Why Hotel Residences Are Gaining Popularity in Malaysia, Thailand, Australia and South Korea
These are the resort and city destinations in countries such as Malaysia, Thailand, South Korea, and Australia that are experiencing a boom in the branded residences market
“The post-pandemic era offers an opportunity for branded residences to position themselves as the investment property of choice within the upper middle-class buyer segment, and we are starting to see this in the markets where we operate,” says Micah Tamthai, vice president of real estate, Minor International.
He sees a close link between this trend and the pent-up demand for travel drivers of this sector. “Adding a branded residential project to a destination helps strengthen its attractiveness as a travel and investment destination, supporting the development of the destination from an economic perspective,” explains Tamthai.
See also: Will Hotel-Branded Residences Become More Popular in Singapore?
According Victoria Garrett, head of residential, Asia-Pacific at Knight Frank, a recent survey by the real estate firm established that Asia retained its preference for urban living while the rest of the world saw an increase in the move towards more quieter suburban living. That said, there has also been a surge of second home buys among people who can afford it—especially in resort destinations in Southeast Asia.
To that end top developers have been focusing on hotel and non-hotel branded residences in prime locations in the key cities as well as resort destinations. The idea of a boutique holiday experience that comes with all modern-day conveniences, the frills of a holiday destination, the comfort of home and the security of a brand (read: no stress). This fits in place with the digital nomad as much as the high-net-worth (HNW) individual looking for a getaway home—just what the new-normal calls for.
Here are the top five branded residences in Asia-Pacific and the standing of the destinations they are in.
Desaru Coast, Malaysia
In larger countries in Southeast Asia such as Malaysia, “with border restrictions confining many travellers to domestic destinations, we see lesser-known, off-the-beaten-path property markets being explored”, says Tamthai. Where properties in the capital city Kuala Lumpur or resorts such as Langkawi or Tioman used to be top choices, Desaru Coast, in Southeastern Johor (Kota Tinggi district) is seeing scores of interest.
In a concerted effort to boost its popularity, Desaru Coast has seen many luxury updates in the past decade, including a water park with the largest wave pool in Southeast Asia, a 27-hole golf course, and five-star resorts. The pandemic has only served to increase its appeal, what with it making it in Time magazine’s World’s Greatest Places list—the only resort in Malaysia to make it to its 2021 list.
See also: Malaysia’s Desaru Coast Named One Of The World’s Greatest Places In 2021
One may ask “why Desaru”? But the more apt question is “why not?”, according to Tamthai. “It boasts a 17-km stretch of pristine beachfront, luxury offerings and connectivity to other cities in Malaysia, Singapore, Indonesia and even Thailand,” he says. “The pandemic has also not just awakened interest in Desaru as a holiday destination, but also as the next hotspot for real estate investors.” The Desaru Coast Ferry Terminal, which is due to launch soon, would amp its attraction quotient.
Minor International’s Anantara Desaru Coast Residences—developed jointly with Themed Attractions Resorts & Hotels (TAR&H), a subsidiary of Khazanah Nasional Berhad—has 20 beachfront pool villas, between 3,100sqft to 6,426sqft. In accordance with Tamthai’s comment about a property speaking to the tourism potential of a destination, Anantara Desaru Coast Residences also offers unique outdoor experiences such as a cruise through Desaru’s Sedili Wetlands as well as a foodie tour of Johor Bahru, and biking.
Of the nearly 65,000 branded residence schemes in 420 locations around the world, Phuket has 16, according to the Savills 2019 Branded Residences Report. The growth has been in response to the demand of the HNW customer in the last decade—with the pandemic adding another dimension to the demand.
Although those in the extremely wealthy category in Thailand are a small fraction of the national population, they hold as much as 67.8 per cent of the country’s wealth, according to SCB Julius Baer Wealth Report Thailand 2019. However, the boost in the real estate sector is more from global HNW investors—17 per cent—than local, who prefer to invest more in liquid assets.
The dining room of Avadina Hills by Anantara. Image: Minor Hotels
The pool area of Avadina Hills by Anantara. Image: Minor Hotels
Villa owners enjoy tremendous views of the Andaman Sea. Image: Minor Hotels
Savills examined 23 markets across the globe to determine the range of premiums that have been achieved on branded residences. “Our findings suggest an average global premium of 31 per cent, but with significant variation,” says Michael Roberts, director of the hotels segment at Savills Asia Pacific. The premiums achieved on Phuket branded residences have been between 40 and 45 per cent, according to the report.
The Aman Group kickstarted the trend back in 1988 when it launched Amanpuri in Phuket—the first of its kind in Southeast Asia. Residences at Sheraton Phuket Grand Bay have been notable others, while The Radisson Phuket Mai Khao Beach hotel and residence development on the north of Phuket island is scheduled to open in 2023. Then there is Avadina Hills by Anantara, which comprises 14 ocean-view pool villas—spacious two to 10-bedrooms houses that range between 2,452sqm to 3,373sqm—on a hill overlooking Layan Bay and the Andaman Sea; the property has been co-developed with Kajima Corporation.
“The residences are managed, maintained, and serviced year-round by the resort through a dedicated residential team, affording a hassle-free homeownership experience. The residences also present an opportunity for real estate investors to generate both short- and long-term returns through a flexible resort-managed rental program and in the form of future land appreciation or capital gains,” explains Tamthai.
The Thai capital falls only slightly behind its resort destination—it has 12 branded residence projects with two more in the works. “In Thailand, Bangkok is the main urban market and is seen as an attractive investment destination due to many lifestyle benefits, excellent health facilities, easily available international schooling, and ease of access to beach resorts, among others,” says Tim Skevington, managing director at Richmont’s Christie’s International Real Estate.
Richmont launched The Ritz-Carlton Residences, Bangkok, in the city’s tallest building, the mixed-use Mahanakhon building. Situated at the heart of Silom/Sathon central business district, it has 200 units ranging from studio apartments to penthouses.
“Recent purchasers have typically targeted luxury branded residences and stock is running low now as there have not been any new launches since the pandemic struck,” adds Skevington. But it is a temporary lull, as the Aman Group, in expressing its well-known love for Thailand, is set to launch Aman Nai Lert Bangkok.
“Thailand has always held a special place in the Group’s heart,” says Vanessa Grout, head of Aman Residences. “Aman Nai Lert Bangkok will be situated in its namesake iconic central city parkland and will further cement our vision to bring the Aman ethos to global cities,” she adds. Nestled in the century-old tropical gardens of Nai Lert Park, the 36-storey branded residence offers uninterrupted views of the park and the Bangkok skyline.
See also: Why Penthouses In Singapore Are Still Popular Among 'Crazy Rich Asians'
A residents-only lounge area at The Residences at Mandarin Oriental, Bangkok. Image: Mandarin Oriental. Image: Mandarin Oriental
The pool area at The Residences at Mandarin Oriental, Bangkok. Image: Mandarin Oriental
Mandarin Oriental, the 12th largest player in the branded residence sector, also ticked the city off its list of potentials with the launch The Residences at Mandarin Oriental, Bangkok in 2019. The 146-apartment development is situated in the new Iconsiam retail development. Aside from offering spectacular views of the Chao Phraya river from each apartment, there is also a slew of amenities, ranging from a sky lounge to BBQ terraces to restaurants and bars.
See also: 6 Most Exclusive Apartment Buildings in Asia
Seoul, South Korea
“Housing has long served as a haven for Korean wealth and a testament to market strength,” says Tammy Fahmi, Vice President, global operations and international servicing, Sotheby’s International Realty, adding that as the main reason for the real estate firm’s decision to expand into Seoul and its surrounding areas.
Victoria Garrett, head of residential, Asia-Pacific at Knight Frank anticipates that the growing ultra-hight-net-worth (UHNW—individuals with a net asset value of over US$30 million) investor pool would bring in more special classes of residences to wealthier areas in Seoul. “The UNHW individuals’ demands are getting more detailed and specific,” she adds.
Gallery832 is a property in Seoul's Gangnam district that features an exclusive members' club and residence concept. Image: Knight Frank
The rooftop pool area of Gallery832, a property in Seoul. Image: Knight Frank
Gallery 832, a 37-storey high-end luxury residential development in the heart of Gangnam, is in response to that discerning buyer. Aside from its luxury amenities, world-class services, and other offerings Gallery 832 provides include an exclusive “club-and-residence” concept that allows residents to become founding members of the property's exclusive members' club. This first-of-its-kind concept is aimed at attracting wealthy Korean buyers.
See also: 9 Korean Stars And Their Multimillion Homes
A number of Australian cities are forecast to see strong wealth generation, according to Sotheby’s 2019 report on Branded Residences. Sydney showed the highest potential for additional high-income households (2019-2024) in the Asia Pacific despite the limited supply of branded residences in the city at the moment, which may be due to the current relatively weak market conditions due to the pandemic.
The recently launched Crown Residences at One Barangaroo, Australia’s first fully integrated hotel-branded residences, is a sneak preview into that future. “The pandemic has driven a renewed search in a prime property like the Residences and seen a surge in demand for apartment living,” says Erin van Tuil, a partner at Knight Frank.
According to a Global Buyer Survey conducted by Knight Frank, more than one in three buyers (39 per cent) indicated they would be willing to pay a premium for branded living, with that figure rising to 45 per cent in Australasia. “The provision of service and physical amenities as the primary motivator for purchasing a property in a branded development,” adds van Tuil.
To that end, with its six-star facilities from Crown Sydney Hotel Resort—think restaurants, spa, an exclusive pool and gym, and more—Crown Residences at One Barangaroo’s buyer’s are “80 per cent Australian residents and all are Sydney-siders or have a strong connection and love for Sydney”. The buyer profile is as diverse as it comes—from young entrepreneurs, growing families in need of more space, as well as retirees rightsizing their homes by moving from larger properties to easy-to-maintain apartments.