Will Hotel-Branded Residences Become More Popular in Singapore?
With the concept of home getting increasingly refined, branded residences are set to become the hottest investments in Singapore. Frequently launched in collaboration with hotel operators, these private condominium apartments capitalise on the prestige associated with the luxury hospitality groups, and fulfil the buyers’ preferences for hotel-like amenities and concierge services.
Over the past 10 years, the branded residential sector has grown 170 per cent, and 2020 is set to be another record year, according to Savills 2020 report on branded residences. “This has seen the addition of more than 52,000 units across 370 schemes. Despite the current global situation, 2020 saw more than 100 new schemes opening,” says Michael Roberts, director of the hotels segment at Savills Asia Pacific.
The concept didn’t catch on in Asia until 1988—more than 60 years since the first property in the US—with resort destinations such as Phuket and Chiang Mai. Despite that late start, an average of one in three new branded residences launches globally is located in Asia.
As a metropolis, Singapore was somewhat of an early adopter in the branded residence space when St. Regis Residences Singapore launched in 2008. It was jointly developed by Hong Leong Holdings, TID (a joint venture between Hong Leong and Mitsui Fudosan), and City Developments Limited (CDL), in collaboration with architecture and design firm WATG.
“St Regis Residences Singapore required an altogether different approach, reflecting the brand and context,” says David Moore, president and CEO of WATG. The firm also designed The Residences at W Singapore Sentosa Cove in 2011.
He adds: “With the prime Orchard Road location and relatively small site, careful consideration was given to ensure the maximisation of real estate yield and value, while not compromising on the guest or resident experience and operational efficiency and privacy factor.” The property ticked many essential boxes and also added some firsts to its list; it was also the first project to cross the $3,000psf (to even $4,000psf) threshold in Singapore’s property sector.
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For all hotel and branded residences projects, careful consideration is given to the brand, the guest or resident profile and the associated curation of experiences.— David Moore, president and CEO of WATG
The Residences at W Singapore Sentosa Cove took up the lifestyle factor up a notch with its concept of resort living and aspirational marina lifestyle, but with proximity to downtown Singapore. From a design and wellness perspective, the property stood out for its array of resort-inspired landscaped exterior zones for recreation and relaxation, as well as its maximisation of spectacular waterway views and the creation of private berths for owners.
“For all hotel and branded residences projects, careful consideration is given to the brand, the guest or resident profile, and the associated curation of experiences,” explains Moore. “While lifestyle hotel brands today have become a key driver of growth and innovation in the hotel space globally, W Singapore was the frontrunner, and the brand’s entry into Singapore needed to be special, from both a hotel and residential proposition.”
While initially well-received, the branded residences concept did not pick up as quickly as would be expected in Singapore. The fact that the first such project in the country was launched at the onset of the global financial crisis (GFC), may be cited as a reason, but the high standards maintained by property developers in Singapore is more of a probable contributor, according to Robert Williams, partner, Hotels & Hospitality at law firm Watson Farley & Williams.
“Singapore property developers have enjoyed great success before now with their own branding, reputation and credibility, so did not have the need to bring a hotel brand onboard. Similarly, Singapore’s major hotel developers typically have deep resources and a long-term outlook—that has allowed them to develop luxury hotel products locally on a standalone basis,” he adds.
WATG’s director of Strategy, Guy Cooke agrees. “When it comes to luxury residential options, Singapore has no shortage,” says Cooke. “We are home to highly experienced developers producing exceptional quality. The non-branded luxury condominium supply sets a high benchmark with hotel-grade amenities and onsite management widely offered, and quite frankly, largely expected. This creates a barrier to entry, squeezing the potential price premium that a hotel brand can bring.”
He adds that Singapore is not alone in this regard. There’s been an equally selective adoption of the trend in other mature urban markets such as London and New York City as well.
To say that Covid-19 has changed the way we live may sound like a replay of a broken record, but one cannot ignore the impact it has had on the mindset of property buyers. While there is evidence of an increased appetite in the branded residences market a little before the pandemic hit, the interest is not abating, says Victoria Garrett, head of residential, Knight Frank Asia Pacific. “This can really be attributed to the growth of the design-savvy consumer, the ever-increasing importance of brand trust in our society, and ultimately, developers recognising the importance of the home as a high involvement purchase.”
The pandemic has only fed the growing emotional connection we are developing with our homes and the need for it to be a sanctuary—which is fulfilled by a branded residence’s promise of quality, security, and convenience, among others. Singapore’s growing reputation as a safe haven for high-profile property investments and the surge in wealth in the form of ultra-high-net-worth individuals segment (UHNWIs)—individuals with a US$30 million net worth inclusive of their primary residence—adds to the potential for branded residences.
“With the number of billionaires increasing from 2158 to 2189, and growth of 10.2 per cent in UHNWIs segment in Singapore from 2019 to last year, more people are investing in best-in-class residential property, and that includes branded residences,” says Garrett. Their attractive rental yield and long-term returns in the form of protected prices—thanks to the fact that they are largely governed by the brand—contribute to the appeal of branded residences, she adds.
New developments are in the pipeline such as EL Development’s The Pullman Residences, of which Knight Frank is the consultant, in one of Singapore’s most prestigious districts, Newton. There is also scope for more new developments in the central business district and Sentosa.
According to Cooke, with the proven high-quality level of new luxury property launches in Singapore, “the operators will have to prove that they can bring the X-factor to these developments with the best lifestyle, service, and amenities”. “Singapore’s regional role as an aviation and business hub will continue to see developers pushing the boundary for luxury residential development, and branded residences will undoubtedly play a role,” he says.
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