Da Nang Is A Leading Market For Branded Residences

Brand residences market in the world

Branded residences are residential properties associated with a well-known brand, and they offer a range of services to their residents. Globally, the sector has grown by 230% over the past decade, with almost 100,000 units from 580 schemes. By 2026, supply will double with forecasts expecting more than 900 global branded residence schemes; the supply in Costa Rica, Nigeria, the Cayman Islands, and Egypt is expected to double between 2021 and 2026. This growth goes hand-in-hand with the number of brands participating in the sector, increasing from 69 in 2011 to 133 in 2021.

As the birthplace of branded residences, North America continues to lead global supply, and the US is the largest supplier in the world with almost 200 schemes. However, the sector is growing geographically, spreading into other regions like the Asia Pacific and the Middle East, with Thailand and the United Arab Emirates being the second and third largest suppliers respectively. Other countries like Belgium, Serbia, and Dominica will also enter the market this year. The participation of emerging markets and the continuous growth of established markets shows the potential of this sector.

With more countries entering the market and expanding their branded offering, there has been a shift in supply by region. Currently, North America has 35% of the total branded residence supply but will only have 28% in the future, while growing regions like the Asia Pacific has 26% of the stock in the pipeline.

Brand residences in Vietnam

In Viet Nam, the entrance of branded residences is a positive sign for the real estate market. In terms of branded residence schemes, Da Nang is among the top 20 cities globally, and its supply is expected to grow by 57% over the next few years. Mr Matthew Powell said: “In Viet Nam, branded residences first appeared in resort locations but have started emerging in bigger cities too, for example, the Ritz Carlton by Masteries Homes in Ha Noi. Although the market is still limited in Viet Nam, branded residences have a positive influence such as an increase in branding sophistication, higher standards across the market as well as increased exposure to better design, management, and operations.”

As this sector grows and spreads geographically, the product offering has become more diverse. Previously, the market focused on luxury schemes; however, upper-upscale and non-luxury offerings make up most of the future supply in emerging markets like Thailand and Viet Nam with seven schemes each. Mr Powell added: “We have seen some luxury branded residences in Viet Nam like The Ritz Carlton. However, non-luxury schemes present good opportunities in emerging markets as the entry costs are lower. This means investors can broaden their buyer pool by diversifying their offering in terms of location and price. In Da Nang, there are many projects with a more reasonable price, such as Hyatt Regency. We also expect to see more of this type of product in Ha Long, Phu Quoc, and Nha Trang.”

Commenting on the potential of branded residences in Viet Nam, Mr Powell added: “This type of product is expensive for developers. Although international brands allow for a premium price, developers should question if it is necessary to launch with a luxury hotel brand. Traditionally, hotelier brands such as Ritz Carlton have dominated, and in the US and Europe, there are also luxury offerings from non-hotel brands such as Porsche or Armani. Developers in Viet Nam need to ask themselves if these premium brands are compatible with market demands. They should carefully evaluate which brands they affiliate with, as locations differ and have unique projects, characteristics, and demands.”

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