THE BRANDED FACTOR IN KL’S GLOBALISATION
As an emerging market, Malaysia has seen a steady uptick in branded residences taking root particularly in its capital city, Kuala Lumpur. Dato’ Sri Gavin Tee, President of Swhengtee Group shares his prediction of this niche market segment.
“When a city becomes globalised, it will attract more multinational companies (MNCs) and international travellers who are used to the high quality of certain brands and will naturally gravitate towards such branded establishments including international 5-star hotels and residences. That’s why branded residences command a higher premium than residences that do not have a prestigious brand attached to it.
Expatriates or HNWIs prefer branded residences, particularly famous international brands because these brands inspire confidence and provide the kind of bespoke services that they are used to. The brand carries the guarantee of quality and services as well as safety and security.
Not surprisingly, international branded residences have the potential to command half the market. A branded property can enhance its value by 30%, for example, a property without brand may sell at RM2,00 psf, but if it is branded with a famous international hotel chain, it can fetch RM3,000 psf.
Further, when a popular or famous brand enters a market, it can even make the place popular, for example, when Air Asia flies to a little known destination, it can make the place popular and when more people visit the destination, the value of properties there will rise in tandem (provided other favourable conditions exist as well).
BRANDED RESIDENTIAL EFFECT
Kuala Lumpur was supposed to have globalized since 2007 when a lot of Middle Eastern, Korean and other foreign investors beat a path to its doors. However when the Global Financial Crisis hit in 2009, it slowed down the globalisation process to a large extent.