The branded residential sector has been resilient, and its continued growth and popularity are supported by the rise in affluent buyers and HNWIs. Viet Nam offers enormous potential, given its geography, expansive coastline, and increasingly wealthy population. Developers are capitalising on this, Viet Nam now has one of the largest branded residential pipelines globally. With hybrid working here to stay, buyers want properties with access to major cities while delivering health and wellness services and facilities. Developers should consider capitalising more on holistic health facilities and services.
What are Branded Residences?
Branded residences have created a new benchmark for luxury living with lifestyles endorsed by world-renowned brands, which attracts and creates a community of global elites. They are residential properties affiliated with recognised and reputable brands. These elite properties deliver high-quality services, design, and facilities. Location is a key differentiator, they are often in prime urban locations or pristine resort areas with natural surroundings like mountains, forests, or beaches. The guarantee of service and refined back-end operations set branded residences apart. Most buyers are wealthy globetrotters who want lock-up-and-go properties with security and care guarantees.
Global Branded Residential Supply
Globally, there are 640 branded residence schemes with 100,000 units. By 2027, supply is to nearly double to 1,100 schemes. The Asia Pacific is a hotspot and has had a 216% increase in schemes over the last decade.
Although established luxury property markets like Dubai, South Florida, and New York are the leading destinations for branded residences, ten of the 15 top markets are in resort or emerging destinations, highlighting the increasing diversity in the sector.
The sector is evolving with offerings from hotel and non-hotel brands. Marriott and Accor are the dominant hotel parent brands; however, non-US brands like Banyan Tree and Emaar are climbing the ladder; they meet the demand from wealthy buyers outside North America and Europe. Yoo is the leading non-hotel brand, and emerging brands include Mahindra (Pininfarina), LightArt, and DAMAC (Roberto Cavalli). Their specialisations differentiate them from the traditional offering.
Expanding location diversity caters to evolving and diverse preferences. In the global pipeline, luxury schemes will see a dip in the supply share, while upscale brands will have a 1.5% increase.
See more: The Prime of Branded Residence
Branded Residential Supply in Viet Nam
At H1/2022, there were 35 branded villa projects launched in Viet Nam, excluding several urban and coastal apartment projects. Viet Nam has a dynamic branded residential market, growing exponentially. According to Savills latest Branded Residences Spotlight publication, Viet Nam expects 30 new schemes in the next few years.
Urban branded residences (in cities like Ha Noi or HCMC) have increased considerably in the last three years. Masterise Homes has the most expansive branded residence portfolio in Viet Nam. It has entered a strategic partnership with Marriott International to deliver properties under Marriott, JW Marriott, and The Ritz-Carlton. Its projects include Grand Marina Saigon, The Grand Ha Noi, and The Rivus (HCMC). Grand Marina Saigon will be Marriott International’s largest branded residential project with 1,121 apartments; it caters to elite buyers with prices of US$16,000 to US$18,000/sq m.
With the rise in hybrid living, resort branded residences must have access to major cities. Destinations within two or three hours of plane, train, or car travel are taking off as spending time between a city hub and a second home destination becomes popular.
Viet Nam’s geography caters to the demand for hybrid living. Much of the branded residential supply, particularly villas, falls into this category. By the end of H1/2022, Phu Quoc (Kien Giang) was the largest supplier of branded villas with 1,058. It is only a two-hour flight from Ha Noi and less than an hour from HCMC. Cam Ranh will deliver 633 branded villas by 2024, and it is less than two hours from HCMC and Ha Noi by plane. Ho Tram (Ba Ria – Vung Tau) is only a two-hour drive from HCMC and will supply 285 villas by 2024. Similarly, Ha Long (Quang Ninh) is a two-hour drive from Ha Noi and is a significant supplier with 601 villas.
| City (Province) | Total supply by 2024 | Travel time |
|---|---|---|
| Phu Quoc (Kien Giang) | 1,058 | 1 hour from HCMC 2 hours from Ha Noi (plane) |
| Cam Ranh (Khanh Hoa) | 633 | 1 hour from HCMC 2 hours from Ha Noi (plane) |
| Ho Tram (Ba Ria – Vung Tau) | 285 | 2 hours from HCMC (car) |
| Ha Long (Quang Ninh) | 601 | 2 hours from Ha Noi (car) |
| Da Nang | 354 | 1 hour from HCMC and Ha Noi (plane) |
| Hoi An (Quang Nam) | 308 | 1 hour from HCMC and Ha Noi (plane) |
Contrary to this trend, the single largest project, NovaHills Mui Ne (Binh Thuan) with 606 villas managed by Centara is currently four hours from HCMC by car. However, future infrastructure like the Dau Giay – Phan Thiet Expressway or the Phan Thiet Airport will significantly improve access.
Across eight studied provinces with branded villas, the average price was US$3,398/sq m. While more affordable than projects like Grand Marina Saigon, branded resort villas are a luxury purchase.
Giang Huynh, Associate Director of S22M, commented: “On a global level, branded residence projects create privileged and unique experiences for owners due to the scarce supply and special amenities. Critical success factors for the local market will be to guarantee exclusivity of the product, which cannot be achieved if supply is delivered in mass.”
What is Driving Demand Post-Covid?
Holistic Living
In light of the pandemic, wellness and health facilities are essential. Most properties offer swimming pools and gyms, and increasingly spas, steam and treatment rooms. Cullinan Hoa Binh offers wellness services like cycling, trekking, kayaking and a camping area. Shilla Monogram Quang Nam has a therapy garden, a sauna, water sports, and aqua aerobics. Wyndham Sky Lake on the outskirts of Ha Noi offers a golf course, and it has sold 72 of its 92 launched dwellings.
Globally, branded residences that cater to wellness are benefitting. These properties deliver good natural surroundings, high air quality and excellent quality of life and services like affordable and accessible yoga classes and the added extras like health-orientated cafes. Properties in Bali and Phuket are spearheading the market with branded real estate positioned toward yoga retreats and ‘reconnecting’. While properties like The Hamptons Ho Tram offer yoga services, the sector in Viet Nam is yet to exploit the concept.
Savills Global Yoga Index - Source: The Yoga Index
Growing Wealth
Branded residences in emerging locations like Viet Nam have high specifications, meeting demand from rising levels of HNWIs and second home buyers. Greater access to remote work also means secondary residences can be true second homes. Owning property is a status symbol for many, especially private residences.
According to McKinsey & Company, Viet Nam has one of the fastest growing middle classes in the region. By 2030, the country’s middle class will expand by 36 million people. Additionally, high-net-worth individuals (HNWIs) in Viet Nam increased by 17% pa from 2016 to 2020, according to Statista. Although the pandemic resulted in a drop in HNWIs in 2020, by 2025, there will be more than 500 people worth more than US$30 million and more than 25,000 with assets worth more than US$1 million in Viet Nam.
Conclusion
With an abundant future supply, favourable geography, natural beauty, and an expanding HNWI population, Viet Nam is poised to capitalise on this dynamic and robust market. Upcoming infrastructure projects and improved logistics infrastructure will support demand, given the rising popularity of properties with access to major cities. While the pipeline for urban and resort branded properties is healthy, developers could do more to capitalise on the wellness market. They must also be conscious of the sector’s most significant differentiator; scarcity.
About S22M
S22M is a cutting-edge business line from Savills Advisory. Giang and her team deliver killer spatials that inform location, marketing, positioning, and expansion strategies. S22M delivers customisable data on fields such as national inventories, custom catchment analysis, data and projections at local, provincial and macro levels, or viable demand modelling. It is suited to branded real estate players looking to plan their entry or expansion. Contact Giang for more information.
Learn about S22M and our services: S22M – Consulting with data science.
Definitions:
- Hybrid living: Having a home in a city and a second home. It entails splitting time between these two bases and is often enabled by the ability to work remotely.
- Resort Branded Residences: Properties close to pristine natural surroundings like the ocean, lakes, or mountains surroundings.
- Urban Branded Residences: Urban branded residences or those within the heart of major cities like Ha Noi or HCMC.
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