With strong economic growth forecast and the Vietnamese consumers' increasing exposure to global standards of living, the luxury residential market starts discovering the new concept – urban branded residences.
Riding the economic waves
Despite the COVID-19 pandemic, the Vietnamese economy, unlike most others, was able to escape a contraction in 2020 thanks to competent handling of the crisis, growing at 2.91 per cent. According to the World Economic Outlook Report, a survey by the International Monetary Fund (IMF), Viet Nam's economic growth is one of the four highest rates in the world.
Viet Nam's economy is expected to grow five times by 2035, becoming the 19th largest economy in the world, says UK consultancy the Centre for Economics and Business Research (CEBR) in its annual league table on the growth prospects of 193 economies. Its GDP growth is forecast at 7 per cent a year over the next five years, and 6.6 per cent in the subsequent decade, reaching a nominal GDP of $1.59 trillion – a nearly five-fold increase in 15 years, going past major Asian economies like Taiwan and Thailand.
Riding the economic waves, the rich population in Viet Nam posted the world’s second fastest growth over the past decade. The country’s average annual growth rate of those with a net worth between $5-30 million, categorised as very high net worth (VHNW) population, reached 13.9 per cent during the 2010-2019 period, says Wealth-X, a leading global wealth information and insight provider.
Wealth-X report shows Vietnam ranks second among the world’s top wealth markets. Photo: Wealth-X
The affluent class is forecast to grow strongly in the next five years. By 2025, Viet Nam will have 511 ultra-high-net-worth individuals (UHNWI) with a net worth of at least $30 million each and 25,812 high-net-worth individuals (HNWI) with assets of at least $1 million, says The Wealth Report 2021 put out by Knight Frank. This translates to a growth rate of over 30% in the next five years.
The era of “Branded Living”
As top international luxury brands make a foray in Viet Nam, the growing and globally-mobile high-net-worth population is aware of which car they want to own and which style of clothes they want to wear. They now seek the same branding experience in their home too.
Branded residences, which are normally a partnership between a brand (often a hotel operator) and a developer, is not a new concept internationally or even locally; however, it is an emerging segment in Viet Nam.
In January 2021, Marriott International and Masterise Homes entered a milestone partnership to bring the hotelier’s first branded residences projects to Viet Nam. The agreement is set to allow Masterise Homes to extend its development expertise into Viet Nam’s fast-growing luxury real estate market, leveraging Marriott International’s global brands such as Marriott, JW Marriott and Ritz-Carlton in projects in Ha Noi & HCM City. The strategic partnership introduced Urban Branded Residences to the Vietnamese property market and will deliver unparalleled ultra-luxury living to discerning wealthy customers.
Signing between Masterise Homes and Marriott International. Photo: Masterise Homes
This mirrors the trend worldwide, where over 60% of branded residential schemes are in major urban centres, said Matthew Powell, Director of Savills Hanoi. “We feel this trend will become more established over the next few years as the approach delivers superior, guaranteed quality, proven luxury with brand recognition and “5-star standard” service, which also reassures investors and property developers themselves, let alone the attached price-premium. We see opportunities and potential growth in this high-end sub-segment,” Powell said.
Putting Viet Nam in the spotlight
The first Urban Branded Residences project as a result of the partnership between Marriott International and Masterise Homes is Grand Marina, Saigon, which comprises eight residential towers with some 4,500 ultra-luxury branded units from two Marriott International brands – JW Marriott and Marriott, and is also Marriott’s largest ever.
Marriott’s first branded residence project in Viet Nam is also its largest. Photo: Masterise Homes
With branded units starting at US$1 million, its price is comparable to the current selling prices of other branded residences in the region such as The Residences at Mandarin Oriental in Bangkok, or The Residences at the St. Regis Singapore. The success of two launches in Hong Kong and Viet Nam proved a large number of customers are confident that its quality could also compare to branded residences in the region. Grand Marina succeeded in elevating the benchmark of luxury living in Viet Nam to international standards and establishing a new real estate sector in Viet Nam: branded residences. Marriott brand association offered global recognition for not only the residences and their owners but also Viet Nam's real estate market on the world map.
David Jackson CEO, Colliers Vietnam, wrote: “Grand Marina Saigon that is backed by Marriott International has created confidence among customers both locally and abroad. The well-known brand has attracted many buyers, and Viet Nam’s real estate has attracted many foreign investors who are looking at alternative markets with higher upside potential when investment opportunities in their own countries are becoming saturated.”
Jason Turnbull, Deputy Managing Director and CFO, Masterise Homes, confirmed the developer’s plan to introduce more branded residences associated with Marriott International brands in 2021 in prime locations of Ha Noi and HCM City.
“The launch of branded residential projects with global-standard design, construction and operation will bring a new level of ultra-luxury living to Viet Nam and put the country’s real estate market in a higher position regionally and internationally. They will also offer a global address for world’s elites and successful entrepreneurs, shining a light on opportunities in Viet Nam and ultimately attract more foreign investment to the country and contribute to stronger economic growth,” said the Masterise executive.