Branded hotel condos boost luxury market in Asia
Property investors in Asia are prepared to pay a premium for their investment if a luxury branded name is attached to the development.
Branded residences inspire high levels of confidence because of the elite status they provide along with the security provided by managed rental and global marketing, it is claimed.
They are relatively new in Asia where five star hotels are working with owners and developers to boost availability and encourage investment.
An example is the recent launch by a global management company of a residential project in Singapore where branded condos sold for S$4,000 per square metre compared with the average price of S$ 2,500 for luxury condos.
'No one had seen an investment like this in Singapore and they sold fast. People were paying a premium for the name and the brand,' said Nigel Cornick, Chief Executive Officer of Raimon Land Public Co.Ltd, a Thai based luxury developer.
He believes it has started a trend and more of these kinds of investments are planned in prime areas in Thailand. Investors are also attracted by the superior returns these kinds of projects can deliver. Bigger projects are increasingly offering villas, apartments and a branded hotel with condos.
In general the management companies either sells the residences outright with the owners living onsite, or the apartment becomes part of the hotel inventory and in the hotel letting pool for owners to receive rental income. Revenue is split among the owners according to the size of their investment.
Added incentives include the hotel brand's services such as a concierge, valet, doorman, laundry, spa and private access. They can charge meals to their residence if they eat in the hotel's restaurant.
'Investors know that a well established brand has the resources to ensure a branded residence will not only be completed, but will be built to a certain standard, and this creates a loyal following of buyers,' added Cornick.
'If the developer and hotel brand have a good reputation and a strong track record, and they offer sensible or unique designs, investor confidence is much higher. The operators can provide security, confidence and peace of mind for the owners, especially when the investment is in excess of US$1 million.'