Luxury Expert: More brand for your money

It’s surprising that relatively few agents and developers in South East Asia appreciate the power of global branded residences.

Without a major brand presence in the market it is difficult to establish high price points or target investors that appreciate the added value of branded designs, interiors and services. Of course, many developers hail their properties as ’luxury’, but this is often based mainly on their prime locations. They do not necessarily invest in the kind of exclusive luxury required to back up their high-end claims.

Luxury brand partnerships and interior designs not only add considerable kudos to a project, they also guarantee the kind of quality, expertise and tradition that savvy investors consider to be well worth the additional cost. Buyers are also drawn by the personalised services and facilities offered by the brand, particularly when a residence is attached to a top class hotel.

In Singapore, although the property market is one of the region’s most sophisticated, branded properties have been slow to make a mark, but global names like St Regis and Ritz Carlton have now arrived, along with celebrated design firms like YOO. These names epitomise luxury, class and top-notch service and their brand promise has already added tremendous value.

Singapore developer CDL is a pioneer when it comes to this segment of the market thanks to its successful partnership with the St Regis. The firm is now also in the process of selling itssoon to be completed W Residences at Sentosa, an integrated complex that includes a W hotel and luxury brand retail outlets, all set amid beautiful and exclusive surroundings. Meanwhile, KOP’s Ritz Carlton Residences Singapore are also in the final stage of construction. Located at the heart of Singapore’s prime residential district at 65 Cairnhill Road, The Ritz Carlton Residences sit on almost 60,000 sq ft of land, with three sky terraces housing extensive fitness, entertainment and other facilities for residents.

Elsewhere in the region, there is an impressive wave of branded property launches coming onto the market. Bangkok now has its St Regis Residences, nestled on top of the St Regis Hotel, and they are selling well. The Ritz Carlton Residences are also under construction and will form part of what will soon be the tallest building in the Kingdom. Manila is following suit with its Versace designed residences and although the brand is reflected mostly in the interior designs on offer to buyers, it nevertheless represents great progress for one of Asia’s strongest new markets. The main reason that few agents in Asia are aware of the ingredients that go into creating these high-end branded properties is that they fail to appreciate the superb levels of service and attention to detail involved. This means they often see branded properties as just another condo on the market, failing to convey to their buyers the stand out elements. A typical marketing strategy adopted by developers is to begin with a soft-launch and invite “VIP previews”, but nonbranded projects often fail to sell as well as expected. Luxury property buyers are discerning customers and quickly spot any mismatch of price versus quality. This means the same projects end up being re-launched later at significantly reduced prices.

Investors flying in from neighbouring countries often view several properties in a short period of time and need to make timely decisions on where to put their money. The show flats they are offered by agents may be luxurious and finely appointed, but this can be mis-leading as they do not always reflect the reality offered by the whole project. Even the developers of lower end properties often use extravagant show homes to make sales and agents like them because they can press buyers to make a purchase on the spot. In fact, the Singapore government is currently acting on such distortions by agents and developers with regulations scheduled soon to restrict such practice. When it comes to branded, hotelmanaged properties, even a show flat is simply not enough to convey the sheer range and value of the facilities and services on offer. Such properties provide so much more than bricks and mortar to investors, so the burden of educating agents and buyers lies firmly with the developers. With massive interest in regional property markets, developers should take note, identify your target clients and promote your branded properties in a way that stands out from the luxury crowd.

About the Author:
Alex Shlaen is an economist and holds an Executive MBA from Kellogg School of Management and HKUST. He is the founder of Panache Management Pte Ltd which represents Aston Martin Interiors, Tonino Lamborghini Casa, Formitalia design lines in Asia.He is also a serial real estate investor. He writes as The Luxury Expert for Property Report South East Asia