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Investing in a condo can bring about numerous advantages, including the opportunity to leverage its value for further investments. Numerous individuals utilize their condos as collateral in order to secure additional financing for new investments, thus broadening their real estate portfolio. While this tactic can enhance returns, it also comes with certain risks. Therefore, it is imperative to have a solid financial plan in place and carefully consider the potential effect of market fluctuations on your investments. With the added benefit of using your condo as a leverage, you can maximize your returns but always make sure to proceed with caution and well-informed decisions to ensure success in your condo investment journey.
By C9 Hotelworks, an Asia-based hospitality consultancy, recently released data showing that the market value of branded residential projects in Asia has reached an all-time high of US$26.6 billion ($35.5 billion), with over 68,000 luxury units now available.Out of all the countries in Asia, Vietnam currently has the highest number of branded residential units, with 17,680 units spread across 59 properties. The average price of a branded residential unit in Vietnam is about US$350 per square foot (psf). Thailand comes in second with 16,271 units across 65 properties, with most units priced at US$510 psf. The Philippines follows closely behind with 13,276 units across 46 properties, priced at an average of US$400 psf.However, Singapore takes the top spot in terms of prices, with branded residences there commanding an average of US$2,140 psf. Japan comes in second with an average price of US$1,935 psf for its branded residences.As more markets in Asia have seen a surge in branded residential developments in recent years, countries such as South Korea and Malaysia have also experienced significant growth in this sector, with 3,026 units across 16 properties and 6,014 units across 24 projects respectively, according to Bill Barnett, managing director of C9 Hotelworks.Barnett also notes that in the post-Covid-19 era, urban-locale branded residences make up the majority (56%) of the supply in Asia, with these luxury urban projects dominating the market value. For instance, in South Korea, urban branded residences are priced at an average of US$2,670 psf, which is more than half the cost of resort projects (typically sold at US$1,040 psf) in the country. Similarly, in Thailand, urban branded residences fetch an average of US$770 psf, compared to US$430 psf in resort locations.The branded residential market in Asia currently comprises about 12,330 units across 80 developments that are affiliated with luxury hotel brands, making up 31% of the market supply. According to Barnett, this data shows that reputable brands can provide a significant boost in pricing, with affiliated properties commanding a premium of 30% to 35% on top of market rates, as well as helping the developer gain a larger market share.Additionally, Barnett explains that the appeal of premium hospitality brands and other luxury lifestyle brands has led to hotel groups and premium brands demanding higher licensing fees, with requests for a 6% to 10% cut in the sale of each branded residence unit becoming increasingly common.Thai developer Ananda Development and German automaker Porsche recently unveiled the ultra-luxury Porsche Design Tower Bangkok in Thonglor, a 22-unit tower that is expected to be completed by 2028. With prices ranging from US$15 million to US$40 million, the tower boasts a collection of duplexes and quadplexes, and is the first Porsche residential tower in Asia following the success of the Porsche Design Tower Miami a decade ago.Among the panelists at the event were Saowarin Chanprakaisi and Teo Junrong from The Ascott, David Johnson from Delivering Asia, Gianfranco Bianchi from The One Atelier, Jason Thelen from Sudara Residences, Ananth Ramchandran from CBRE and Lee Nai Jia from PropertyGuru Group. (Photo: C9 Hotelworks)Gianfranco Bianchi, general manager of Asia Pacific at The One Atelier – an international design consultancy specialising in branded residences for lifestyle brands – affirms that more luxury lifestyle brands have been exploring partnerships to license their branding into real estate developments across the Asia Pacific region. Some of the high-profile projects that One Atelier has partnered with include the 28-unit Fendi Casa Residences by Armani in Miami, the 259-unit 888 Brickell by Dolce & Gabbana, the 90-unit Büyükyalı Residences in Istanbul, Turkey, and the Karl Lagerfeld Villas, a collection of five ultra-luxury villas in Marbella, Spain.While hospitality-affiliated branded residences offer top-notch hospitality services, fashion or design-branded residences provide a rare opportunity to own a trophy home that encapsulates the distinctive design and luxury aesthetic that has come to be associated with such brands today, says Bianchi.According to Ananth Ramchandran, head of advisory and strategic transactions in hotels and hospitality (Asia) at CBRE, property cooling measures have led to a significant number of high-net-worth Singapore-based buyers considering trophy assets in nearby regional markets. Ramchandran explains that there has been a significant reduction in inquiries and discussions from Singapore developers regarding entering the high-end ultra-luxury branded residential segment, as the current property cooling measures have dampened foreign buyer demand.“Many developers are being discouraged from entering this high-end segment, and this is due to property cooling measures having had such a significant impact on foreign buyer demand,” he adds. Ramchandran also notes that Singapore-based high-net-worth individuals are increasingly looking to purchase luxury-branded residences in locations such as Phuket and Bangkok in Thailand, Bali in Indonesia, and emerging markets like Vietnam.Most of these locations are just a short two-hour flight away from Singapore, making them highly attractive to local buyers. According to Ramchandran, flight carriers such as SIA, Scoot, AirAsia and Jetstar completed around 150 flights every week between Singapore and Phuket last month.Jason Thelen, senior director of sales and marketing at Sudara Residences, a Thai-based developer, also adds that Singapore has become the top regional market for buyers seeking second homes, representing over 45% of regional purchases. The Ascott, a leading hospitality operator, is also capitalising on the growth potential of the branded residential segment in Asia, according to Saowarin Chanprakaisi, vice-president of business development. Chanprakaisi states, “We believe that our brand names like Ascott, The Crest Collection and Oakwood Premier have a strong reputation in the market and an emotional appeal for buyers.”She adds that branded residential operators must focus on developing and maintaining trust in their brand, in order to provide a level of service that will ultimately translate into long-term value for the asset. Ascott is actively seeking to increase its market share in the region by partnering with developers keen on entering the branded residential market.