The million-dollar luxury apartment segment 'hunts' super-rich customers

JLL has just released a report on the branded housing market (also known as luxury apartments) showing that the audience to buy this property is limited to the group of individuals with high net worth, who own at least one million USD (about 23 billion VND) can invest. This type of real estate has just been introduced into Vietnam, but it quickly shocked the market because of the highest selling price in the history of the market (over 400 million VND per m2 of apartments), breaking all price records of other real estate projects. luxury and super-luxury housing projects have been established before.

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According to JLL, only individuals with a net worth of at least one million USD can invest in luxury apartments.

It cites the World Wealth Report showing that the number of individuals with a net worth of one million dollars or more has doubled worldwide between 2009 and 2019. features of the branded apartment product line, purchased for the purpose of living or investment. These people belong to the group of people who move back and forth between many big cities in the world, own many houses and have a need to personalize properties to show class and status. They prefer accommodation that has both family style and high-class service like 5-6 star hotels.

Branded apartments are always associated with one or more famous brands, which are said to be targeted by this group of customers with capital of one million USD or more, but are not yet popular products. Worldwide, the number of branded apartments is only about 55,000 units in more than 400 projects. High-end fashion brands such as Giorgio Armani, Karl Lagerfeld and car manufacturers Aston Martin and Porsche, have recently entered this niche.

Perspective of the reception hall of a luxury apartment project in District 1, Ho Chi Minh City.

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This business is currently dominated by global luxury hotel brands such as Marriott International, Hilton Worldwide and Mandarin Oriental. Hotels control 80% of the worldwide branded housing market. The United States holds about a third of the global supply of branded residences. Asia also accounts for a large proportion, especially in Thailand, Indonesia, Dubai and recently Vietnam has started to appear on the world's top real estate map.

Ms. Trang Bui, Senior Director of Vietnam Market at JLL said, Vietnam is positioned as a relatively new market for the branded housing segment. However, thanks to the deep integration with the world, high economic growth and a strong growth rate of the super-rich class, Vietnam has started to appear brand-name real estate products that attract attention in the region. area. JLL forecasts that the three hot spots of Ho Chi Minh City, Hanoi and Da Nang with a vibrant real estate market, with high recognition for international investors, will be a promising land for the model of luxury apartments in the market. Vietnamese schools in the future.

GRAND MARINA, SAIGON – WHERE THE NEW GENERATION “RICH KID” ASSESSES YOUR VALUES

Meanwhile, according to Savills Vietnam's latest report on the niche market of branded residences, the rich and super-rich are potential customers of this luxury real estate. This unit also confirmed that the luxury apartment segment has established a transaction level of 18,000 USD per m2 for apartments in District 1, Ho Chi Minh City at the beginning of the second quarter of 2021 and will continue to appear new supply in the near future. next.

Savills data shows,

Vietnam belongs to the group of 10 markets with fast growth in the field of luxury real estate in the world. Emerging as one of the developed resort tourism destinations, Vietnam is considered to touch many of the needs of the international market for the luxury real estate segment. In addition, thanks to the high growth of the rich group in the country, the demand for luxury real estate in Vietnam's domestic market is expanding over time.

However, there are still many concerns that million-dollar luxury apartments are not easy to "please" the rich Vietnamese. Mr. Tran Khanh Quang, General Director of Viet An Hoa Company assessed, the price is about half a billion dong per square meter for a branded apartment and up to million dollars a product, although aimed at the rich and super rich, but still can psychologically overwhelmed. Because, a group of customers with millions of dollars in cash flow in Vietnam can still increase their defense during the outbreak of the pandemic and compare luxury apartments with luxury villas of equal value.

According to Mr. Quang, while the evolution of the pandemic in Vietnam and the world remains unpredictable, many hotel brands face difficulties and hotel assets decline in value, investors want to import international brands into Vietnam. Vietnam to develop branded real estate is a bit rushed.

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