Branded residential schemes are propping up the real estate sector across Southeast Asia as brand association boosts buyer confidence in construction quality and amenity offers
Luxury hotel chains like Four Seasons and Ritz-Carlton promise five-star living for investors with capital to spare. There are currently 500 branded residential property schemes worldwide and Savills research shows this residential sector boasts a 170 per cent growth over 10 years. With 100 new schemes in the horizon, property gurus share an optimistic outlook despite the current recession brought on by the pandemic.
Thailand, Vietnam, and the Philippines account for the majority of branded residential schemes in Asia-Pacific from brands like Banyan Tree, Four Seasons, and YOO Inspired by Starck. Depending on the location, Savills experts say these properties can fetch a price premium of 31 per cent on average. Meanwhile, emerging markets like Beijing, Bangkok, and Phuket are projected to achieve higher premiums, between 40 and 45 per cent, compared to mature markets.
Game-changing laws and tropical island-life appeal
Island paradise properties in Indonesia are drawing renewed interest from foreign investors thanks to landmark laws on property ownership and exciting new developments.
The Omnibus Law (Law No. 11 of 2020 on Job Creation), pending implementing regulations, introduced big changes to Indonesia’s real estate regime. Under the law, foreigners can now own apartments under a Freehold Title Certificate for Apartment Unit (Sertifikat Hak Milik atas Satuan Rumah Susun) which may be built on top of a land under a Right to Use or Right to Build.
Relaxed foreign ownership laws can be game-changing for investors looking to secure a tropical dream home in Ubud, Seminyak or Canggu as well as places like Labuan Bajo and Raja Ampat.
Knight Frank Thailand sees another two years before the condominium market improves, hence developers are enticing condominium buyers with as much as 50 per cent discounts for early buyers to recover from blows dealt by the pandemic and subsequent decline in real estate investment from Chinese buyers.
One luxury property development, the XT Ekkamai project developed by Sansiri and Japan’s Tokyu, recently employed a “pay early discount scheme.” A 30-sq.-meter unit at this prime location is on sale at 4 million baht.
Commercial and residential properties on the road to recovery
The Business Process Outsourcing (BPO) industry is currently supporting the commercial property market in the Philippines. BPOs account for 41 per cent of office space in Metro Manila followed by gaming at around 16 per cent, and all other industries comprise approximately 43 per cent. Research shows that productivity levels in the BPO industry has grown steadily from 50 per cent in April to 90 per cent by July.
While an increase in office space vacancies and softer demand is expected, Next Wave Cities and flexible office spaces are seen as potential growth areas in the Philippine property market. Office spaces in townships are gaining popularity due to the appeal of having commercial, residential, and recreational areas in close proximity.
In Singapore, the latest figures from Urban Redevelopment Authority show Singaporeans purchasing private properties in record numbers despite the recession. A total of 1,217 new private homes were sold last month, the highest recorded sales for December in eight years. Overall, 2020 saw an increase of 1.1 per cent in private homes sold compared to 2019.
Analysts attribute this growth to low interest rates and travel restrictions providing momentum for domestic sales as residents head to showflats for property investments. Owners of Housing and Development Board flats looking to upgrade their residence after the five-year minimum occupation period also contributed to the property market’s surprisingly stellar performance.
Property experts expect the same factors to affect property demand in 2021. Although market sentiment will recover slowly, the prevailing outlook is optimistic due to ongoing vaccination rollouts and subsequent stabilisation of the economy.
Property analysts in the Philippines are likewise optimistic as prevailing sentiment is that the worst of the pandemic is behind us. The speed of recovery will now depend on the national government’s implementation of vaccination programmes and policies for rebuilding the economy.
