hitchcox said a name — and its associations with style — appeals to consumers.

“It lends credibility, endorsement and identification, in that the buyer is identifying with a certain lifestyle and taste. Jade Jagger isn’t a designer in the traditional sense but her bohemian lifestyle and taste are very well recognized and there is an alignment there with people who buy schemes that Jade has been involved with,” Hitchcox notes.

“Just as when you walk into an Apple Store you do so with certain expectations of freedom and service, so people look to premium homes with similarly high expectations,”

“Some areas of the world are becoming overheated [in the property market and having something extra to differentiate oneself from competitors is becoming more and more vital.”

Source: Holly Ellyatt, Assistant News Editor, CNBC.com

Prices of ultra-prime property in the world’s leading financial destinations are set to grow by more than a quarter in the next five years.

The value of residential homes worth more than £10-million in London, New York, Hong Kong and Singapore will rise 27% in the next five years, new data from leading property and finance companies predicts.

Nick Candy, Chief Executive of developers Candy & Candy says, “By 2017 the Ultra High Net Worth Individuals (UHNWI) population is expected to have increased by 20% and their wealth by 30%.

“A trophy safe haven property in a global city is typically at the top of the shopping list for wealthy individuals, and their continuing appetite for such investment is expected to exert even greater influence over global property markets in the next few years.”

In 2012 there were more than 300 residential real estate transactions of over £10million that together were valued at more than £6.6billion, Savills research shows.

The total is expected to grow by 400 per year up to 2017 to a total value of £8.4billion. This growth is expected to be both organic and incremental as ultra-prime area expand and new properties are built, driven by the direct impact of global wealth increases and sector price rises.

Global wealth is predicted to increase by around 5% a year from around $122trillion to $150trillion by 2017, figures from The Boston Consulting Group show.

The research, produced by Candy & Candy, Savills and Deutsche Bank, this growth is already underway, as the number of billionaires rose by over 10% in the past year and their wealth increased by 14%.

Much of this wealth creation is being generated in emerging markets such as Africa, central Asia, China and South Korea. Asia’s wealth creation is already rising 11% a year and in Russia, Eastern Europe and Latin America by 9% a year.

North America is home to over one third of the UHNWI population and New York has the highest share of this figure and residential property in the city is good value following price falls in the national property market, says the report.

But when it comes to property transactions over £10million, London is a bigger market than New York, with more than 70% of sales going to overseas buyers, many of whom are establishing a base to live and work.

The rapid rise in wealth generation in Asia has had an unprecedented impact on price growth in the prime residential markets of Hong Kong and Singapore, with property prices increasing by over 150% in each. Asia’s UHNWI population is expected to grow by 50% more than North America’s in the next five years.

The report also examines the real costs to buy, occupy and sell a £10million property in London, New York, Hong Kong and Singapore.

Yolande Barnes, director of Savills World Research, says, “Recent changes to the taxation of international buyers owning property, particularly to stamp duty in Singapore and Hong Kong have made these locations expensive jurisdictions in which to invest. They now rank alongside New York in this respect.

“London’s recent tax changes pale by comparison and the UK capital remains one of the cheaper of the four cities in which to own and occupy real estate.

“But wealthy owners face paying higher property taxes. Hong Kong and Singapore has experienced such rapid price growth that property transaction taxes have been significantly increased by their governments to control the markets. New York has a long established annual property tax and London has also raised its levels of stamp duty and continues to debate the merits of a mansion tax.”

Although tax changes have failed to have a noticeable impact on the buying habits of UHNWIs, there are fears that manoeuvres by governments will put off investors down the line, the report says.

“Evidence from different global markets suggests that the taxation of market transactions tends to reduce the incidence of these transactions so turnover rates have reduced after the introduction of stamp duty taxes,” explained Yolande Barnes.

“We won’t see the rate of ultra-prime house price growth abating significantly over the long term. It will be driven by the rarity value and desirability of homes in established world cities,” she adds.

Source: Overseas Property Professional

Not for the faint hearted – the US $125-million price tag makes this residence the most expensive public listing in New York City!

The triplex penthouse located at The Pierre Hotel encompasses the entire 41st, 42nd, and 43rd floors. The residence encompasses 16 grand rooms, including a living room considered the most magnificent privately owned room in the world. There are four adjoining terraces, five master bedrooms, six full baths and three half-bathrooms, five working fireplaces, separate guest suites plus staff accommodations, and sweeping 360-degree views of Central Park and the surrounding city. The spread, formerly home to the hotel’s Pierre Roof restaurant, also touts a 3,500-square foot grand salon, once used as a ballroom.

Owned by the estate of late finance maven Martin Zweig, the triplex apartment is expected to officially hit the sale block before week’s end, according to multiple sources.

At $125-million, the Pierre penthouse would be the most expensive home publicly listed for sale in NYC, trumping the $100-million CitySpire penthouse and the reported $115-million Bloomberg Tower duplex owned by billionaire Steve Cohen. The $125-million price tag would also make it one of the top three priciest residential properties in America, behind a Dallas estate currently asking $135-million and tied with Los Angeles’ $125-million Fleur de Lys.

Still, for all its grandeur, several luxury brokers who have toured the space with clients suggest the unit may be in need of a little updating.

The Pierre is a white-glove building situated on East 61st Street, near Fifth Avenue. It’s comprised of a five-star hotel and 75 co-op apartments. Residents enjoy hotel amenities like room service — which even caters to pets — and twice-daily maid service, included in hefty monthly maintenance payments. As of 2006, annual maintenance for the penthouse was $464,600.

Residences in the building must be purchased all-cash and potential buyers must pass the stringent co-op board, a factor that typically lessens the possibility of a foreign buyer.

Source: Morgan Brennan, Forbes

Monaco could soon become home to the world’s most expensive penthouse. Spanning 33,000-square-feet and situated on the top floors of a 49-story building in Monaco, this penthouse is now the world’s most expensive, with an asking price of $380-million. It features six bedrooms and a two-story water slide that goes directly into an infinity pool overlooking the ocean.

Prominent names are involved in the project which was dreamed up by architect Alexander Giraldi in a style inspired by belle epoque design. The responsibility for the apartment interiors has been given to the Alberto Pinto agency, while grounds are being done by landscape architect Jean Mus.

The construction started back in 2009 and is expected to be complete by July 2014.

Soaring to 170 metres on its completion in 2014, Tour Odeon will be the tallest building in Monaco and one of the tallest residential towers in Europe.

A limited number of luxurious private residences are available for purchase within the tower benefitting from unprecedented 360-degree views over the sea and the Principality, to be enjoyed through floor-to-ceiling windows and from expansive private terraces.

Residences will feature the very highest quality finishes and fixtures, including home automation and fully-equipped kitchens and bathrooms. Alberto Pinto, one of Europe’s foremost interior designers, has been commissioned to design and decorate interiors of exceptional elegance and comfort.

Owners will benefit from a comprehensive array of on-site services and amenities including spa and leisure facilities, state-of-the-art business centre, select retail boutiques and 24-hour concierge.

• 1,001 – 7,000 sq.ft.
• Leisure Facilities
• 24-hour security
• Balcony
• New Build
• Water View
• Swimming Pool
• Terrace
• International Development
• Freehold

Source: luxuryes.com/Knight Frank/Sky News

(Please note that Canada is not one of the countries analyzed by the Global Property Guide).

The world’s housing markets moved clearly down during the year to the first quarter of 2012, according to the Global Property Guide’s latest house price indices survey.

Residential property prices fell in 24 countries, of the 36 countries for which quarterly house price statistics are available, and rose in only 12 countries.

During the latest quarter the downturn appears to have accelerated, with property price falls in 26 countries and price gains in only 10.

In nominal terms only 16 countries experienced home price falls during the year, while 20 countries recorded price rises. But the Global Property Guide’s statistical presentation uses price changes after inflation, giving a more realistic picture than the more upbeat nominal figures usually preferred by estate agents.

Faster-paced deterioration in European housing markets

Ireland’s price-declines have been, over the duration of the crisis, catastrophic. It is disheartening to see more agony, yet the picture really is alarming. House prices fell 18.95% year-on-year, contrasting with a decline of ‘only’ 13.12% during the same period last year. Furthermore, house prices were down 5.19% during the latest quarter. Tough credit conditions, an oversupply of housing, and weak domestic demand have weighed down the Irish residential property market.

There was also an alarming increase in momentum of house-price declines in Athens, Greece (-11.68%); in Warsaw, Poland (-10.94%); in Portugal (-10.45%); in Spain (-9%); in the Netherlands (-6.05%); and in the Slovak Republic (-5.89%). All saw bigger house-price declines this year than the previous year.

Several countries whose housing markets were last year either in recovery or only just in downturn, saw a significant deterioration in their position, with house price falls during the year to end Q1 2012 in Finland (-2.05%), in Turkey (-2.32%), Sweden (-5.34%) and Riga, Latvia (-5.83%).

In other European countries, any positive changes in the momentum of the housing markets were so feeble, that they hardly signal a recovery. These countries include Kiev, Ukraine (-2.51%), Croatia (-2.45%), United Kingdom (-3.14%), Lithuania (-3.87%) and Bulgaria (-6.21%).

Some strong European markets do relieve the gloom. In Estonia house prices surged by 9.13% year-on-year, and in Austria house prices rose by 8.24% year-on-year. In fact the upsurge in these two countries’ housing markets was so strong as to propel them into third and fourth place in the worldwide league table.

Other strong housing markets over the past twelve months include Switzerland (+5.49%), Norway (+5.43%), Russia (+3.86%) and Iceland (+2.25%). The ‘gainers’ seem to be countries whose housing markets either never experienced the recent downturn (Austria, Switzerland, Norway), or are recovering (Estonia, Russia, Iceland).

House prices in India (Delhi) and Brazil (Sao Paulo) surged further, but momentum was down during the quarter. Over the year to Q1 2012, Delhi house prices skyrocketed by 24.41%, though during the last quarter, they fell 0.07%. Some other Indian cities like Chennai and Kolkata saw house price falls year-on-year, according to NHB Residex.

In Sao Paulo, house prices climbed by 18.70% in the year to Q1 2012, but the latest quarter saw a price-decline of 2.57%.

Most Asian housing markets slowing

In the Philippines (Makati Central Business District), prime condominium prices rose by 7.34% during the year. But the figures possibly exaggerate the upsurge, because they are for Makati, the heart of the Philippines’ business process outsourcing boom. In South Korea house prices were up 2.67% from a year earlier.

Housing markets in the rest of Asia cooled over the year to Q1 2012, due to government measures implemented last year. House prices in Hong Kong were up a mere 0.19% on the year, after a rise of 19.80% the previous year. There were house price falls in Indonesia (-0.13%), Singapore (-1.36%), Tokyo, Japan (-2.64%) and Shanghai, China (-3.68%).

US housing market making progress

US house prices rose modestly to 0.48% year-on-year, with a quarterly rise of 0.55%, according to the Federal Housing Finance Agency’s (FHFA) seasonally adjusted purchase-only house price index. In inflation-adjusted terms, US house prices were still down 2.27% from a year earlier. But this is a significant improvement from last year’s 7.44% decline in house prices.

Increased affordability and a somewhat smaller inventory of homes for sale are positively impacting house prices, says FHFA Principal Economist Andrew Leventis.

Israeli house prices weakening

House prices in Israel were down 4.94% year-on-year to Q1 2012. Prices were hit by worldwide uncertainty, plus measures taken by the Israeli government and the Bank of Israel. The fall comes amid popular protests since last summer over high prices, which have not yet waned.

New Zealand firm, but Australia under pressure

House prices in New Zealand climbed by 0.82% over the year to Q1 2012, after falling 4.79% the previous year. Sales activity has been strong for the last few months, with volumes at the highest levels since 2007.

Australian house prices fell for the fifth straight quarter to -6.04% from a year earlier, the longest downturn for a decade. The central bank has maintained the highest borrowing costs among major developed nations.

Source: Global Property Guide

The Knight Frank Prime Global Cities Index recorded its first quarterly fall since 2009, with the average value of prime property in the world’s key cities depreciating by 0.4% in Q1 2012. This represents the index’s first quarterly fall since the depths of the global recession.

Although a milestone, the index’s negative quarterly growth is not surprising. Quarterly price growth has been below 2% since Q1 2010 and it averaged only 0.6% in 2011.

The first three months of 2012 brought with it little new momentum. The Eurozone’s debt debacle remained at the forefront of the global economic agenda, several critical elections were on the horizon (Russia, France, Greece) and Asia’s highly-effective cooling measures showed no sign of being relaxed. Against this backdrop some luxury buyers took to the side-lines to observe their market’s trajectory.

Despite the overall index’s sluggish performance four prime markets achieved double-digit growth over a 12-month period; Nairobi, Jakarta, Miami and London. Perhaps most surprisingly is the fact that the top five performing cities were spread across four continents – North America to be the only continent to appear twice.

London and Singapore are proof that there is still a level of resilience in the prime markets with both cities shrugging off the introduction of new stamp duties in the first quarter of 2012. In London both prices and applicant numbers increased despite the stamp duty rise to 7% for individuals buying homes over £2m.

In Singapore the new 10% stamp duty for foreign buyers, which was introduced in December 2011, dented demand but not prices according to Nicholas Holt, Knight Frank’s Asia-Pacific research director.

Holt comments, “Prices not only held up but actually increased slightly at the very top end of the Singapore market in Q1 2012. This was not only due to fairly resilient domestic demand, but also due to wealthy Chinese, Indonesian and Indian buyers who continued to buy in this segment of the market undeterred by the surtax.”

In our view the overall index will remain subdued in 2012 fluctuating between marginal price falls and rises (with London, Moscow, Jakarta, Nairobi and Singapore expected to be the strongest performers) but it seems unlikely we are on the cusp of a new deflationary cycle in luxury global house prices.

The safe-haven argument still resonates. Capital flight will continue to focus on cities with low political risk, transparent legal systems, good security and ideally those with an HNWI-friendly (High Net Worth Individuals) tax regime.

The Prime Global Cities Index tracks the performance of luxury property across a selected number of global cities and is produced quarterly.

Source: International Estate Agent Today

Knight Frank Prime Global Cities Index Q1 2012

Growing demand from rich international buyers, particularly among billionaires, is helping to create a new global super class of property in some of the world’s most important cities, according to fresh research.

These high-end global destinations continue to defy the wider economic downturn, with property prices in the top ten cities having increased by 10% in the first six months of 2011 compared to the corresponding period last year, the latest Savills Research global billionaire property index shows.

Hong Kong is the most expensive place to buy a home globally in value terms with average property prices standing at £6,700 (Cdn $10,800) per square foot, up 83% from December 2005 to December 2010 and an additional 10% on top of that to the end of June 2011.

In second place is Tokyo at £5,190 ($8,400) per sq.ft., followed by Paris at £3,270 ($5,300) per sq.ft. and London at £3,090 ($5,000) per sq.ft..

There has been significant capital growth in emerging markets. Russia (Moscow), ranked fourth, has witnessed values increase 110% from December 2005 to 2010 and a further 2% increase this year to take it to £2,520 ($4,000). Singapore has seen a 144% and 16% rise, while Mumbai has appreciated 138% and 7%.

The 10% average prime property price growth recorded in the top cities worldwide compares to average price growth of 6% for ordinary properties in the same cities,

Yolande Barnes, director of residential research at Savills, commented: “We recently identified ten world class cities whose real estate markets have more in common with each other than the mainstream markets of the counties in which they operate and they are all attracting billionaire’s dollars, whether generated at home or overseas.

“Global billionaires can make any country their home, and often have several different residences across the globe. Most will seek a base where they are doing business. This has the effect of funnelling global equity into the very best residential real estate, a rare commodity in any city. Billionaire buyers demand the best international standards of accommodation and are paying prices to match, creating a super class of global billionaire homes,” she added.

The Top 10 ‘World Class’ cities are as follows: Hong Kong, London, Moscow, Mumbai, New York, Paris, Singapore, Shanghai, Sydney and Tokyo.

Source: International Estate Agent Today