Branded Residences Fetch Significant Premiums Across Asia

Asian buyers drawn to the life lifestyle, convenience and investment returns of Branded Residences are pushing up premiums across the continent.

Branded residences are attracting significant premiums in Asian cities, with price differentials varying by up to 132% compared to generic luxury developments, according to the latest Knight Frank Branded Residences Report.

The top 4 cities recording the highest premiums above non-branded luxury residences were Bangkok at 132%, followed by Kuala Lumpur at 69%, Manila at 36% and Phuket at 8%.

For suppliers of branded residences, motivators include market differentiation, brand enhancement and year-round income while for buyers, these include service, amenities, security and investment yield potential. The Asian market for hotel-branded residences has seen strong growth, particularly in Thailand and Indonesia, with Asia now accounting for an estimated 30% of 400 developments globally.

“Asia’s fast-growing, ultra-wealthy population is fuelling demand for branded residences,” says Victoria Garrett, Asia Pacific Head of Residential at Knight Frank. “These buyers favour branded residences which offer the convenience of high-quality services, delivered by a trusted brand and with the potential for capital appreciation.”

Liam Bailey, Global Head of Research at Knight Frank, adds, “The branded residences sector globally is growing exponentially. Until the 1980s, branded residences were a scarce commodity. They can now be found in almost every major city and major holiday destinations.”

“Since a global residential benchmark was set at One Hyde Park, the London market has seen an increase in branded residences at the top end of the market. In Dubai, the emergence of branded residences like The Royal Atlantis mirrors the city’s transition from a holiday destination to a city in which to invest in a more permanent home.”

Kelvin Yip, Head of Residential Sales and Leasing at Knight Frank Malaysia, adds: “Branded residences are becoming popular in the capital city. The trophy asset, offering a high level of service, facilities and quality, continues to attract affluent end-users and investors.”

There have been 1,691 units of branded residences completed between 2014 and 2018, including The Residences @ The St. Regis Kuala Lumpur, Banyan Tree Signatures Pavilion, Four Seasons Private Residences and The Ritz-Carlton Residences.

Further branded residences are scheduled for completion by 2021 and collectively are expected to contribute more than 2,000 units to the existing stock. Notable upcoming schemes include The RuMa Hotel & Residences, Yoo8 Residences serviced by Kempinski @ 8 Conlay and SO Sofitel Kuala Lumpur Residences by the Accor Hotels Group.