Categories

The Rise of Hotel-Branded Residences in Bangkok

What are they?

Hotel-Branded Residences are when a developer teams up with a recognisable, trusted brand to manage a condominium offering above-average ‘hotel-like’ services & amenities. Over the last few years in Bangkok this has traditionally been exclusive to the ultra-luxury market segment, however recently this concept has been filtering down to the mid-market. 

Existing Hotel-branded Residences in Bangkok

The concept of hotel branded residences in not uncommon in Thailand, particularly in the resort towns, these are usually structured as a profit share model with the ability to stay for X amount of days in the year and then returned back to the hotel to run in the meantime. This is a common misconception in Bangkok, where residences are not operated as hotels, unless the condominium has a hotel-license, any short of short-term rental is forbidden. 

Examples of some completed branded residences in Bangkok: 

Brand

Developer

The Residence at Mandarin Oriental

MQDC

The Four Seasons Private Residences

Country Group Development 

Banyan Tree Residences Riverside Bangkok

Nirvana Daii PLC

The Residences at Sindhorn Kempinski

Siam Sindhorn Co.

The Ritz Carlton Private Residences

Pace

St Regis

Minor International PLC

Khun By YOO

Sansiri 

Ramada/Wyndham/Cassia

Siamese Asset 

In Bangkok some examples of hotel-branded residences can be found in architecturally significant buildings. In 2020 we saw the rise and development of the Chao Phraya riverside area. This was led by three ultra-luxury private residences all finishing around the same time; The Four Seasons Private Residences (leasehold), The Residence at Mandarin Oriental (freehold) & The Banyan Tree Riverside Residences (freehold). 

These high-end projects are considered stable assets and with strong foreign & local demand are often bought as trophy purchases. The services offered to cater to the high-end cliental are of primary interest. Buyers are often focused on a long-term investment in these buildings, often used as a pied-à-terre, it’s common place for international buyers to add Bangkok to their portfolio and a global top-brand is an attractive appeal. Buyers are also interested in these properties as legacy purchases to keep and pass down within the family, especially considering the soft inheritance tax in Thailand. 

One of the more established branded residences in Bangkok is the Ritz-Carlton Private Residences located iconic Mahanakhon building. When the building finished in 2017 there was relatively little to compare it, the closest competitors were the St Regis & the Sukothai offered as condominiums. Since the completion of the Four Seasons Private Residences & Residence at Mandarin Oriental particularly, consumers have a more like-for-like comparison on quality, location, overall concept & price. Since 2020 prices have been pushed up with a strong re-sale market and capital gain, something which has echoed a wider global property trend in this market segment. 

Th 5-star hotel-brands are much more focused on the end user, the ultra-luxury bracket generally achieves less attractive yields, which has led to lack of Grade A rentals in this space, particularly for the larger unit types. This is in contrast with the 3-4 star residences, which focus more on the investor market and even operate with hotel licenses as condominiums. 

It hasn’t just been hotel-brands teaming up with developers to create residences, the Khun By YOO by Philip Starke is one example, located in Thonglor where YOO international branding have teamed up with Sansiri to execute a concept based around a designer. 

Why the rise in popularity in Bangkok? 

There are a mixture of reasons developers are turning to established brands, traditionally condominium managements are run by either a developer in-house subsidiary (Plus Property as an example) or they turn to a third party (Savills, Knight Frank etc.). 

From a marketing perspective they carry a reputation which can cut through the steep competition in the Bangkok residential market today and offer something certain during a generally uncertain time.

This concept is rapidly expanding and becoming an increasing trend within the mid-market as well. The most high-profile of these has come from Siamese Asset, who recently completed a major re-branding on a number of new condos with the Kew Green Hotel Group, applying for hotel licenses to enable short-term rental. 

The short-term rental market has been a popular space with investors due to general high yields, now to find a legitimate and legal work-around for peace of mind for the owners has been a unique market approach. It’s hard to tell the overall success of this concept since COVID-19 has still restricted foreign travel. 

Previous

Re-brand

Siamese Exclusive 87

Ramada Residence

Siamese Exclusive 42

Wyndham Garden Residence

Siamese Rama 9

Cassia Residences (within Landmark @ MRTA Station)

Siamese Exclusive Queens

Wyndham Residence

Siamese Sukhumvit 48

Ramada Plaza Residence

Developer SENA had floated the idea of ONYX management for the Piti Ekkamai Project before it’s cancelation & Raimonland are tipped to follow this trend as well, as announced in their recent quarterly report. 

Market Trends

Christie’s International Real Estate hosted a Webinar in June 2021 on the subject of the Hotel-Branded Residences & New Developments from three offices located in New York, Dubai & Bangkok. This growing concept does appear to follow a have a wider global trend, the US has the most established market for branded residences so far with Thailand second. There was general consensus this will be a growing market trend to watch in the near-future.

Within Bangkok, the trend is not slowing down either, with the new Dusit Village next to Lumphini Park under construction and One Bangkok super-project offering more to cater to the ultra-luxury market, whilst more local developers will focus on short-term rental investors looking for ‘hassle-free’ investments with attractive services. 

 

 

 

 

Alex Blencowe
Lazudi Consultant & Market Commentator