According to recent data from C9 Hotelworks, a hospitality consultancy based in Asia, the market value of branded residential projects in the region has reached a record US$26.6 billion ($35.5 billion). This includes over 68,000 luxury units that are currently available.
Leading the way in Asia is Vietnam, with 17,680 branded residential units spread across 59 properties. The average price per square foot for these units is around US$350. Thailand comes in second with 16,271 units across 65 properties, most of which are priced at US$510 psf. The Philippines follows closely with 13,276 units across 46 properties, priced at approximately US$400 psf.
Branded residences in Singapore command the highest prices in the region, at an average of US$2,140 per square foot. Japan follows closely with an average of US$1,935 psf for branded residential units.
In recent years, there has been a rapid growth in the number of branded residences in new markets such as South Korea (with 3,026 units across 16 properties) and Malaysia (with 6,014 units across 24 projects), according to Bill Barnett, managing director of C9 Hotelworks.
In the post-Covid-19 era, urban-locale branded residences make up 56% of the total supply in Asia, with these luxury urban projects dominating the sector in terms of market value. For example, in South Korea, urban branded residences are priced at US$2,670 psf, which is more than half the cost of resort projects (typically priced at US$1,040 psf). Similarly, in Thailand, urban branded residences have an average price of US$770 psf compared to US$430 psf for resort locations.
Out of the 80 developments in Asia that are affiliated with luxury hotel brands, there are about 12,330 branded residential units, making up 31% of the market supply. According to Bill Barnett, this data shows that a reputable brand can command a premium of 30%-35% on top of the market rate in a particular country, as well as increase the developer’s market share.
The appeal of top hospitality brands and other luxury lifestyle brands has prompted many hotel groups and premium brands to demand higher licensing fees. It is not uncommon for luxury hotel brands and lifestyle brands to negotiate for a 6%-10% cut in the sale of each branded residential unit.
Last August, Thai developer Ananda Development and German automaker Porsche, through its lifestyle brand Porsche Design, unveiled the ultra-luxury Porsche Design Tower Bangkok in Thonglor. This 22-unit tower, set for completion in 2028, is the first Porsche residential tower in Asia, following the successful launch of the Porsche Design Tower Miami a decade ago. The tower 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 specializing in branded residences for lifestyle brands, has noticed an increasing trend of luxury lifestyle brands entering into partnerships to license their branding into real estate developments across the Asia Pacific region. Some notable examples include the Fendi Casa Residences by Armani (with 28 units) in Miami, 888 Brickell by Dolce & Gabbana (259 units) in Miami, Büyükyalı Residences (90 units) in Istanbul, Turkey, and the Karl Lagerfeld Villas (five ultra-luxury villas) in Marbella, Spain.
While hospitality-affiliated branded residences offer top-notch hospitality services, fashion or design-branded residences offer rare trophy homes that convey the namesake design and luxury aesthetic that have made these brands synonymous with luxury lifestyles today, says Bianchi.
Ananth Ramchandran, head of advisory and strategic transactions in hotels and hospitality (Asia) at CBRE, states that property cooling measures in Singapore have led many high-net-worth buyers to consider investing in luxury-branded residences in nearby regional markets. Due to the short travel time and availability of direct flights, destinations such as Phuket and Bangkok in Thailand, Bali in Indonesia, and emerging markets in Vietnam have become popular among Singapore-based buyers.
Jason Thelen, senior director of sales and marketing at Sudara Residences, a Thai-based developer, also confirms that Singapore has become their top regional market for buyers looking for second homes, making up over 45% of regional purchases.
Meanwhile, hospitality operators like The Ascott are also tapping into the future growth potential of the branded residential segment in Asia, according to Saowarin Chanprakaisi, vice-president of business development at The Ascott. She believes that the strong emotional connection between their brands (such as Ascott, The Crest Collection, and Oakwood Premier) and the market has contributed to their success in the region. The company is actively seeking partnerships with developers who are interested in entering the branded residential market.
To maintain trust in the brand and ensure the long-term value proposition of the asset, branded residential operators must deliver the highest level of service, adds Chanprakaisi.