Branded Residences Asia Hit Record Market Value Us266 Bil More Fashion And Lifestyle Brands Entering
Renowned Asia-based hospitality consultancy, C9 Hotelworks, has reported that the market for branded residential projects in Asia has reached a record value of US$26.6 billion ($35.5 billion), with over 68,000 luxury units currently available. According to data from the consultancy, Vietnam leads the market in terms of the number of branded residential units, with 17,680 units spread across 59 properties. The average price for a branded residential unit in Vietnam is around US$350 per square foot (psf).
Thailand comes in at second place with 16,271 branded residential units across 65 properties. The majority of these units are priced at approximately US$510 psf. The Philippines follows with 13,276 units spread across 46 properties, priced at US$400 psf.
However, branded residences in Singapore are commanding the highest prices in the region at US$2,140 psf, followed by those in Japan at approximately US$1,935 psf.
“There are also new markets where branded residences have grown quickly in recent years — South Korea, which has 3,026 units across 16 properties, and Malaysia, where there are 6,014 branded residential units across 24 projects,” says Bill Barnett, Managing Director of C9 Hotelworks.
In the post-Covid-19 era, urban-located branded residences account for 56% of the current 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, compared to resort projects which sell for approximately US$1,040 psf in the same country. Likewise, in Thailand, urban branded residences are commanding prices of around US$770 psf compared to those found in resort destinations, selling for an average of US$430 psf.
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Overall, Asia’s branded residential market includes around 12,330 units across 80 developments which are affiliated with luxury hotel brands. This accounts for around 31% of the market supply.
“The data shows that a reputable brand can help an affiliated property command premium pricing of 30%-35% on top of the market rate in the country,” says Barnett. “It also helps the developer increase its market share in the country.”
The appeal of top hospitality brands and other luxury lifestyle brands has also seen hotel groups and premium brands ask for higher licensing fees. It is now common for luxury hotel and lifestyle brands to demand a 6%-10% cut in the sale of each branded residential unit.
In August 2021, Thai developer Ananda Development and German automaker Porsche, via its lifestyle brand Porsche Design, unveiled the ultra-luxury Porsche Design Tower Bangkok in Thonglor. The 22-unit tower, which is scheduled for completion in 2028, is the first Porsche residential tower in Asia, following the success of the Porsche Design Tower Miami a decade ago. Units in the project, which includes duplexes and quadplexes, are priced between US$15 million and US$40 million.
From left: Saowarin Chanprakaisi, Vice-President of Business Development at The Ascott; Teo Junrong, Vice-President of Business Development at The Ascott; David Johnson, CEO of Delivering Asia; Gianfranco Bianchi, General Manager, Asia Pacific at The One Atelier; Jason Thelen, Senior Director of Sales and Marketing at Sudara Residences; Ananth Ramchandran, Head of Advisory and Strategic Transactions, Hotels and Hospitality Asia, CBRE; Lee Nai Jia, Head of Real Estate Intelligence of Digital and Software Solutions, PropertyGuru Group and Bill Barnett, Managing Director of C9 Hotelworks. (Picture: C9 Hotelworks)
Gianfranco Bianchi, General Manager of Asia Pacific at The One Atelier, an international design consultancy specialising in branded residences for lifestyle brands, notes that in recent years, more luxury lifestyle brands have explored partnerships to license their branding into real estate developments across the Asia Pacific region.
One Atelier has partnered with several high-profile brands to create branded residences, including 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, says that property cooling measures have led many high-net-worth Singapore-based buyers of branded residences to consider trophy assets in nearby regional markets.
“We’ve experienced a significant reduction in terms of the discussion and inquiries from Singapore developers to explore high-end ultra-luxury branded residential projects in Singapore. Developers are severely discouraged from stepping into this high-end segment because property cooling measures have dampened foreign buyer demand,” he adds.
Singapore-based high-net-worth buyers are also increasingly eyeing luxury-branded residences in destinations such as Phuket and Bangkok in Thailand, Bali in Indonesia, and emerging markets like Vietnam. These locations are typically just a two-hour flight from Singapore.
“The relatively short travel time and availability of regularly scheduled direct flights make it much more appealing to Singapore-based buyers,” he says, adding that last month, flight carriers like SIA, Scoot, AirAsia and Jetstar completed about 150 flights per week between Singapore and Phuket.
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Jason Thelen, Senior Director of Sales and Marketing at Sudara Residences, a Thai-based developer, adds: “Singapore has quickly become our 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 future growth of the branded residential segment in Asia, says Saowarin Chanprakaisi, Vice-President of Business Development at The Ascott. “We believe the emotional resonance of our brands like Ascott, The Crest Collection and Oakwood Premier have reputational strengths in the market.”
“Branded residential operators must develop and maintain trust in the brand that it can deliver the level of service that will eventually translate into the long-term value proposition of the asset,” she says, adding that Ascott is looking to expand its market share in the region by partnering with developers who would like to enter the branded residential market.