Singapore-based buyers favour luxury branded residences in nearby regions such as Phuket, Bali and emerging markets in VietnamWritten by C9 Hotelworks, a leading hospitality and real estate consultancy based in Thailand
The market for branded residential projects in Asia has reached a record high of US$26.6 billion in value, according to C9 Hotelworks, an Asia-based hospitality consultancy. This surge is attributed to the growing popularity of luxury branded residences, with over 68,000 units now available.
Leading the pack is Vietnam, with 17,680 branded residential units across 59 properties. These units have an average price of US$350 per square foot (psf). Thailand comes in second with 16,271 units across 65 properties, with a higher average price of US$510 psf. The Philippines also ranks high on the list, with 13,276 units across 46 properties priced at about US$400 psf.
Singapore, however, commands the highest prices in the region for branded residences, with an average of US$2,140 psf. It is followed by Japan, where prices are about US$1,935 psf.
Infographic: C9 Hotelworks
The market for branded residential projects in Asia is still growing, with new markets emerging. South Korea, for instance, has seen a rapid growth in the number of branded residential units in recent years, with 3,026 units across 16 properties. Malaysia also boasts 6,014 branded residential units across 24 projects.
According to Bill Barnett, managing director of C9 Hotelworks, urban-locale branded residences currently make up 56% of the market supply in Asia in the post-Covid-19 era. These luxury urban projects also dominate the sector in terms of market value. For instance, in South Korea, urban branded residences are priced at US$2,670 psf, which is significantly higher than resort projects that typically sell for US$1,040 psf. Similarly, in Thailand, urban branded residences have an average price of US$770 psf, while resort locations have an average of US$430 psf.
The data also indicates that branded residences affiliated with luxury hotel brands make up about 31% of the market supply, with approximately 12,330 units across 80 developments. According to Barnett, the data demonstrates that having a reputable brand attached to a property can help command a premium of 30%-35% above market rates in a particular country. It also helps developers gain a larger market share within that country.
The appeal of top hospitality brands and other luxury lifestyle brands has also resulted in an increase in licensing fees demanded by these brands. It has become common for luxury hotel and lifestyle brands to ask for a 6% to 10% cut in the sale of each branded residential unit, notes Barnett.
Last August, Thai developer Ananda Development and German automaker Porsche, through its lifestyle brand Porsche Design, announced the launch of the ultra-luxury Porsche Design Tower Bangkok in Thonglor. The 22-unit tower, set to be completed in 2028, is the first Porsche residential tower in Asia, following the Porsche Design Tower Miami, which was launched a decade ago. The units are priced between US$15 million and US$40 million.
From left: Saowarin Chanprakaisi, vice-president of business development, The Ascott; Teo Junrong, vice-president of business development, 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 for Asia Pacific at The One Atelier, a global design consultancy that specialises in branded residences for lifestyle brands, observes that in recent years, more and more luxury lifestyle brands have been exploring partnerships to license their branding for real estate developments across the Asia Pacific region. Some of the brands that One Atelier has partnered with include Fendi Casa, Dolce & Gabbana, Karl Lagerfeld, and Porsche Design.
Hospitality-affiliated branded residences offer top-notch hospitality services, while fashion or design-branded residences provide a rare trophy home that embodies the design and luxury aesthetic synonymous with these brand names, explains Bianchi.
Ananth Ramchandran, head of advisory and strategic transactions in hotels and hospitality (Asia) at CBRE, reports that cooling measures in the property market have resulted in a growing interest among high-net-worth Singapore-based buyers in branded residences located in nearby regional markets. “We have seen a significant reduction in discussions and inquiries from Singapore developers regarding high-end ultra-luxury branded residential projects in Singapore. The cooling measures have dampened demand for foreign buyers, and developers are hesitant to enter this high-end segment,” he says.
He also notes that luxury branded residences in destinations such as Phuket and Bangkok in Thailand, Bali in Indonesia, and emerging markets in Vietnam are becoming increasingly popular among Singapore-based buyers. These locations are just a two-hour flight away from Singapore, making them highly accessible. “The relatively short travel time and the availability of regularly scheduled direct flights make it much more appealing to Singapore-based buyers,” he says. In fact, last month, major airlines such as SIA, Scoot, AirAsia and Jetstar operated around 150 flights per week between Singapore and Phuket.
Jason Thelen, senior director of sales and marketing at Sudara Residences, a Thai-based developer, concurs, noting that Singapore is now the top regional market for buyers seeking second homes, accounting for more than 45% of regional purchases. Saowarin Chanprakaisi, vice-president of business development at The Ascott, observes that in light of the potential for growth in the branded residential segment in Asia, the hospitality group is looking to expand its market share by partnering with developers who are keen to enter the branded residential market. The group’s portfolio includes brands such as Ascott, The Crest Collection, and Oakwood Premier.
According to Chanprakaisi, branded residential operators must build and maintain trust in their brand’s ability to deliver top-quality service that will ultimately translate into the long-term value proposition of the asset.