Research by Savills shows that the average price difference between branded and non-branded properties is 29%, possibly even double.
The data makes the real estate world envious: Branded real estate has grown by 230% over the past decade, which factors determine the price?
According to an in-depth report by Savills World Research, luxury real estate is recording a growth of 230% globally over the past decade despite the impact of the pandemic. 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.
Currently, the global supply of luxury real estate is 580 projects and this number is forecast to continue to nearly double by 2026 with 900 projects. Vietnam and Mexico are currently leading the upper-upscale segment, which 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.
Despite Covid, luxury real estate worth billions of dollars still grew by 230% billion
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.
Besides, highly personalized service is a prominent feature of branded real estate. Basic services can be developed into specialized services or “on-demand services” ranging from house cleaning, private dining to pet care.
The Covid-19 epidemic has changed the psychology and needs of buyers, focusing on properties with large areas, private outdoor areas and healthcare facilities. Accordingly, the world's luxury real estate is experiencing an increase in the number and diversity of health-related services, accounting for 21% of the total number of services for users. In addition to standard healthcare services such as fitness centers and swimming pools, luxury real estate projects are seeing the rise of a wider variety of health facilities such as spas, saunas, spa treatments, and more. Whether.
Besides, the pandemic has made buyers more and more interested in gadgets for the trend of working from home. According to the Savills report, high-speed internet is the most important convenience for buyers of luxury properties.
For investors, besides design standards coming from the brand, the number of customers of luxury real estate is expanded to those who are interested in that brand. Notably, the market recorded a diversification in terms of participating brands 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. It can be said that brand awareness in the real estate market will be an advantage compared to unbranded properties in the same segment.
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