Branded Residences Asia Hit Record Market Value Us266 Bil More Fashion And Lifestyle Brands Entering
The market for branded residential projects in Asia has reached an all-time high of US$26.6 billion ($35.5 billion), according to data from C9 Hotelworks, a leading hospitality consultancy in the region. This translates to over 68,000 luxury units that are currently available, making the branded residential market a lucrative sector for developers.
Vietnam leads the rest of Asia in the number of branded residential units, with 17,680 units across 59 properties. The average price for a branded residential unit in Vietnam is around US$350 per square foot (psf). Following closely behind is Thailand with 16,271 units across 65 properties, priced at an average of US$510 psf. The Philippines comes in third with 13,276 units across 46 properties, priced at approximately US$400 psf.
However, Singapore commands the highest prices in the region, with branded residences selling at an average of US$2,140 psf. In Japan, the average price per square foot for branded residences is US$1,935 psf.
In recent years, new markets such as South Korea and Malaysia have seen a rapid growth in the branded residential market, with 3,026 units across 16 properties in South Korea and 6,014 units across 24 projects in Malaysia.
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The majority of branded residential units in Asia are located in urban areas, making up 56% of the market supply. These luxury urban projects dominate the sector in terms of market value. For instance, urban branded residences in South Korea are priced at an average of US$2,670 psf, which is over half the cost of resort projects in the same country, priced at US$1,040 psf. Similarly, urban branded residences in Thailand sell at an average of US$770 psf, while resort properties are priced at US$430 psf.
Approximately 31% of branded residences in Asia are affiliated with luxury hotel brands, representing about 12,330 units across 80 developments. It has been observed that properties with reputable brands can command a premium pricing of 30%-35% above market rates in their respective countries. This also helps developers increase their market share in the region, says Bill Barnett, managing director of C9 Hotelworks.
The appeal of top hospitality brands and other luxury lifestyle brands has led to an increase in licensing fees. It is now common for luxury hotel and lifestyle brands to demand a 6% to 10% share in the sale of every branded residential unit.
Last August, Thai developer Ananda Development unveiled the ultra-luxury Porsche Design Tower Bangkok in Thonglor, in partnership with German automaker Porsche’s lifestyle brand, Porsche Design. The 22-unit tower, due for completion in 2028, is the first Porsche residential tower in Asia, following the Porsche Design Tower Miami, which was launched a decade ago. Units in the tower range from US$15 million to US$40 million.
Gianfranco Bianchi, general manager of Asia Pacific at The One Atelier, an international design consultancy that specialises 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. The company has partnered with several high-profile brands to create branded residences, including Fendi Casa Residences by Armani in Miami, 888 Brickell by Dolce & Gabbana in Miami, Büyükyalı Residences in Istanbul, Turkey, and the Karl Lagerfeld Villas in Marbella, Spain.
While hospitality-affiliated branded residences offer top-notch service, fashion or design-branded residences provide a rare trophy home that embodies the design and luxury aesthetic associated with these brands. According to Ananth Ramchandran, head of advisory and strategic transactions in hotels and hospitality (Asia) at CBRE, property cooling measures have led many high-net-worth Singaporean buyers of branded residences to seek out luxury properties in neighbouring regional markets. The short travel distance of these destinations, such as Phuket and Bangkok in Thailand, Bali in Indonesia, and emerging markets in Vietnam, make them attractive to Singapore-based buyers.
Jason Thelen, senior director of sales and marketing at Sudara Residences, a Thai-based developer, adds that Singapore now accounts for over 45% of regional purchases for their projects, indicating a strong demand from Singapore-based buyers for second homes in these markets.
The Ascott, a leading hospitality operator in the region, is also taking advantage of the growing demand for branded residences in Asia. The company’s vice-president for business development, Saowarin Chanprakaisi, believes their brands such as Ascott, The Crest Collection and Oakwood Premier, are highly regarded and sought after in the market. She also shares that Ascott is actively seeking partnerships with developers who are interested in venturing into the branded residential market.
For branded residential operators, maintaining trust in their brand and its ability to deliver top-quality service is key to establishing long-term value for their assets. This has led to luxury hotel and lifestyle brands demanding a larger share of the sale of each branded residential unit in recent times.
With the property cooling measures in Singapore limiting the demand for high-end branded residences in the country, developers and buyers are increasingly looking towards the promising market growth in nearby regional destinations.