Investing in a Condo has its advantages, one of which is the ability to leverage the property’s value for further investments. A large number of investors take advantage of their condos as collateral to secure additional financing for new investments, thus diversifying their real estate portfolio. While this approach can significantly increase returns, it also comes with certain risks. It is essential to have a solid financial plan in place and carefully consider the potential influence of market fluctuations. Additionally, with the help of a Condo investment, investors can broaden their investment opportunities and achieve long-term financial growth.
By: Jackson Tan, AsiaOneAsia’s Branded Residential Market Reaches Record Value of US$26.6 BillionThe branded residential market in Asia has reached a new height, attracting a market value of US$26.6 billion, according to data from C9 Hotelworks, an Asia based hospitality marketing consultancy. The growth of branded residence projects in the region has been on a steady rise, with over 68,000 luxury units now available. Leading the pack is Vietnam with a total of 17,680 branded residential units across 59 properties, followed by Thailand with 16,271 units across 65 properties, and the Philippines with 13,276 units across 46 properties. These luxury properties command an average price of US$350 psf, US$510 psf, and US$400 psf respectively. The highest priced branded residences in the region can be found in Singapore, where units are priced at US$2,140 psf, with Japan coming in second with prices of US$1,935 psf.Infographic: C9 HotelworksIn recent years, the development of branded residences in South Korea and Malaysia have also gained significant traction. South Korea boasts a total of 3,026 units across 16 properties, while Malaysia has a total of 6,014 units across 24 projects. Both countries have seen a surge in demand for branded residences, with premium properties in South Korea fetching prices of up to US$2,670 psf, and those in Malaysia priced at US$1,040 psf. Branded residences in Thailand are also seeing a similar trend, with units in urban areas fetching US$770 psf, while those in resort locations command a lower price of US$430 psf.Data from C9 Hotelworks also shows that branded residences in Asia make up about 31% of the market supply, with a total of 12,330 units across 80 developments affiliated with luxury hotel brands. According to Bill Barnett, the Managing Director of C9 Hotelworks, a reputable brand can help drive up the pricing by an additional 30% to 35%. This not only increases the value of the property itself but also helps the developer to increase their market share in the country. In the post-Covid-19 era, urban-locale branded residences make up the bulk of the market, accounting for 56% of the existing supply. This further solidifies the dominance of luxury urban projects in the sector in terms of market value.Barnett also noted that top hospitality brands and luxury lifestyle brands have begun to push for higher licensing fees. In recent years, luxury hotel brands and lifestyle brands have started to negotiate licensing fees of between 6% to 10% for each branded residential unit.A good example is the Porsche Design Tower Bangkok, developed by Ananda Development in partnership with the German automaker Porsche. The 22-unit tower, which is scheduled for completion in 2028, is the first Porsche residential tower in Asia. Prices for units range from US$15 million to 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)Luxury-branded residences in Asia are not limited to just hospitality brands, with fashion and design-branded residences also rising in popularity. According to Gianfranco Bianchi, the General Manager of Asia Pacific at The One Atelier, a global design consultancy specialising in branded residences for lifestyle brands, more luxury lifestyle brands have begun to explore partnerships to license their brand into real estate developments across the Asia Pacific region.The company has worked closely with several renowned brands to create branded residences, such as the 28-unit Fendi Casa Residences by Armani in Miami and the 259-unit 888 Brickell by Dolce & Gabbana in Miami. Other notable projects include the 90-unit Büyükyalı Residences in Istanbul, Turkey and the Karl Lagerfeld Villas, a set of five ultra-luxury villas in Marbella, Spain.Bianchi further states that branded residences offer more than just top-notch hospitality services; they are also a rare trophy home that conveys the namesake design and luxury aesthetic of the brand. This makes such properties highly sought after by affluent buyers in the region.Ananth Ramchandran, the Head of Advisory and Strategic Transactions in Hotels and Hospitality (Asia) at CBRE, credits cooling measures as the key factor behind the surge of high-net-worth Singapore-based buyers for branded residences in nearby regional markets. According to him, these buyers are turning their attention to luxury-branded residences in destinations such as Phuket and Bangkok in Thailand, Bali in Indonesia, and emerging markets in Vietnam. These locations are a mere two-hour flight away from Singapore, making it easy for buyers to view and purchase these properties.“The relatively short travel time and availability of regularly scheduled direct flights make it much more appealing to Singapore-based buyers,” he added. Popular flight carriers like SIA, Scoot, AirAsia, and Jetstar currently average about 150 flights per week between Singapore and Phuket. According to Jason Thelen, the Senior Director of Sales and Marketing at Sudara Residences, Singapore has quickly become the top regional market for buyers looking for second homes, accounting for over 45% of regional purchases.According to Saowarin Chanprakaisi, the Vice-President of Business Development at The Ascott, the company is also looking to expand its market share in the region by partnering with developers keen on entering the branded residential market. She also adds that the emotional resonance of The Ascott, The Crest Collection, and Oakwood Premier brands make them highly desirable in the market.In conclusion, the branded residential market in Asia has experienced tremendous growth in recent years. The increasing demand for such properties has resulted in a market value of US$26.6 billion, with luxury urban projects dominating the sector in terms of market value. With the rise of luxury lifestyle brands entering the market, the future of branded residences in Asia is looking increasingly promising.