COME HOME TO … A BEACHSIDE RESIDENCE ON PHUKET
AFTER BLOSSOMING IN 1980S AMERICA, THE BRANDED-RESIDENCE CONCEPT HAS NOW TAKEN OFF ON THAILAND’S HOLIDAY ISLAND. GARY JONES REPORTS
When the Sherry-netherland threw open its ornate, etched-glass doors on Fifth Avenue in 1927, the magnificent new hotel quickly attracted Manhattan’s high society to what was one of the Big Apple’s first art deco skyscrapers.
The hotel rapidly earned its reputation for tip-top standards of service and soon began catering to the varied needs of the luxurious apartments that also nestled in the 38-storey tower. And so the concept of the pampered and prestigious “branded residence” was born.
Almost a century on, real-estate giants Savills and Knight Frank both estimate that there are now about 400 brandedresidence projects operating in more than 60 countries. Each houses a collection of high-status homes in a variety of configurations in prime locations. All leverage the star power of a respected, sought-after brand name.
While a handful are aligned with designer fashion labels that include Versace, Armani and Bulgari – and there are even Aston Martin and Porsche-branded residences in Florida – the bulk are affiliated with hotel chains (84 percent of the global total, according to Savills’ Spotlight: Branded Residences 2020 report – Marriott International alone has 60 branded residences planned for coming years).
Branded residences not only provide the investor with an opportunity to buy into an upscale brand’s hard-won fame, but also cover a myriad of the grubby, glamour-free duties that usually come bundled with a second home, including ongoing maintenance and round-the-clock security, even in the owner’s absence, and drumming up a healthy return on investment through managed rentals.
Additional benefits to enjoy when actually making use of the residence might include professional housekeeping and concierge services, valet parking, access to personal trainers, and entertainment, reservations, childcare and office solutions.
While the branded concept has been most eagerly embraced in the United States, other countries are making up for lost time, and there is a distinct difference in approach with geography. According to Knight Frank’s most recent Global Branded Residences report, in the US “twothirds of developments are located in cities, with New York and Miami favoured heavily, while in Asia there is an even split between cities and resorts”.
Asia, in fact, already accounts for some 30 percent of all branded developments, with many individual residences being smaller units in more leisure-oriented destinations, such as the holiday island of Phuket in southern Thailand. Knight Frank continues: “Asia is an area of real growth opportunity, with an increasing market and a healthy project pipeline.”
But perhaps that should not come as a surprise. The 1980s was the boom decade for branded residences, and while that boom was indeed sparked in the US – when Four
Seasons opened popular condos adjacent to its property in Boston, Massachusetts, in 1985 – a pioneer on the opposite side of the Pacific was on Phuket, where the Aman group launched the branded concept in a resort setting in 1988, with Amanpuri.
And now, the branded sector has just experienced another extraordinary decade of growth.
“The last 10 years have seen the number of branded residences increase by 170 percent, adding more than 52,000 units across 370 schemes,” the Savills report states. “In spite of wider economic turmoil, 2020 is poised to be another record year with more than 100 new schemes opening.”
According to Knight Frank’s data, “there is a direct correlation between wealth creation and demand for branded residences” and “we are seeing such a renewed interest in the branded concept given the rapid growth in global wealth witnessed since 2000”.
But nothing comes for free, and the downside is in the initial outlay.
According to Savills, which examined 23 markets across the globe, branded-residence prices achieve a premium of, on average, 31 percent compared to equivalent non-branded properties. On Phuket, branded residences are achieving premiums of between 40 and 45 percent, it adds.
Potential investors looking for a high-quality, low-cost investment test of the Phuket market might look at convenient Mai Khao in the north of the island and just a 15-minute taxi ride from Phuket’s international airport.