Banyan Group makes a big bet on brand residences
Banyan saw, for instance, a recent surge in demand by Russian and Chinese visitors. Singaporeans make up only a small percentage of clients, but they account for more than two thirds.
Phuket is a great place to work remotely. Phuket is located near other Asian cities. It also has several new hospitals and international schools. The “pull factor”, he added, is working at an “amazing” location that has dry, warm weather in the typical winter.
Buying a home in Phuket costs less than half the price of a similar property back home. He explained that people in the middle or upper-middle classes are still interested to buy a second house, but may not have the money to do so. In cities like Singapore for example, a bungalow costs between S$20 and S$50 millions. Phuket is a cheaper option for these people.
At Dec 31, 2023 there was S$377.7m in unrecognised property sales , which is a 67 per cent increase from the previous year. It is estimated that S$92.6 will be recognised this year. The remainder S$285.1 will be recognised by 2025.
In FY2023, the total revenue of the group reached S$327.9million. This is a 20.9% increase over S$271.3million a year before. Net profit increased to S$31.7 millions, up from S$767,000 for FY2022.
The sales of property are just at the beginning. Banyan has focused much of its efforts to grow the branded residential segment on Thailand. It owns a four-square-kilometre-sized plot of land, the same size as a Phuket-style township or two-thirds of Singapore’s Marine Parade Planning Area.
Branded properties are those that are associated with major brands. This includes international brands such The Ritz-Carlton, and St Regis. Branded residential properties typically provide higher levels of services than standard residential development.
The integrated development Laguna Lakelands, located on Banyan’s land in Phuket, will be the newest and most ambitious project for the group this year. The project covers 111 ha and will include biodiverse, indigenous vegetation throughout the various living zones. The project is expected, upon completion, to house the largest private community on the Island.
Laguna Lakelands first phase was launched in February with 300 condominium units ranging from 1 to 3 bedrooms, as well as 14 villas of 4 bedrooms.
The size of condo units ranges from 559 square feet to 1,280, and prices start from about seven million baht. (S$260,000). Villas with four bedrooms, including private gardens and pools, average 5,600 sq ft in size and start at 60,000,000 baht.
Ho stated that 5,000 homes will be constructed in the next 5-10 years.
Phuket – the allure
A Knight Frank report from July 2023 shows that Thailand is one of the five top markets for luxury residences.
Savills’ report found that Thailand’s island resort of Phuket was the most popular destination for branded homes in Asia-Pacific.
The “coming-of-age” of Phuket, as a global hotspot similar to Majorca or Ibiza (in Spain and the Caribbean), is responsible for much of the boom.
Post-pandemic lifestyles have evolved, and more people are searching for a second residence to escape the city or act as a “safe place” away from political unrest in their country.
This would have an impact on property sales but, fortunately, the effect has been “slight”. This is consistent with the idea that people aren’t buying property for investment. They wouldn’t do it in an environment of higher interest rates, where their yield would be lower.
The return, which is “moderately decent”, at 4%, will cover all expenses, he said.
Banyan “doubles down” on the development of property in Phuket. The Laguna Lakelands Project, for example, is valued at approximately US$2 Billion.
The Savills report indicates that the demand for brand residences in the future will be “ever-growing”. The report said this was especially true for global cities, such as business and educational hubs that offer lifestyle and culture attractions and “unique experiences”.
As the number of wealthy individuals increases, and with strong historical and projected economic growth, brands are confident to increase their presence.
Knight Frank reported that the branded residential segment was not without its own challenges. This includes the need to sync the timelines of buyers and developers, to prove the value of brands, and to demonstrate an unwavering commitment towards sustainability.
Overall, the consultancy stated that both operators and developers have a great deal of potential. The industry is still expected to grow despite current economic challenges. This demand will be fueled by factors such as wealth creation, investment, and travel.
Segment sales reached a record high of S$267.8 Million in FY2023. Further growth is anticipated, especially in Thailand. The market for branded residences has grown rapidly around the world. Banyan Group (B58 +2.82%), formerly Banyan Tree Holdings, is one example.
In the latest financial year ending December 2023, Banyan’s branded residences and Extended Stay segment sold 432 units for a total value of S$267.8million. Banyan achieved its highest sales performance to date with a total value of S$267.8 million, which is 23 percent higher than the S$217.2 millions from the sale 354 units in FY2022.
