By the end of 2021, the housing market in Vietnam will receive the first two luxury real estate projects. Despite the high price, branded real estate still attracts customers thanks to its own advantages.
In Vietnam, the segment of the luxury real estate market is still very small but soon attracts attention due to its "terrible" value. By the end of 2021, the housing market in Vietnam will receive the first two branded real estate projects. Despite the high price, branded real estate still attracts customers thanks to its own advantages.
Located in the center of Hanoi at the corner of Hang Bai and Hai Ba Trung streets, D'.San Raffles Masterise Hang Bai project has an asking price from about $35,000/m2. Along with that, a project located in the center of Ho Chi Minh City also has an asking price from about 16,000 USD/m2. These are the two projects recorded with the highest selling prices in Vietnam up to the present time.
It is expected that the Vietnamese market will receive one more luxury project in the central area in 2022 and a few projects in the period of 2023-2025.
According to experts of CBRE Company, branded real estate is understood in the simplest sense as residential real estate for sale managed and operated by a high-class hotel brand, so the standards of products and services are The project's services and facilities must meet the strict requirements set by these brands.
In addition, there are a few other criteria that are always associated with luxury real estate such as prime location, perfect view, unique design, structure and finishing level of luxury products...
Both branded real estate projects that have just been launched in Vietnam have received the attention of domestic and international buyers with opening events in Hong Kong (China), Ho Chi Minh City. Even, all the apartments of the project in Hanoi capital were also announced as successfully booked in the first and only opening sale in Vietnam - CBRE information.
The branded apartment projects offered for sale in Vietnam have a unique location in the city center and open views, providing owners with products of outstanding quality and design, managed. by the leading and long-standing 5-star hotel management brand in the world. These are the factors that are taken care of by the investor to meet the needs of daily relaxation after a stressful working time and ensure the health of the residents.
According to CBRE, 2021 marks a new phase of Vietnam's real estate market. Under the impact of the COVID-19 epidemic, the market has witnessed changes in demand for housing products. Projects with open living space, comfort, convenience and health factors are more concerned. The price level in the market is continuously increasing, especially in the high-end and luxury segments.
Overview of the market, CBRE statistics, number of apartment projects in Ho Chi Minh City. Ho Chi Minh City with river view has a higher asking price of 24-81% compared to projects without or with limited view. Similarly, the apartment project in Ho Chi Minh City. Ho Chi Minh City within walking distance to metro stations of Metro Line 1 recorded a higher price than projects outside the walking range of 24-51%.
Ms. Duong Thuy Dung - Senior Director of CBRE Vietnam said that the appearance of luxury real estate in urban areas comes from the actual demand in the market combined with factors such as location, view, and quality. product and management will increase the value of the product. This is a sustainable increase, not a temporary increase.
The value of a product also depends a lot on maintenance, maintenance, and maintenance during operation. Branded products when handed over will be managed by 5-star hotel management units - brands with a lot of experience in real estate management. Real estate managed by such a professional will always ensure the value of the product, not being lost but also increasing over time - Ms. Dung analyzed.
From a different perspective, Savills Company also offers 3 distinctive features that help luxury real estate conquer the market. This unit cited, an in-depth report of Savills World Research shows that luxury real estate is recording a growth of 230% globally over the past decade despite the impact of the epidemic.
Different from traditional serviced apartments, the value of luxury real estate lies in the location of the project, high-class services and modern facilities guaranteed by major global brands.
According to Savills, currently, the global supply of luxury real estate is 580 projects and this number is forecasted to continue to nearly double by 2026 with 900 projects. Vietnam and Mexico are currently leading the high-end segment. This is also the segment that recorded the strongest growth globally.
The first factor that affects the value and arbitrage of luxury properties as pointed out by Savills is location. Research by Savills shows that the average price difference between branded and non-branded properties is 29%. For emerging markets, the figure is 44%. Meanwhile, new areas with fewer luxury real estate projects recorded double the price difference between the two types of properties.
Among the 20 most developed markets, 13 are in emerging resorts or project areas that have received the participation of both luxury and non-luxury brands. The price difference in resorts stands at 25% and drops to 18% in developed cities. Da Nang is in the top 20 cities for luxury real estate with a future supply growth of up to 57% from current projects.
Mr. Matthew Powell - Director of Savills Hanoi said that different projects located in different locations will have distinct characteristics. Therefore, the scale for branded real estate will also be more diverse. From an investment perspective, these factors contribute to bringing outstanding advantages to the luxury real estate market, helping to attract buyers and increase competition in the market.
Along with that, the value of branded real estate is also positioned by service quality standards associated with brand reputation. Accordingly, the owner will be assured of a professional and high-class management method and operated according to a carefully researched process.
“A branded real estate project will come with professional management and operation quality to ensure the value and positioning of the product. The potential of this field in the Vietnamese market lies mainly in foreign customers because these are customers who are familiar with brands and tend to choose this type of product” – Mr. Matthew Powell analyzed. .
In addition to the location and service factors, the utilities provided by the investor can also create different values for a branded real estate project. According to research by Savills, the diversity of utilities is directly proportional to the location of the project.
Specifically, luxury brands that offer a full range of utilities are present in the market; Meanwhile, upper-middle-class brands only meet 60%. Front office, security, fitness center, spa and swimming pool are considered basic services that luxury properties must meet. On the other hand, utilities such as beauty, home cuisine, golf courses, or high-class restaurants are high-class services and are often associated with top brands.
The market is currently seeing a diversification in terms of brands entering this segment over the past decade. If in the past, hotel brands accounted for the majority of the market share, now, not only hotel brands but also lifestyle brands have entered the market. Awareness of brand value in the real estate market will be an advantage compared to unbranded properties in the same segment.