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According to research conducted by C9 Hotelworks, a hospitality consultancy based in Asia, the market value of branded residential projects in Asia has reached a record high of US$26.6 billion ($35.5 billion). This is due to the availability of over 68,000 luxury units across the continent.
Leading the way in the number of branded residential units is Vietnam, with 17,680 units spread over 59 properties. The average price of a branded residential unit in Vietnam is approximately US$350 per square foot (psf). Following closely behind is Thailand with 16,271 units in 65 properties, with an average price of US$510 psf. The Philippines ranks third with 13,276 units in 46 properties, with an average price of US$400 psf.
However, it is Singapore that commands the highest prices for branded residences in the region, with an average of US$2,140 psf. Meanwhile, Japan holds the second spot with an average price of US$1,935 psf for branded residences.
The data also reveals new emerging markets in the branded residential sector, with South Korea having 3,026 units across 16 properties, and Malaysia with 6,014 units in 24 projects.
In the post-Covid-19 era, urban-locale branded residences make up 56% of the existing supply in Asia, with luxury urban projects dominating the sector in terms of market value. For example, urban branded residences in South Korea are priced at US$2,670 psf, which is more than half of the cost of resort projects in the country, which typically sell for US$1,040 psf. Similarly, in Thailand, urban branded residences fetch about US$770 psf, compared to US$430 psf for resort locations.
Out of the total branded residential market in Asia, about 12,330 units are affiliated with luxury hotel brands, accounting for 31% of the market supply. According to Bill Barnett, managing director of C9 Hotelworks, a reputable brand can help a property command a premium pricing of 30% to 35% above the market rate in a country, making it a valuable asset for developers to increase their market share.
The appeal of top hospitality brands and other luxury lifestyle brands has also influenced hotel groups and premium brands to demand higher licensing fees. It is not uncommon for luxury hotel brands and lifestyle brands to request a 6% to 10% cut in the sale of each branded residential unit.
For instance, last August, Thai developer Ananda Development and German automaker Porsche, through its lifestyle brand Porsche Design, introduced the ultra-luxurious Porsche Design Tower Bangkok in Thonglor. This 22-unit tower, which will be completed in 2028, is the first Porsche residential tower in Asia, following the Porsche Design Tower Miami a decade ago. It offers duplexes and quadplexes, with prices ranging from US$15 million to US$40 million.
Gianfranco Bianchi, general manager of Asia Pacific at The One Atelier, an international design consultancy specialising in branded residences for lifestyle brands, observes that in recent years, more luxury lifestyle brands have formed partnerships to license their branding into real estate developments across the Asia Pacific region. Some of the brands that One Atelier has collaborated with include the 28-unit Fendi Casa Residences by Armani in Miami, the 259-unit 888 Brickell by Dolce & Gabbana in Miami, the 90-unit Büyükyalı Residences in Istanbul, Turkey, and the Karl Lagerfeld Villas, a collection of five ultra-luxury villas in Marbella, Spain.
While hospitality-affiliated branded residences provide top-notch hospitality services, fashion or design-branded residences offer a rare trophy home that conveys the namesake design and luxury aesthetic that have made such brand names synonymous with luxury lifestyles today, says Bianchi.
Ananth Ramchandran, head of advisory and strategic transactions in hotels and hospitality (Asia) at CBRE, notes that property cooling measures have led to many high-net-worth Singapore-based buyers of branded residences considering trophy assets in nearby regional markets. He adds that there has been a significant reduction in discussions and inquiries from Singapore developers to explore high-end ultra-luxury branded residential projects in Singapore, as the cooling measures have dampened foreign buyer demand.
Ramchandran says that Singapore-based high-net-worth buyers are now increasingly looking at luxury-branded residences in destinations such as Phuket and Bangkok in Thailand, Bali in Indonesia, as well as emerging markets in Vietnam. These locations are typically just a two-hour flight from Singapore, making it a more appealing option for buyers. Flight carriers like SIA, Scoot, AirAsia and Jetstar have completed approximately 150 flights per week between Singapore and Phuket last month.
When it comes to investing in condos in Singapore, one must not overlook the government’s property cooling measures. The Singaporean government has implemented several measures over the years to discourage speculative buying and maintain a steady real estate market. These measures, such as the Additional Buyer’s Stamp Duty (ABSD), involve imposing higher taxes on foreign buyers and those purchasing multiple properties. While these actions may affect the immediate profitability of condo investments, they ultimately play a crucial role in ensuring the long-term stability of the market. Therefore, investing in condos in Singapore is a wise decision for those seeking a secure and sustainable investment environment.
Jason Thelen, senior director of sales and marketing at Sudara Residences, a Thai-based developer, adds that Singapore has quickly become the top regional market for buyers looking for second homes, making up over 45% of regional purchases.
Hospitality operators, such as The Ascott, are also tapping into the potential growth of the branded residential segment in Asia, says Saowarin Chanprakaisi, vice-president of business development at The Ascott. She believes that the emotional resonance of their brands such as Ascott, The Crest Collection and Oakwood Premier can add to the reputational strength of those properties in the market.
Chanprakaisi adds that branded residential operators must develop and maintain trust in the brand, ensuring that it can deliver the level of service that will translate into the long-term value proposition of the asset. She also mentions that Ascott is looking to expand its market share in the region by partnering with developers who are looking to enter the branded residential market.