global development report 2015

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FINE HOMES
RESIDENTIAL
*Please refer to the important notice
at the end of this report
GLO BAL D EVELO PM EN T R EPO RT 2015
WELC O M E
Welcome to the third edition of Knight
Frank’s Global Development Report.
The luxury residential development
industry has become an increasingly
exciting arena over the past decade as
architectural and design standards have
continued to break new ground.
Economic and business connectivity
between the world’s key cities, combined
with unprecedented levels of wealth creation
across the developing world, has created
global demand for the finest properties.
Knight Frank has been at the forefront of
this process, helping to share development
skills and research, and forecasting the new
markets and opportunities around the world.
Within our report we consider the
developments that are influencing trends in
design, facilities and services; highlighting
London and New York, but casting an eye over
the best from around the rest of the world.
We focus on the challenge faced by many
developers who are looking to add value,
and assess how the integrated approach of
our teams, in locations like Mumbai, Dubai,
Sydney, the Caribbean, Hong Kong and
Madrid, adds real value to the developer’s
decision making process.
“
E CON OMI C A ND B U S I NE S S C O NNE C TI VI TY
BE TW E EN T H E WO R LD ’ S KE Y C I TI E S,
C OMBIN E D W I T H U NP R E CE D ENTE D L E VE L S
OF WE A LT H CR EAT I O N A CR O SS THE
D E VE L OP IN G WO R LD , H A S CR EATE D GL O BA L
D E MAND F O R T H E F I NES T PR O PE RTI E S
”
ANDREW HAY
GLO BAL HEAD O F R ES IDENT I AL
A NDR EW.H AY@ KNIGH TF RANK .COM
The report also reviews key development
hotspots in six leading cities, shares insight
from Robert Lyle, the leading luxury lifestyle
and branding expert, and Marc Kushner, an
eminent New York-based architect.
As competition intensifies in many centres,
it is crucial to understand occupier needs
and emerging demand trends. To facilitate
this, our research teams continuously review
the performance of rents, prices and sales
volumes in key markets across the world in
order to ensure our clients and their portfolios
are in the strongest position possible.
I hope you enjoy reading this report and
it helps to demonstrate the depth of our
understanding and knowledge. We are able
to commission specific market analysis on
local market trends and the forecasting of new
wealth flows that will influence forthcoming
projects. If we can be of any further help then
please do contact me, or one of our global team
whose details are at the back of the report.
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GLO BAL D EVELO PM EN T R EPO RT 2015
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OVERVIEW
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T H E P L I M SOL L B U I L D I N G,
K I N GS CR OSS
GLO BA L
IN FLUENCER S
A D D I N G VA LUE T O TH E
D EVELO PM EN T CH AI N
Our first annual survey of
key global developments
focussing on London, New
York and some of the best
developments worldwide
Knight Frank’s experts
explain how their
integrated approach helps
developers to build the
most desirable homes,
while maximising returns
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THE 10 ST EP S T O
M A XI M I SI NG R ETUR N S
O CCUPAT I O N A L
D EM A N D & I N VES TM E N T
Knight Frank’s
development pathway
highlights the 10 key stages
development consultancy
and marketing experts will
split a project into
A city-by-city look at
key performance
indicators, capital growth,
levels of occupancy and
rental income
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FUT UR E SUP P LY
H O TSP O TS
Future gazing: Knight Frank
casts light on shifting city
development opportunities
and highlights those submarkets that are set to see
the largest volume of new
homes delivered
111 M U R R AY
ST R E E T,
N E W Y OR K
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TR E N D
S E TTE R
M AR K E T S I Z E
& P E R F OR M AN C E
Two influential figures
in the development
world discuss the latest
design influences
shaping the sector
We compare the size and
recent performance of
luxury residential markets
to help developers and
investors make informed
decisions as to where future
opportunities lie
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L AS T
W OR D
C ON TAC TS
& D E F I N I TI ON S
Two leading property
developers in New York
and London share their
views on the key trends and
opportunities in development
Contact our global
residential development
team to discuss your
requirements and explore
potential new opportunities
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138%
AT 1 3 8 % LONDON HAS SE E N T HE
ST RONG E ST INCRE ASE IN P RIME P RICE S
OVE R A 1 0 -YE AR P E RIOD
6.1%
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AT 6 .1 % MIAMI BOAST S T HE HIG HE ST
G ROSS RE SIDE NT IAL YIE LD OF ALL E IG HT
CIT IE S WE ARE COMPARING IN T HIS RE P ORT
GLO BAL D EVELO PM EN T R EPO RT 2015
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GL O B AL
I NF L U ENC E R S
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Our first annual survey of key global developments focusses
on London and New York, two cities where trends are still set
and which act as bellwethers for developers around
the world. We also round up some of the best developments in
the rest of the world
To gain a global perspective of the new
development market we collated the
views of Knight Frank’s residential
development teams across our
global network.
With so many developments coming
through that are worthy of inclusion,
we have restricted our analysis
to those developments where
construction has only recently been
completed, or where completion is
due within the next two years.
L IAM BA I L E Y
GLO BAL H EAD OF RESEARCH
Our benchmark was to select
developments that have been
recognised as “influencers”, whether
in terms of architecture, design, urban
planning or service offering.
With so many developments from
New York and London jostling for
position, we have dedicated our main
four page spread (overleaf ) to these
two cities. Fittingly in March this
year, research in The Wealth Report,
produced by Knight Frank, confirmed
that London is ranked as the leading
city for the global wealthy, with New
York set to supplant it by 2024.
These two cities continue to lead
development trends, in terms of
design, pricing and iconic architecture.
For this reason, we have highlighted
key ‘developments of influence’
for each and added a number of
developments of note from elsewhere
around the world.
As an island, Manhattan’s
key development form has,
unsurprisingly, headed upwards, with
a number of iconic towers on our list.
While new development in London
has a bias towards heritage-led or
regeneration schemes, it too has a
number of high-rise schemes of note.
New York is not ignoring its heritage
either, with a number of low-rise
developments sensitively placed in
Chelsea and surrounding districts.
In terms of delivery of new product,
Manhattan has stepped up a gear
following a lull in prime development
activity at the start of the global
financial crisis in 2008 and 2012.
The city currently has 6,500 new
condo units for sale in more than
100 buildings across Manhattan.
Although this represents a staggering
$30bn in inventory it is still 39%
below that seen in 2007.
London is struggling to meet
housing requirements. Official
forecasts point to a requirement for
50,000 new housing units each year
for the coming decade, but current
delivery is struggling to move above
30,000 units.
The quality of development seen
in Asia and the Middle East is
improving, and future editions of The
Global Development Report will focus
on the key markets in these regions.
G LO BDALEVELO
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PMTEN
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2015
G L OBAL
P MEN
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RT RT2016
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L ON D O N
DEVELOPMENTS
OF INFLUENCE
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The range of current development activity in
central London is extraordinary. In several
areas surrounding the city’s prime locations,
new urban districts are being created, with
the King’s Cross scheme providing a case
study in urbanism. Similar hopes are being
placed on the developments around Nine
Elms and Earl’s Court.
New areas such as South Bank are now
considered part of the prime central
London market, due in part to schemes
of the calibre of NEO Bankside and One
Tower Bridge; while established markets
like Mayfair are being revitalised by
schemes like Clarges Mayfair and One
Grosvenor Square.
Historic buildings are providing a
backdrop for sensitive conversions and
restorations, with The War Office on
Whitehall a leading example.
London’s ability to reinvent itself
appears limitless.
A
D
NAME:
EARLS COURT
DEVELOPER:
CAPITAL AND COUNTIES
YEAR OF COMPLETION:
2016 – 2035
NAME:
KING’S CROSS
DEVELOPER:
THE KING’S CROSS CENTRAL
LIMITED PARTNERSHIP*
YEAR OF COMPLETION:
2020
CIRCA 7,500 RESIDENCES
1,700 RESIDENCES
B
NAME:
ONE KENSINGTON GARDENS
DEVELOPER:
DE VERE ESTATES LTD.
YEAR OF COMPLETION:
2015
E
NAME:
BATTERSEA POWER STATION
DEVELOPER:
THE BATTERSEA POWER STATION
DEVELOPMENT COMPANY**
YEAR OF COMPLETION:
2024
97 RESIDENCES
G
NAME:
ONE TOWER BRIDGE
DEVELOPER:
BERKELEY
YEAR OF COMPLETION:
2017
N/A RESIDENCES
356 RESIDENCES
O
B
F
NAME:
THE OLD WAR OFFICE
DEVELOPER:
THE HINDUJA GROUP & OHL
YEAR OF COMPLETION:
2019 / 2020
P Q
J
K
2,927 RESIDENCES
C
Source: Knight Frank Research
R
A
L
E
G L O B AL D EVELO PM EN T R EPO RT
2016
G
NAME:
MARBLE ARCH PLACE
DEVELOPER:
ALMACANTAR
YEAR OF COMPLETION:
2018
J
NAME:
CLARGES MAYFAIR
DEVELOPER:
BRITISH LAND
YEAR OF COMPLETION:
2017 / 2018
M
NAME:
ROYAL WHARF
DEVELOPER:
OXLEY & BALLYMORE
YEAR OF COMPLETION:
2018
P
NAME:
20 GROSVENOR SQUARE
DEVELOPER:
FINCHATTON
YEAR OF COMPLETION:
2017 / 2018
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04
06
08
10
CIRCA 50 RESIDENCES
34 RESIDENCES
2,500 RESIDENCES
12
36 RESIDENCES
14
H
K
N
Q
NAME:
CANARY WHARF RESIDENTIAL
DEVELOPER:
CANARY WHARF GROUP
YEAR OF COMPLETION:
2020+
NAME:
CAMPDEN HILL
DEVELOPER:
GC CAMPDEN HILL
YEAR OF COMPLETION:
2016 / 2017
NAME:
THE NOVA BUILDING
DEVELOPER:
LAND SECURITIES
YEAR OF COMPLETION:
2016
NAME:
ONE GROSVENOR SQUARE
DEVELOPER:
GROSVENOR SQUARE LIMITED
YEAR OF COMPLETION:
2019
2,500+ RESIDENCES
72 RESIDENCES
170 RESIDENCES
41 RESIDENCES
I
L
18
20
22
24
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R
O
NAME:
ONE BLACKFRIARS
DEVELOPER:
ST. GEORGE
YEAR OF COMPLETION:
2017 / 2018
NAME:
CHELSEA BARRACKS
DEVELOPER:
QATARI DIAR
YEAR OF COMPLETION:
2018
NAME:
NO. 1 PALACE STREET
DEVELOPER:
NORTHACRE
YEAR OF COMPLETION:
2018
NAME:
ST. JOHN’S WOOD SQUARE
DEVELOPER:
ST. JOHN’S WOOD SQUARE
LTD.***
YEAR OF COMPLETION:
2019
274 RESIDENCES
CIRCA 275 RESIDENCES
72 RESIDENCES
104 RESIDENCES
S
NAME:
SOUTH QUAY PLAZA
DEVELOPER:
BERKELEY
YEAR OF COMPLETION:
2019 / 2020
D
791 RESIDENCES
T
NAME:
NEO BANKSIDE
DEVELOPER:
NATIVE LAND
YEAR OF COMPLETION:
2012
N
C
I
T
F
S
H
M
16
217 RESIDENCES
*Argent (King’s Cross) Ltd., London &
Continental Railways Ltd., DHL Supply
Chain and AustralianSuper
** SP Setia, Sime Darby and The
Employees’ Pension Fund of Malaysia
*** Usaha Tegas Group /
Visionar y Properties
Disclaimer: All data is accurate to the
best of our knowledge at the time of
going to print. Please see full disclaimer
on page 27
G L O B AL D EVELO PM EN T R EPO RT
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2016
NEW YORK
DEVELOPMENTS
OF INFLUENCE
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From spectacular trophy assets to new icons
from the world’s leading architects, New
York’s prime new developments have grabbed
headlines around the world in recent years.
Our selection of the city’s top influencers
generates a list of superlatives, from the
tallest residential building in the western
hemisphere (432 Park Avenue) to recordbreaking sales rates (150 Charles Street)
and covers some of the most prestigious
addresses in the city, from Park Avenue, to
Central Park and Madison Square Park.
One57 has proved the city’s post-recession
game changer, leading 57th Street’s
transformation into ‘Billionaire’s Row’
and Rafael Vinoly’s 432 Park Avenue has
irrevocably changed Manhattan’s skyline.
Developments such as 10 Madison Square
West have put new neighbourhoods such as
NoMad firmly on New York’s prime location
map, whilst Four Seasons Private Residences
are among the new luxury landmarks that have
placed the Financial District sub-market firmly
on the radar of wealthy buyers.
J
NAME:
53 WEST 53RD STREET, 53W53
DEVELOPER:
HINES
YEAR OF COMPLETION:
2019
168 RESIDENCES
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NAME:
432 PARK AVENUE
DEVELOPER:
CIM GROUP & MACKLOWE
PROPERTIES
YEAR OF COMPLETION:
2015
NAME:
56 LEONARD STREET
DEVELOPER:
ALEXICO GROUP & HINES
YEAR OF COMPLETION:
2016
NAME:
30 PARK PLACE, FOUR SEASONS
PRIVATE RESIDENCES, NEW YORK
DOWNTOWN
DEVELOPER:
SILVERSTEIN PROPERTIES
YEAR OF COMPLETION: 2016
NAME:
150 CHARLES STREET
DEVELOPER:
WITKOFF
YEAR OF COMPLETION:
2015
102 RESIDENCES
146 RESIDENCES
157 RESIDENCES
90 RESIDENCES
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E
H
L
NAME:
157 WEST 57TH STREET, ONE57
DEVELOPER:
EXTELL DEVELOPMENT & AABAR
INVESTMENTS PJS
YEAR OF COMPLETION:
2013
NAME:
212 WEST 18TH STREET,
WALKER TOWER
DEVELOPER:
JDS DEVELOPMENT GROUP &
PROPERTY MARKETS GROUP
YEAR OF COMPLETION: 2013
NAME:
220 CENTRAL PARK SOUTH
DEVELOPER:
VORNADO REALTY TRUST
YEAR OF COMPLETION:
2018
NAME:
520 PARK AVENUE
DEVELOPER:
ZECKENDORF DEVELOPMENT
YEAR OF COMPLETION:
2017
94 RESIDENCES
47 RESIDENCES
94 RESIDENCES
32 RESIDENCES
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I
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NAME:
11 EAST 68TH STREET,
THE MARQUARD
DEVELOPER:
HFZ CAPITAL GROUP
YEAR OF COMPLETION:
2015
NAME:
145 WEST 11TH STREET,
THE GREENWICH LANE
DEVELOPER: RUDIN FAMILY
& GLOBAL HOLDINGS, INC.
YEAR OF COMPLETION:
2016
NAME:
215 CHRYSTIE STREET
DEVELOPER:
WITKOFF & IAN SCHRAGER
YEAR OF COMPLETION:
2016
NAME:
23 EAST 22ND STREET, ONE MADISON
DEVELOPER:
RELATED COMPANIES
& HFZ CAPITAL GROUP
YEAR OF COMPLETION:
2009 / 2014
27 RESIDENCES
193 RESIDENCES
11 RESIDENCES
67 RESIDENCES
Source: Knight Frank Research,
Douglas Elliman/Miller Samuel Inc.
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Y
L
J ZZ A
Q
06
08
10
12
14
W
N
16
S
19
18
18R
NAME:
10 MADISON SQUARE WEST
DEVELOPER:
WITKOFF
YEAR OF COMPLETION:
2015
20
E
5
K
24
Z
26
F
T
124 RESIDENCES
22
13
M
N
U
V
O
I
NAME:
2 PARK PLACE, THE WOOLWORTH
TOWER RESIDENCES
DEVELOPER:
ALCHEMY PROPERTIES, INC.
YEAR OF COMPLETION:
2016
X
D
P
GO
34 RESIDENCES
P
S
V
Y
NAME:
100 BARCLAY STREET, RALPH WALKER
TRIBECA AT 100 BARCLAY
DEVELOPER:
MAGNUM REAL ESTATE GROUP
& CIM GROUP
YEAR OF COMPLETION: 2015
NAME:
520 WEST 28TH STREET
DEVELOPER:
RELATED COMPANIES
YEAR OF COMPLETION:
2016
NAME:
71 LAIGHT STREET,
THE STERLING MASON
DEVELOPER:
TACONIC INVESTMENT PARTNERS
YEAR OF COMPLETION:
2015
NAME:
111 WEST 57TH STREET
DEVELOPER: JDS DEVELOPMENT
GROUP & PROPERTY MARKETS GROUP
YEAR OF COMPLETION:
2018
161 RESIDENCES
40 RESIDENCES
33 RESIDENCES
60 RESIDENCES
Q
T
W
Z
NAME:
20 WEST 53RD STREET, BACCARAT HOTEL & RESIDENCES
DEVELOPER:
STARWOOD CAPITAL GROUP
& TRIBECA ASSOCIATES
YEAR OF COMPLETION: 2014
NAME:
160 LEROY STREET
DEVELOPER:
WITKOFF / IAN SCHRAGER /
VECTOR GROUP
YEAR OF COMPLETION:
2017
NAME:
527 WEST 27TH STREET, JARDIM
DEVELOPER:
CENTAUR PROPERTIES &
GREYSCALE DEVELOPMENT GROUP
YEAR OF COMPLETION:
2017
NAME:
215 EAST 19TH STREET,
GRAMERCY SQUARE
DEVELOPER: THE CHETRIT GROUP
& CLIPPER EQUITY
YEAR OF COMPLETION:
2017
60 RESIDENCES
49 RESIDENCES
36 RESIDENCES
223 RESIDENCES
R
U
X
ZZ
NAME:
551 WEST 21ST STREET, 551W21
DEVELOPER:
SR CAPITAL (SCOTT RESNICK)
YEAR OF COMPLETION:
2015
NAME:
36 BLEECKER STREET,
THE SCHUMACHER
DEVELOPER:
STILLMAN DEVELOPMENT
INTERNATIONAL
YEAR OF COMPLETION: 2015
NAME:
111 MURRAY STREET
DEVELOPER:
FISHER BROTHERS & WITKOFF
YEAR OF COMPLETION:
2018
NAME:
550 MADISON AVENUE
DEVELOPER: THE CHETRIT GROUP
& CLIPPER EQUITY
YEAR OF COMPLETION:
2018
44 RESIDENCES
20 RESIDENCES
157 RESIDENCES
113 RESIDENCES
G LO BDALEVELO
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G L OBAL
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RT RT2016
GL O B AL
LEA D ER S
Our selection of the 10 top influencers
outside London and New York
exemplifies some of the ‘best-inclass’ for regeneration (Faena House,
Miami), architecture (Shanghai Arch)
and waterfront development (No. One
Sydney and The Royal Atlantis Resort and
Residences, Dubai.).
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Hong Kong’s Opus, completed in 2012 and
designed by Frank Gehry, raised the bar for
prime development in Asia and influenced
a new generation of luxury developments
now evident across the region, most
notably in China and India.
B
Our snapshot is set to expand
significantly in the next five years with
the addition of ambitious projects across
emerging centres in Asia, Australia,
Russia and the Middle East.
C
E
A
A
B
HONG KONG
NAME:
OPUS
DEVELOPER:
SWIRE PROPERTIES
YEAR OF COMPLETION:
2012
SYDNEY
NAME:
ONE SYDNEY, NO.1 ALFRED
STREET
DEVELOPER:
WANDA ONE SYDNEY PTY LTD
YEAR OF COMPLETION:
2021
12 RESIDENCES
184 RESIDENCES
D
E
F
DUBAI
NAME:
THE ROYAL ATLANTIS RESORT
AND RESIDENCES
DEVELOPER:
KERZNER INTERNATIONAL &
INVESTMENT CORPORATION OF DUBAI
YEAR OF COMPLETION:
2018
MONACO
NAME:
TOUR ODEON
DEVELOPER:
GROUPE MARZOCCO
YEAR OF COMPLETION:
2014
SHANGHAI
NAME:
SHANGHAI ARCH
DEVELOPER:
SUN HUNG KAI PROPERTIES
YEAR OF COMPLETION:
2014
MADRID
NAME:
FOUR SEASONS MADRID
DEVELOPER:
GRUPO VILLA MUR &
OHL DESARROLLOS
YEAR OF COMPLETION:
2016
230 RESIDENCES
73 RESIDENCES
201 RESIDENCES
28 RESIDENCES
G
H
J
I
MIAMI
NAME:
FAENA HOUSE
DEVELOPER:
FAENA GROUP
YEAR OF COMPLETION:
2017
MIAMI
NAME:
THE SURF CLUB
(FOUR SEASONS RESIDENCES)
DEVELOPER:
FORT CAPITAL
YEAR OF COMPLETION:
2016
VANCOUVER
NAME:
VANCOUVER HOUSE
DEVELOPER:
WESTBANK
YEAR OF COMPLETION:
2014
BEIJING
NAME:
NO.8 ROYAL PARK
DEVELOPER:
HOPSON DEVELOPMENT
HOLDINGS LIMITED
YEAR OF COMPLETION:
2014
47 RESIDENCES
121 RESIDENCES
500 RESIDENCES
500 RESIDENCES
Source: Knight Frank Research
EVELOPM
PMEN
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EPORTRT 2016
2015
GGLO
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A D D I N G V A L UE
TO THE
D EV EL OPME NT
CH A I N
B Y AND R E W S HI R L EY,
GLO BAL D E V E L O PM E NT R EP ORT ED I TOR
Location, location, location
is the real-estate agent’s
mantra, but even the most
sought-after address won’t
guarantee a rush of sales if
the product is wrong. Knight
Frank’s integrated approach
helps developers to build the
most desirable homes, while
maximising returns
“The global high-net-worth property
buyer has never been more discerning
or educated, or had more choice,”
says Ian Marris, who heads up
Knight Frank’s London Residential
Development Team, and has been
involved with many of the city’s most
iconic residential developments.
To attract this kind of buyer, luxury
developments clearly need to
be best-in-class, but developers
also need to keep sight of their
ultimate goal, which, of course,
is profit optimisation, not purely
capital receipts.
“Understanding value creation is
fundamental to Knight Frank’s role
as a development consultant, and we
have years of experience at the very top
end of the market,” Marris explains.
“Location is indeed a key driver of value,
however we believe value is created in
many layers and must be interrogated at
every level.”
These layers start from the ‘sense
of arrival’ that a development gives
owners or guests, through to internal
spatial arrangement, specification,
service and branding of the
residences. “Only where attention
to detail is given to every single
one of these layers will residential
developments achieve their optimal
sale prices,” Marris adds.
Creating value through specification,
for example, is about more than just
selecting expensive materials, he says.
“It is created through an
understanding of the layers of detail
that comprise luxury accommodation
and what are the key areas of focus
that drive significant value, and what
are the nice-to-have extras that, in
reality, don’t.
“It is also important to remember
that decisions made at the outset of
a project can have a profound impact
further along the chain,” adds Marris.
“Before you do anything else you need
to have a deep understanding of your
target market and and its attitude
towards property,” he says. Given
the increasing mobility of wealthy
individuals, this will invariably require
a global approach.
“Knight Frank’s development experts
are often called in to help developers
around the world who have a good site
and some good ideas, but haven’t really
considered the tastes and requirements
of their potential buyers, and who really
want to understand what the very best
projects are doing to appeal to highnet-worth individuals. “We track the leading projects and,
not only can reference the latest
approach on amenity and service
provision, but also, through our sales
team’s day-to-day interaction, advise
developers exactly what their target
buyers are prioritising.”
Space planning, for example, may not
sound very glamorous, but it is the key
value driver for any new development.
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S US A N D E F R A N A
I AN M ARRI S
PR E S I D EN T & C EO , DO UG L A S EL L I M A N *
DEVEL O P M EN T M A R KETI N G
H E A D OF
D E V E L OP M E N T CON SU LTA N CY
“
DEC I S I O NS M A D E AT T H E O U T SE T
OF A PROJ EC T C A N H AV E A P R O F O UN D
IMPAC T FU RTH E R A L O N G T H E C H A I N
”
“Approaching the creation of a
development from the inside out is
very important. Having the right mix
of apartment sizes and understanding
what makes the perfect living space for
your potential buyer is crucial.
“We’ve found that an increasing
proportion – at least 60 per cent – of
the accommodation should be focused
on the principal occupant, with the
master bedroom suite accounting for
about a fifth,” says Marris.
New York-based Susan de França,
president and CEO of Knight
Frank associate Douglas Elliman
Development Marketing, agrees:
“While it is the architect that is
ultimately responsible for the form
of a scheme, we work closely with the
design team to ensure the residential
layouts and designs are informed by
the needs and desires of the end users.
* K
night Frank’s residential
alliance partner in the United States
“While the architectural form of a scheme
is a value driver, equally important is
that the interior finishes and layouts
are thoughtfully conceived to create
truly distinctive residences. You need to
approach the development of a building
from the inside out as well as outside in.
“Our integrated approach also
includes researching comparable
schemes on a global platform,
informing pricing levels for a
development. The most significant
value results from the consultancy
team working closely together, from
concept to closing,” adds de França.
“When we launch a property,
our sales team is confident in the
product and understands that there
has been a distinctive focus on the
needs and aspirations of the target
audience throughout the entire
development process.
“Given the broad demographic
of global buyers, we understand
that today’s ultra-high-net-worth
individuals are more discerning
than ever. They have proven to
the marketplace their willingness
to pay a premium for outstanding
architecture and interior design, and
unparalleled services and amenities,
thereby providing our developers
maximum sales volumes and returns.
“It means we can honestly say to
potential buyers that the development
isn’t just in a great location, but it
provides the kind of accommodation
and amenities that they are looking for,
at a price that will enable our developer
clients to make a good profit.”
SEE OVERLEAF FOR
DEVELOPMENT CASE STUDIES
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GLOBAL
INSIGHT
Members of Knight Frank’s
Residential Development
teams from around the
world highlight how they
are adding value to projects
T HE F OUR
SEASONS PRI VAT E
RESI DENCES, MADRI D
S U S AN D E F R A N A
MAR IA MOR R IS
MAD E L AIN E L UN D GREN
NEW Y O RK
P R ES IDEN T & C EO , DOUG L AS EL L I MAN*
DEV ELO P MENT MARK ET I NG
MIDDL E E AS T AN D N ORT H AF R I CA
HE A D OF P R OJ E CT M A R K E T I N G
S Y DN E Y
H E A D OF P R OJ E CT M A R K E T I N G
ONE ELEVEN MURRAY ST REET
A 6 4-S TO R EY GLAS S TOWER I N T HE T RI B ECA
AR EA O F NEW YO R K DESI G NED B Y K OHN
P EDER S EN FOX ASSOCI AT ES
T HE R OYAL AT L AN T I S
RE S ORT & R E S I DE N CE S , DUB AI
A K ERZ NER D E V E L OP M E N T ON T H E PA L M W I T H
231 APA RT M E N T S A N D A N 800- K E Y H OT E L
T H E PA L M J U M E I R A H
S UPE R -PR I M E DE V E L OPM E N T S
I N L ON DON AN D S Y DN E Y
We meticulously considered the unit
mix of the development in order to
create a diverse range of product across
the building, including placing a series
of larger units on lower levels as a value
play, as well as premium two-bedrooms
on higher floors, allowing us to cater to
a broader range of potential purchasers.
Throughout the pre-development
process, we ensured that 111 Murray
Street would bring a calibre of property
more typically found in uptown
Manhattan to Tribeca, to not only meet
but exceed the high expectations of
uptown buyers looking to relocate.
The Royal Atlantis will be the first truly
super-prime development in Dubai. The
emirate is home to over 200 different
nationalities so our understanding of
the global super-prime market has been
crucial. To cater to the tastes of our
international high-net-worth clients and incorporating our expertise from the
best-in-class schemes globally - we have
worked tirelessly with the developer
to create 65 individual layouts. This in
itself has set The Royal Atlantis apart
from other developments by designing
from the inside out - with the focus being
on the quality, high specification and
attention to detail that will attract buyers
from all over the globe.
Sydney’s residential development sector
is undergoing a real step change as a huge
influx of funds from Chinese and other
Asian developers pushes up site values
and brings new products to the market.
*K night Frank’s residential alliance
partner in the United States
I have previously worked on some
of London’s most iconic luxury
developments, including Chelsea
Barracks and Southbank Place, with
Qatari Diar, the investment arm of
Qatar’s sovereign wealth fund, and
also One Nine Elms for Dalian Wanda,
China’s largest developer. So I can see
that brand creation and tailoring these
developments to the needs of the global
ultra-high-net-worth buyer will become
increasingly important
as competition increases.
03
T HE ROYAL AT L A N T I S R E SORT
AND RESI DE N CE S, D U B A I
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A L BE R T O C OS T IL L O
ME R IAM MAKIYA
M ADR I D
HE A D OF P R I M E R E SI D E N T I A L
L ON DON
PA RT N E R , R E SI D E N T I A L D E V E L OP M E N T
FO UR SEA S ON S PR I VAT E R E S I DE N CE S M ADR I D
L UXURI OU S R E SI D E N CE S B Y F OU R SE A SON S
HO T E L S A N D R E SORT S A B OV E
A N E W F I V E - STA R H OT E L
CHE L S E A B AR R ACKS , L ON DON
A 13- A CR E QATA R I D I A R D E V E L OP M E N T
OF 275 A PA RT M E N T S A N D
T OW N H OU SE S W I T H SE V E N N E W
GA R D E N SQU A R E S
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Part of the ground-breaking Canalejas
mixed-use scheme, this is the first
residential development in Spain
with all the services of a five-star hotel
and will appeal to many different
nationalities. Our understanding of the
global super-prime market has been
crucial in promoting the project and
we introduced the renowned interior
designer Luis Bustamante to create
layout options with the necessary
interior finishes. Placemaking for this
increasingly fashionable location was
an important part of our marketing
strategy for this exciting luxury
destination in the historic heart
of Madrid.
Knight Frank has been involved on a
consultancy basis with this development,
which is Qatari Diar’s flaghip UK project,
since its inception in 2005. Working
closely with the developer and architect
we have helped to create a unique
product that is set to deliver exactly
what the market has been looking for –
a low density development with a large
proportion of green space, archetypal
London architecture and a sense of
community. The interest we have
received so far backs up the success of this
approach with a significant proportion of
enquiries coming from potential buyers
based in the UK and looking to make
Chelsea Barracks their primary residence.
N EAL S R O KA
RE N U BUD HR AN I
MUD AS S IR ZAID I
C AR IBBEA N
DO U GLAS EL L I MAN
DEV ELO P MENT CONSULTANCY
HON G KON G
HEA D OF R E SI D E N T I A L A GE N CY
I N DI A
N AT I ON A L D I R E CT OR R E SI D E N T I A L
M ALLI OU H ANA , A NGUILLA
LIMITED C O LLEC TION OF B EACH- F RONT
V ILLAS O N MEAD’S B AY
SUPE R -PR I M E DE V E L OPM E N T S I N
HO NG KON G AN D M AI N L AN D CHI N A
L ODHA W OR L D T OW E R S , M UM B A I
T H R E E U N I QU E LY CU R V I L I N E A R GL A SS A N D
ST E E L T OW E R S, I N CL U D I N G W OR L D O N E ,
T H E W OR L D ’ S TA L L E ST R E SI D E N T I A L
T OW E R AT 423M
Malliouhana was recently acquired by
a Chicago-based developer as a joint
venture with Auberge Resorts. After
undergoing an $80 million renovation
the strategy was to sell a portion of the
land in a residential offering of beachfront villas. Working closely with the
developer and using our expertise,
we determined the market was in
need of a collection of intimate villas,
a tremendous addition to the hotel
programme. We were an integral part
of the redesign and placement of the
villas, resulting in a greater return on
investment for the developer.
The arrival of the Frank Gehry designed
12-storey Opus development in Hong
Kong – the architect’s first residential
project in Asia – set a new benchmark
for super-prime developments in the
region, one that bears comparison with
global icons like One Hyde Park, and one
that a leading Chinese developer has just
announced it wants to emulate in Beijing.
Knight Frank’s extensive experience of
selling luxury properties in Hong Kong
and its extensive portfolio of consultancy
work on prime mixed-use projects in
Mainland China, combined with its
unique global super-prime expertise,
provides developers looking to target
ultra-wealthy buyers with a unique
resource to help maximise their returns.
We have been using our experience to
sell this unique 17-acre development on
the Golden Mile at Upper Worli, south
Mumbai’s most prestigious address, in
a focused manner to domestically and
non-resident-based Indians and have
been among the top-selling partners
for the Lodha group. Our relationship
with Lodha was instrumental in them
using our expertise to help buy the
Canadian High Commission building
at Grosvenor Square, London.
SEE OVERLEAF FOR KNIGHT FRANK'S
10-STEP DEVELOPMENT PATHWAY
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THE 10 STEPS TO
MAXIMISING RETURNS
Attention to detail at every stage
of the development process helps
Knight Frank’s consultants build
the best returns for developers
Creating a development that not only
sells well but also makes a good return
for its developer doesn’t generally
come about by luck, but will be down
to meticulous planning throughout
the lifetime of the project.
The development pathway
illustrated on this page highlights
the 10 key stages Knight Frank’s
development consultancy and
marketing experts will split a project
into, from concept to sales. Every
stage will have a significant bearing
on the overall viability of the scheme.
26
Although the internal and external
look and feel of the development is
what will eventually attract buyers,
a lot of work will have been done
before an architect or interior
designer even put pen to paper.
Much of the development process
is devoted to rigorous analysis and
market research into the potential
target audience and pinpointing the
exact product they are looking to buy
and what price they are likely to pay.
Following the development
pathway and getting the concept
right from the very beginning of
the project is therefore crucial for
maximising returns.
THE VALUE ADD PROCESS
1
2
3
4
CONCEPT
P H AS E
R E SE AR C H
DESIGN
& B RIEF
PLACEMAKING
Land use
Market analysis
Vision
Messaging and promotion
Unit mix
Practical experience
Objectives
Land use integration
Context
Community
Leadership
Social responsibility
10
5
S AL E S
PLAN PHASEINITIAL
PROFITABILITY
Strategy
Review
Pump prime
9
Schematic testing
Building relationships
Horizontal v
Ver tical integration
8
7
6
MARKETING
BUILD
PHASE
PLAN PHASEDETAIL
VIABILIT Y
Campaign Structure
Innovate
Design
Deliverability
Branding
Sustainability
Review
Phasing
Collateral
Scale
Deliver
Funding
OCCUPATIONAL
DEMAND &
INVESTMENT
By tracking capital growth, levels of
occupancy and rental income, investors are
able to gauge their portfolio’s performance.
Below we provide these key indicators on
a city-by-city basis
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05
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09
11
13
PRIME RENTAL GROWTH 12 MONTHS TO Q1 2015
15
TYPICAL PRIME GROSS YIELD* Q1 2015
17
19
| 2.3%
FINANCIAL AND BUSINESS SERVICE SECTOR EMPLOYMENT
NUMBER OF PERSONS EMPLOYED
One of the key factors
driving investment is the
sustainability of tenant
demand. As a proxy for this
we have collated statistics on
business and financial sector
employment levels over the
past decade, showing the
relative resilience of each
sector through the global
financial crisis.
Source: Knight Frank Research, ONS,
New York State Department of Labor,
Hong Kong Census and Statistics
Department, Singapore Ministr y
of Manpower
Numbers indicated reflect the approximate
number of persons employed in the Business
Services, Financial and Insurance Services, and
Information and Communications sectors as at
each year end.
CITY
2005
2009
2014
LO N DO N
1,215,000
1,282,000
1,556,000
N EW YO RK
919,700
930,300
1,057,900
HONG KONG
597,000
684,200
809,400
SIN GAP O RE †
443,000
645,300
850,000
GREAT ER SYDN EY
850,000
445,000
445,000
DU BAI
N/A
N/A
43,196
†
Hong Kong***| 2.1%
| 2.6%
Sydney ***Hong Kong data relates to a Class E property
| 2.8%
| -4.9%
**Singapore gross yield is based on high-end
non-landed private residential projects (top 10%
of the overall Singapore non-landed residential
market by average psf transaction prices in 2012
(excluding ultra-luxury developments) and located
in the Core Central Region
-6
New York | 1.4%
| 2.5%
Singapore
| 4.0%
Sydney Dubai | 5.9%
New York London Hong Kong*** | 2.2%
| 7.3%
| 5.9%
-6
-4
| 2.9%
*Based on a 2 bedroom, 2 bathroom apartment
120 sq m in size in a prime central location
(excluding Singapore)
-2
Dubai -4
0
London Source: Knight Frank Research,
Douglas Elliman/Miller Samuel Inc.
2
| 5.4%
-2
27
4
Singapore** | 3.1%
0
25
| 6.1%
2
23
6
Los Angeles
4
21
8
Miami 6
Miami Source: Knight Frank Research,
Douglas Elliman/Miller Samuel Inc.
Although rental growth in
all our markets has been
positive over recent years,
much stronger capital value
growth has squeezed yields,
meaning investors are
looking hard at the prospects
for individual developments
to maximise occupancy.
8
Los Angeles
With capital growth in most
key markets rising strongly
over the past five years,
but now starting to slow,
investors are focussing more
heavily on a development’s
rental performance. In the
12 months to Q1 2015 Los
Angeles, Miami, New York
and London were among the
strongest performers, a trend
highlighted in our quarterly
Prime Global Rental Index.
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F U T URE SU P P L Y
H O TSPOT S
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Future gazing: Knight Frank casts light
on shifting city development opportunities
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Ascertaining where new development opportunities exist is a challenging
task when you know a city well, but almost impossible from a distance.
Using the knowledge and insight of our global research teams, we have
illustrated over the next few pages those sub-markets within our global
cities that are set to see some of the strongest levels of new supply. The
majority of these areas, from Long Island City in New York to The City
Fringe in London are set to see development increase, either as a result
of new infrastructure, a change in use from a commercial to a residential
bias or because of shifting socio-demographic trends.
KATE EVERETT-ALLE N
HEAD OF INTERNATIONAL
RESIDENTIAL RESEARCH
10
8
9
3
2
5
4
1
ALL RESIDENTIAL COMPLETIONS,
HONG KONG
2009 - 2015
6
30,000
7
25,000
20,000
15,000
HO N G K O N G
10,000
5,000
S HOUS ON HIL L
& R EPUL S E BAY
4
J A R D I N E’ S L O O KOUT
7
S TA NL EY
8
CL EA R WATER BAY
10
SAI KUNG
2015*
6
M I D - L E VEL S W E S T
0
2014
M I D - L E VEL S E A S T
3
HO MAN T IN
2013
2
9
2012
POK FU L A M
2011
5
2010
TH E P EA K
1
2009
26
Source: Hong Kong Rating and
Valuation Department
*Estimate
SYDNEY
2
1
05
BARANG AROO
& WALSH BAY
07
2
CIRCULAR QUAY
11
3
MILSONS P OINT
13
4
BONDI
1
3
03
09
15
17
ALL RESIDENTIAL COMPLETIONS,
GREATER SYDNEY**
2009 - 2015
19
21
23
30,000
25
25,000
27
20,000
15,000
10,000
5,000
2014
2013
2012
2011
2010
2009
2015*
0
4
Source: Knight Frank Research,
ABS, Cordell Connect
*Estimate
**Data relates to apartments only
SI N G APO R E
1
D O W N TO W N COR E
5
NOV ENA
9
2
R I VE R VA L L E Y
6
OR CHA RD
10
3
TA N G L I N
7
BUKIT TIM A H
4
ROCHOR
8
NEWTON
MUSE UM
SING AP ORE RIVE R
ALL RESIDENTIAL COMPLETIONS,
SINGAPORE
2009 - 2015
30,000
25,000
20,000
15,000
10,000
5,000
3
2015*
2014
2013
2012
9
2011
2009
5
7
2010
0
8
4
1
6
10
2
Source: Urban Redevelopment Authority
*Estimate
Completions data = difference between
the available stock of private residential
units (landed and non-landed) as at Q4
compared with same number as at Q4 of
the preceding year
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A R EA S S U R R O UND ING
TH E DUB A I WATER
CANAL PROJECT
20
4
DUB A I H I L L S E STATE
15,000
10,000
5,000
0
4
Source: REIDIN, Knight
Frank Research
*Estimate
ALL RESIDENTIAL COMPLETIONS,
GREATER LONDON
2009 - 2015
LO N D ON
30,000
1
A C TO N
8
KING’ S CR OS S
14
CANARY WHARF E STAT E
2
O L D O A K C O MM ON
9
EUS TON
15
G RE E NWICH
20,000
ROYAL DOCKS
15,000
WOOLWICH
3
E A R L S C O U RT
10
CITY FR INGE
16
4
B AY SWATER
11
DALSTON AND HACKNEY
17
5
N I N E EL M S
12
6
VI C TO R I A
OLYM PIC PA RK
A ND S TRATFOR D
7
M AY FA I R
13
TOTTENHA M HALE
25,000
10,000
5,000
2015*
2014
2013
2012
2011
0
2010
26
M O H A M M E D BIN R A S HID
C I TY – DI STR I CT ONE
20,000
2009
24
3
25,000
2009
22
30,000
2015*
D U B A I C R EEK HA R BOUR
2014
18
1
2013
16
2012
14
D U BAI
2011
12
2010
10
2
ALL RESIDENTIAL COMPLETIONS,
DUBAI
2009 - 2015
Source: DCLG
*Estimate
13
11
9
8
12
2
10
1
4
7
14
6
15
3
5
03
05
07
1
09
11
13
15
3
17
19
21
23
25
27
9
6
5
4
3
2
7
1
8
NEW YORK
16
1
FINA NCIA L D IS TRICT
7
WILLIAMSBURG
2
M EATPA CKING DIST RICT
8
DUMBO
ALL RESIDENTIAL COMPLETIONS,
NEW YORK CITY
2009 - 2015
3
L ONG IS L A ND C IT Y
9
4
30,000
CHEL S EA HIGHLINE
E AST OF SE COND
AVE NUE (NE W SUBWAY)
5
HEL L’ S KITCHEN
6
W57TH COR RIDOR
25,000
20,000
15,000
10,000
5,000
17
2015*
2014
2013
2012
2011
2010
2009
0
Source: New York City Department
of City Planning
*Estimate
Figures include Final Certificates of Occupancy
and Temporary Certificates of Occupancy
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Two influential figures in the
development world share their views on
the latest influences shaping the sector
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and the Industrial Revolution.
As then, the result has been increased
income disparity and the emergence of a
globally mobile population of ultra-wealthy
individuals. This trend has only been
exacerbated by the global financial crisis,
which, unlike most recessions, squeezed the
middle and lower classes, while by and large
benefiting the wealthy.
16
18
20
22
26
TREND
24
As a result, at the top end of the market,
while property buyers have never had greater
purchasing power, they have also rarely been
more aware of the scrutiny to which the socalled “1 per cent” are subjected.
R O B ERT LYLE
THE L UXURY LIFE ST YLE AND
BRA ND CONSULTANT
It is easy to default to simplistic buzz words
and acronyms when discussing trends in the
super-prime development sector or, indeed,
any other kind of luxury good for that matter.
‘Authentic’, ‘experiential’ and ‘eco-friendly’
are all current favourites.
Financial demographics inevitably map
onto luxury consumption patterns and by
implication the super-prime development
sector. Therefore, in order to obtain a clearer
picture of where that market is heading, one
needs to understand the socio-economic tides
and the currents within them that are shaping
the ways in which the wealthy consume.
“
LUXURY SEEKS RARITY,
AND IN A GLOBAL ISED WORL D
CULTURAL D IF F ERENCE
IS INCREASINGLY SCARCE
”
Since the fall of Berlin Wall in 1989, which
broadly coincided with the advent of the
internet, we have seen wealth creation on a
scale unparalleled since the era of colonialism
As a consequence, while the wealthy have not
stopped consuming luxury goods and services,
they are increasingly looking to express their
wealth and taste in a more subtle and focused
way through knowledge and culture. A small
painting by a known artist, a simple welltailored suit or a platinum Patek are good
examples of items that while superficially
unostentatious are immediately recognisable
to those in the know.
The same applies to developments. As buyers
become more sophisticated, they need the
security of a “starchitect”, or brand, a lot
less. They are more focused on acquiring
residences that are at once quintessential of
their location – people want to wake up and
know where they are – impeccably serviced
and project their own taste.
Inevitably, luxury seeks rarity, and in
a globalised world cultural difference
is increasingly scarce. It is therefore
important for new developments to
preserve, not sweep away, the integrity
and traditions of the local environment,
community and lifestyle.
Of course these broad tides and currents
combine and interact with local eddies in
different locations. However, it has never
been more important, or more difficult,
for developers to understand the changing
dynamics and motivations of their buyers
and to develop subtle and nuanced products
and associated narratives to appeal to them.
ROBE RT LYLE IS CHAIRMAN OF P RCO
be retrofitted to a building at any stage, but
the more fundamental features have to be
incorporated into its DNA from the outset.
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15
SETTER
Two contrasting buildings that epitomise
this new contract between designer and
occupier in my hometown of New York are
432 Park Avenue and West 57.
03
17
“
ARCHITECTS ARE COMING
D OWN F ROM THEIR
IVORY TOWERS
”
MARC K U S H N E R
TH E A RCHITECT
Striking architecture and the involvement
of a big-name architect have long been used
to sprinkle some fairy dust over residential
development projects, adding status and
sometimes even elevating a building to
icon status.
I don’t see this trend changing; if anything,
the role of the architect is becoming an
ever-more intrinsic part of the marketing
process for new developments, but what I
see evolving is a far greater regard for the
end user in the design process.
We are starting to see a better balance – dare
I say it, but architects are coming down from
their ivory towers – being struck between
creating a building at a city level – its impact
on the skyline and its relationship with the
buildings around it – to designing something
that adds, at a human scale, a long-term value
and amenity for its users.
This value is ultimately, I think, greater
for the resident than more lifestyle
amenities such as spas and butlers, highly
desirable though they may be. These can
From the outside both are unflinching in
announcing their presence – the Rafael
Vinoly-designed 432 Park is the tallest
residential building in the western
hemisphere – but the points where they
touch human beings have also been
carefully considered.
At 432 Park, for example, Vinoly has created
a new kind of space with his use of a single
10ft by 10ft piece of glass in each window
that also doubles as a highly covetable
seating area.
West 57 is as far from a typical skyscraper
as you can imagine. Designed by the Danish
architecture firm Bjarke Ingels Group, it
marries the concept of a skyscraper with the
European perimeter block model – a ring of
low-density housing around a courtyard.
This has formed a new kind of
democratically shared social space and
green sanctuary in the heart of the city. All
600 apartments also have bay windows or
balconies allowing their residents access
to the outside world in a way not usually
associated with this kind of development.
The concepts may sound simple, but
achieving them in buildings of this scale is
incredibly complex.
M A RC KUSHNE R IS CO-FOUNDE R OF
A R CHIT E CT URE FIRM HOLLWICH KUSHNE R
A ND CE O OF ARCHIT IZE R.COM
19
21
23
25
27
GLO BAL D EVELO PM EN T R EPO RT 2015
02
04
06
08
MARKET SIZE
& PERFORMANCE
By gauging the size and recent performance
of luxury residential markets, developers
and investors can make informed decisions
as to where future opportunities lie
10
12
NUMBER OF SALES BY PRICE BRACKET 2009 V 2014
|
2014
London
5,000
5,000
1,638
1,888
US$2M-US$5M
| 151
| 258
Singapore* | 107
Singapore* | 74
Dubai | 12
Dubai | 46
Miami | 12
Miami | 55
Los Angeles | 5
Los Angeles | 21
Sydney
Sydney
Manhattan
|
796
|
476
London
|
523
|
London
Manhattan
142
|
Los Angeles
286
55
|
Miami
|
76
|
Dubai | 257
Los Angeles | 23
0
Dubai
*Singapore: Sales volumes are based on
the total number of caveats lodged for
island-wide private non-landed residential
units: new sale, resale and subsale
3,000
Hong Kong | 388
Hong Kong | 596
|
Sydney
674
|
Sydney
|
1,177
1,455
|
Miami
1,000
Singapore*
2,000
Manhattan
|
4,000
Singapore*
|
1,766
2,147
Manhattan
3,000
|
4,000
2,721
6,000
Notes: Exchange rates calculated as at
31 December 2009 and 2014
Dubai: Due to data availability, Dubai
figures for 2009 correspond to 2010,
Manhattan: Condo and Coop sales only,
Miami: Condo sales on Miami Beach
and the Mainland only, LA: Condo
sales only
2009
2014
7,000
London
Source: Knight Frank Research
2009
6,000
2,498
26
7,000
2,287
24
|
22
|
20
London’s prime market
stands out both in terms
of the volume of prime
sales and the scale of its
expansion since 2009. Hong
Kong and Singapore are
the only two cities to have
seen their prime markets
(US$2m-US$5m) shrink,
an impact of the stringent
cooling measures imposed
since late-2009.
Hong Kong
18
Hong Kong
16
6,250
14
US$5M+
PRIME PRICE GROWTH Q1 2015
Cities such as London,
Singapore, Hong Kong,
and to some extent New
York, provide a picture of
uniformity with bubbles
growing in size and evenly
spaced, suggesting an
incremental pace of growth
over the last 10 years. For
Miami, hit hard post-2008,
its five-year performance
exceeds its 10-year
equivalent. One to watch is
Sydney which has recorded
the same level of price
growth (7%) over the last
12 months as it has over the
past five years.
Source: Knight Frank Research,
Douglas Elliman/Miller Samuel Inc.
Notes: Price data for Singapore
corresponds to apartment and
condominium housing only in the CCR.
Price data for Hong Kong and Sydney
corresponds to apartments only.
10 YEAR
5 YEAR
LONDON
1 YEAR
NEGATIVE 1 YEAR PRICE GROWTH
NEW YORK
MIAMI
150%
120%
90%
60%
91%
78%
138%
45%
40%
30%
42%
0%
-30%
3%
12%
-6%
2,000
1,000
0
TYPICAL PRICE BANDS Q1 2015
LOS ANGELES
DUBAI
15
17
19
21
23
25
| 1,300 - 1,500
Los Angeles
Sydney | 2,600 - 3,100
27
Singapore | 2,000 - 2,400
| 800 - 1,000
2,000
13
1,000
0
0
SINGAPORE
SYDNEY
HONG KONG
93%
N/A
69%
68%
53%
45%
8%
7%
-1%
Dubai | 800 - 1,000
1,000
3,000
Dubai | 600 - 700
Notes: Price data for Singapore
corresponds to apartment and
condominium housing only in the CCR.
Price data for Hong Kong and Sydney
corresponds to apartments only.
Los Angeles | 800 - 1,000
Source: Knight Frank Research,
Douglas Elliman/Miller Samuel Inc.
Miami
2,000
4,000
Singapore | 1,400 - 1,700
Hong Kong | 2,600 - 3,200
5,000
Sydney | 2,000 - 2,400
3,000
| 2,600 - 3,200
4,000
New York
5,000
| 3,100 - 3,800
6,000
London
6,000
11
Miami | 2,700 - 3,300
7,000
09
Hong Kong | 4,300 - 5,200
7,000
07
| 5,500 - 6,500
8,000
-4%
03
05
London
8,000
TYPICAL SUPER-PRIME PRICE BAND (US$/SQ FT)
| 6,000 - 7,300
TYPICAL PRIME PRICE BAND (US$/SQ FT)
New York
Hong Kong, London and New
York stand apart from the
other cities when it comes
to luxury prices. At the superprime level, however, Miami
is starting to erode their lead
with values now nudging
US$3,300 per sq ft.
17%
25%
7%
6%
7%
GLO BAL D EVELO PM EN T R EPO RT 2015
02
04
06
08
10
12
14
16
18
20
22
24
26
LAS T
WO RD
With New York and London providing our central
focus for this edition of the Global Development
Report, we asked two leading developers to share
their thoughts on these critical markets.
Where or what is the next big
opportunity area?
What is the biggest challenge to
development profitability?
Richard Wallgren: Midtown continues
to develop new product along 57th
Street, Central Park South and eastward
along Lexington and Third Avenues. In
addition FIDI (the Financial District)
is seeing significant growth with the
opening of the new World Trade Center.
Richard Wallgren: Increased cost
of land and the shortage of qualified
labour supply, which is pushing
construction costs higher. The
reliance on very wealthy international
buyers may be waning due to global
economic and political uncertainty.
Alasdair Nicholls: There is a huge
amount of opportunity for developers
who work to create a sense of place in
London, which is still a city of villages.
Delivering schemes that enhance these
unique urban building blocks should be
a real focus for the industry.
Alasdair Nicholls: The issue is
threefold – price resilience following
strong performance since 2009,
build costs, and increasingly delays
to delivery - whether planning or the
capacity of the construction sector.
With more projects coming on
stream, how can developers
differentiate their product?
When creating a new project where
do you look to for inspiration?
Richard Wallgren: Quality of design
is of paramount importance. Also
sensitivity to unit mix is critical to
appeal to a broad base of consumer
requirements, with a trend in favour of
smaller units in some new projects.
Richard Wallgren: Manhattan has
been the home of luxury apartments
for over a century. We carefully study
successes from the past. For instance,
at 432 Park Avenue, we analysed the
layouts of apartment houses along Park
Avenue and Fifth Avenue that were
designed by Rosario Candela.
Alasdair Nicholls: The main challenge
is in the big set-piece regeneration
zones in London. These are critical
to get right to ensure we deliver the
housing we need. Examples like Earls
Court and Southbank Place (former
Shell Centre) show how a visionary
masterplan can aid this process.
Alasdair Nicholls: We look across
the development sector, best-inclass examples in the hotel and office
sectors, as well as residential. The
world’s gateway cities like New York
are important, but there is a lot to learn
from the quiet, efficient, human-scale
European urbanism.
NEW YORK
R I CH A R D WA L L GR E N IS EXECUTIV E VICE
PRES ID ENT OF S A L ES A ND M A RKETING
AT M A CKL OW E PR OPERTIES
LONDON
A L A S DA I R NI CH O L L S IS CO-FOUN DE R
A ND CHIEF EXECUTIV E OF NATIV E LAND
Are there any particular new trends
that we’ll be seeing in developments
over the next five years?
Richard Wallgren: I think there will be
less speculation in the luxury market;
buyers are increasingly looking for
homes. The attractions of New York,
security, stability and economic growth
will act to draw in demand.
Alasdair Nicholls: One of the biggest
shifts we have seen is the rise in demand
for fully serviced developments.
Older occupiers in particular are
moving to live more centrally and
are more footloose. They appreciate
the management and service that is
increasingly embedded into schemes.
Which of your projects have you
found the most rewarding?
Richard Wallgren: My career has
evolved as the market has changed; I
have enjoyed all of them. Each project
has had a different flavour: from the
Time Warner Center, a major urban
renewal project, bold and multi-purpose
oriented; through to 432 Park Avenue, a
crisp modern design by Rafael Vinoly.
Alasdair Nicholls: Every scheme we
have taken on starts with a simple
question – would we live here? If not,
we don’t do it. For that reason it is
difficult to pick favourites from awardwinning schemes likes NEO Bankside
to smaller more bespoke schemes like
Bishop’s Square. The opportunity to
add something of quality to London’s
fabric is the real reward.
CO N T ACT S
E U R OP E, U S AN D CA R I BBE A N
P RESS ENQUIRIES
PADDY DRING
[email protected]
Head of International Residential
+1 212 891 7189
+44 20 7861 1061
[email protected]
[email protected]
+1 212 891 7735
USA
To view our global selection of new homes for sale visit
www.knightfrank.com
SUSAN DE FRANÇA
President & CEO Development Marketing
Douglas Elliman
[email protected]
+1 212 891 7102
DEFIN IT IONS A ND A C K NOW L E DGE M E N TS
GLOBAL DEVELOPMENT
REVIEW 2015
COM M I S S I ONED B Y
E DI TO R
WR I TTEN B Y
R E S E A R CH
Andrew Hay
Andrew Shirley
DEFINITIONS
PRIME PROPERTY
Knight Frank
Research
Liam Bailey
Kate Everett-Allen
PU BL I S H ED BY
M A R K E TI NG
D ES I G N B Y
I L L U S TR ATI O NS
Raconteur
The Surgery
Jenny Stokes
The most desirable and most
expensive property in a given
location, generally defined as
the top 5% of each market by
value. Prime markets often have
a significant international bias
in terms of buyer profile.
Sara Stode
PR I N TED B Y
Pureprint Group
IMPORT A NT NO T I C E
©Knight Frank LLP 2015 – This Report is
published for general information only and
not to be relied upon in any way. Although high
standards have been used in the preparation of
the information, analysis, views and projections
presented in this report, no responsibility or
liability whatsoever can be accepted by Knight
Frank LLP for any loss or damage resultant from
any use of, reliance on or reference to the contents
of this document. As a general report, this material
does not necessarily represent the view of Knight
Frank LLP in relation to particular properties or
projects, Reproduction of this report in whole or in
part is not allowed without prior written approval
of Knight Frank LLP to the form and content within
which it appears. Knight Frank LLP is a limited
liability partnership registered in England with
registered number OC305934. Our registered office
is 55 Baker Street, London, W1U 8AN, where you
may look at a list of members’ names.
N
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2016
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GLO BAL D EVELO PM EN T R EPO RT