The Singapore-listed hospitality and property group sees opportunity for more branded residences in major cities around the world
The collective-sale fever has rubbed off on new-home sales, not just in Singapore but overseas too. This was evident from the relatively brisk sales at the April 21 and 22 weekend launch of Banyan Tree Residences Brisbane by Banyan Tree Group held at St Regis Singapore.
“We definitely saw a lot of collective sale beneficiaries,” says Carmen Ching, director of international properties at Colliers International, the exclusive marketing agent for Banyan Tree Residences Brisbane. “There were also many first-time buyers of international properties as well as Australian nationals — mainly from Sydney and Melbourne — who saw value in buying a property in Brisbane.”
Banyan Tree Residences Brisbane (left) is located atop the Kangaroo Point Cliffs and fronts the Brisbane River (Credit: Banyan Tree Group)
One reason they see value in Brisbane property is that home prices in Sydney have run up by 44% over the past decade to 2017, according to data from CoreLogic. Likewise, home prices in Melbourne have soared 39%, whereas in Brisbane, they have fallen 11.4% over the same period. Since the beginning of 2018, however, the trend has reversed, according to Core- Logic: Property prices have dipped in Sydney and Melbourne but stayed flat in Brisbane, says CoreLogic.
“If you want to invest in Australia today, you would have to be very brave to invest in Melbourne or Sydney because prices there are so high that they are unlikely to be sustainable,” says Ho Kwon Ping, executive chairman of Singapore-listed Banyan Tree Holdings, in a phone interview with EdgeProp Singapore. “With Sydney and Melbourne prices having risen so rapidly over the past 10 years, the price gap between Brisbane and these two cities is so huge that either Brisbane prices have to rise rapidly, or those in Sydney and Melbourne are going to have to drop. Either way, we think investing in Brisbane is a good bet right now.”
Ho: If you ask anyone in Brisbane, they will tell you that it’s one of the super-prime locations (Credit: Banyan Tree Holdings
Another reason for choosing Brisbane to plant the first Banyan Tree Residences in Australia is that “it’s a fast-growing urban centre”, says Ho. Many older Australians are moving to Brisbane from Sydney and Melbourne, and they prefer to buy an apartment because they do not want to maintain a big house, he adds. Most of them already live in houses in Sydney and Melbourne. “They also want to move to Brisbane because of all the places in Australia, the weather there is probably the best.”
According to Ho, most of the prime sites in Sydney and Melbourne have already been taken up. Meanwhile, Banyan Tree Residences Brisbane is located atop the Kangaroo Point cliffs and fronts the Brisbane River, offering views of the CBD. Besides its proximity to the CBD, it is also near parklands and botanic gardens as well as the Southbank cultural and lifestyle precinct. Amenities include leading schools, universities and hospitals. “If you ask anyone in Brisbane, they will tell you that it’s one of the super-prime locations,” Ho says.
A prime two-bedroom apartment on the waterfront of Sydney’s CBD is likely to be priced from A$2.5 million ($2.51 million) to A$3 million today, says Colliers’ Ching. Meanwhile, in Melbourne, there is quite a lot of stock in the CBD area, she adds. Even so, similar apartments in the most exclusive suburbs are likely to be in the A$1.5 million-to-A$1.6 million price range, she adds.
Living room with a view of the river at the Banyan Tree Residences Brisbane (Credit: Banyan Tree Group)
Recognising the premium attached to the product, Banyan Tree Group has increased the unit mix of Banyan Tree Residences Brisbane to include one-bedroom configurations. The number of units in the development was therefore increased from 76 to 100, with a wide range of one-, two- and three-bedroom apartments as well as four-bedroom penthouses.
“Since we launched [Banyan Tree Residences Brisbane], the market has become even more competitive, with an increase in demand for a broader range of units to cater for investors and owner-occupiers,” says Stuart Reading, Banyan Tree Group’s head of property development, in a statement. “We’ve been lucky in that even though this is our first branded residence in Australia, the Banyan Tree Group is already a reputable property and hospitality developer with projects in 25 countries.”
At the weekend launch of Banyan Tree Residences Brisbane in Singapore, one-bedroom units of 55 sq m were priced from A$550,000, while two-bedroom units starting from 89 sq m had price tags from A$1.2 million.
View of the CBD across the Brisbane River (Credit: Banyan Tree Group)
Buying ahead of hike in foreign buyer’s stamp duty
International investors who want to buy a home in Brisbane are also locking in their purchases ahead of the hike in additional foreign buyer’s stamp duty from 3% to 7% from July 1. In July last year, foreign buyers in Sydney were hit by a doubling in foreign buyer’s stamp duty to 8%. Meanwhile, in Melbourne, foreign buyer’s stamp duty was raised to 7% from July 2016.
These additional stamp duties for foreign buyers were introduced to stem an oversupply of investor-led, off-plan apartment projects. “In a lot of places in Sydney and Melbourne, you have 90-storey condos right in the heart of the city, but they remain empty after they are completed,” observes Ho. “Many of them are owned by speculative buyers.”
Banyan Tree Residences is a growing part of the group’s business, as it is riding on the Banyan Tree brand, says Ho. In December 2016, Banyan Tree Holdings entered into an agreement with AccorHotels to collaborate in developing and managing Banyan Tree branded hotels around the world. As at end- 2017, the group’s footprint in 25 countries covered 41 hotels with 5,874 rooms, 60 spas as well as 72 galleries.
Every room at Banyan Tree Residences Brisbane has a view (Credit: Banyan Tree Group)
It has a stable of four brands, including its hallmark Banyan Tree and Angsana brands. It launched its third brand, Cassia, as an extended-stay brand in 2014, and its fourth brand, Dhawa, as a casual and contemporary full-service hotel offering in 2015.
Joint ventures with China Vanke, AccorHotels
Banyan Tree also formed a joint venture with real estate developer China Vanke a year ago with the intention of consolidating the ownership of Banyan Tree-branded hotels and assets in China. In early April 2018, the JV partners acquired all the hotel assets of the Banyan Tree China Hospitality Fund for RMB1.35 billion ($283.3 million).
“Through our joint ventures with Accor and Vanke, and with more Banyan Tree-branded hotels and residences around the world, a lot more people want us to do pure residences,” notes Ho.
Bayfront pool villa at Banyan Tree Residences Bintan (Credit: Banyan Tree Group)
Banyan Tree Residences Brisbane is not the group’s only standalone branded residential project in the world. In February, Banyan Tree Residences — Hillside Dubai was launched. It was the first Banyan Tree Residences in the Middle East. The development is a 32-storey tower with one- to four-bedroom apartments as well as duplexes with private outdoor gardens and triplex penthouses featuring large terraces and cantilevered swimming pools. Core Savills was the marketing agent for the project.
Last year saw the launch of Banyan Tree Residences Riverside Bangkok, a luxury condominium in the Charoen Nakhon area that fronts the Chao Phraya River. The project is a collaboration between Thai-listed developer Nirvana Daii and Banyan Tree, with Singapore-based SCDA Architects as the design architect. The development, which sits on a five-rai (86,111 sq ft) plot, has a total sales value of THB6.5 billion ($273.4 million). Prices start from THB22.9 million.
Another development with Banyan Tree-branded residences is Banyan Tree Signatures Pavilion KL. The development comprises 441 private residences for sale and 50 hotel suites. It is located at the junction of Jalan Conlay and Jalan Raja Chulan, opposite The Pavilion KL mall. Urusharta Cemerlang, a company controlled by billionaire Desmond Lim, chairman of Pavilion REIT and owner of Pavilion KL, is also behind the development of Banyan Tree Signatures Pavilion. Launched in 2015, the private residences are fully sold, says Ho.
Master bathroom of an apartment at Banyan Tree Residences Riverside Bangkok, where units start from THB22.9 million (Credit: Banyan Tree Group)
According to Banyan Tree Holdings in its FY2017 annual report, the group has a pipeline of branded residences worth $147.3 million in sales. They are Angsana Beachfront Residences and Banyan Tree Grand Residences in Phuket; Banyan Tree Residences Brisbane; Cassia Phuket and Cassia Bintan. The revenue will be recognised upon completion in 2018 to 2020.
The group still holds a landbank of 1.15 million sq m in its largest integrated resort, Laguna Phuket. “When developed, it has the potential to generate $1.8 billion in revenue,” says Banyan Tree Holdings in its FY2017 annual report.
The group has a handful of property projects in Phuket, from Banyan Tree Grand Residences Phuket to Banyan Tree Phuket Spa Pool villas, and the mid-range Cassia Phuket apartments as well as Dusit Phuket villas. These projects have residences — worth several hundred thousand to $8 million — catering for a wide spectrum of buyers. “We believe Phuket has enormous potential, which we are now unlocking,” says Ho.
Double pool villa at Banyan Tree Grand Residences Phuket (Credit: Banyan Tree Group)
That explains why Banyan Tree Holdings announced in February that it was acquiring the remaining 34.25% stake it did not own in subsidiary Laguna Resorts & Hotels, which owns Laguna Phuket. “We did that because, for the first time in history, Chinese property buyers outrank Russian buyers in Phuket,” says Ho. “And this is happening at a time when people are talking about [the Chinese government’s] curbs on capital outflow.” Ho sees Chinese buyers pooling their money together to buy property in Phuket.
Moreover, the group’s collaboration with China Vanke allows it to tap the latter’s database of potential homebuyers from China, he points out.
Will there be a Banyan Tree Residences in Singapore? The group has been approached “many times” by various parties to develop a Banyan Tree Residences in Singapore. “But the locations were never prime enough,” says Ho.
An indication that the time is right for a Banyan Tree Residences in Singapore would be when foreigners start to buy Singapore luxury property again. “For foreigners, buying a branded residence is a sign of prestige and assurance of quality,” Ho says.
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