Property is one of the hardest hit sectors by the COVID-19 pandemic as many buyers are taking a wait-and-see approach amidst the economic uncertainty caused by the health crisis.

However, there is one property sub-sector that is deemed as a resilient safe harbour by industry players and experts – branded residences.

In fact, branded residences have seen a surge in popularity in Malaysia in recent years. Branded residences are luxury homes associated to a premium brand (usually a hospitality or lodging service provider), which allow them to enjoy prestige, recognition and high-quality services through association with the latter.

In essence, this gives the owner the comfort and permanence of a home but with the full benefits and luxury of a five-star hotel. 

The pandemic has highlighted some of the advantages of such developments that serve as a silver lining in the market. 

Here are the top five advantages of investing in branded residences:

1. Location

Most branded residences are located in prime locations, which remains the preferred destination for many to stay due to the convenience and lifestyle they offer.

Meanwhile, the supply of new and quality residences in these areas is shrinking due to the scarcity of land and high development cost.

All these factors are helping branded residences retain their value and attract buyers and tenants.

2. Value proposition

Branded residences often built on prime locations and equipped with intrinsic value built into the proposition, including extensive amenities, attentive service and lifestyle benefits and the backing of internationally recognised hospitality brands.

Moreover, they come with quality workmanship and development delivery, which provides a stronger resale value for their owner.

As these luxury homes cater to the top income earners, they offer investors the opportunity to buy into a niche product that is much more resilient when compared with other types of properties.

3. Price premiums

The luxury home market is actually still performing strongly, especially for branded residences.

This is attributable to their association with prestige brands, which act as a guarantee for high levels of service, quality and ongoing management and oversight, which adds a lot of value for buyers and tenants.

It is precisely these value-adds that contribute to the price premium seen in the market, generally in the region of 30% to 40% over comparable developments, but which also add to the strong resale values available.

4. Rental income

Investors of branded residences can enjoy greater ease when renting out their unit, thanks to the brand recognition and quality services.

Also, many of these residences have their own rental pools or programmes already set up along with an existing pool of potential clients with an affinity for the brand.

The rental income is higher as compared to typical, non-branded condominiums as branded residences usually caters to higher income earners.

You can also enjoy hassle-free ownership with the professional operator management offered by the property manager of the branded residence.

5. Capital appreciation

As compared to non-branded developments, branded residences command a certain level of premium in their pricing.

But the good news is that the owner is able to enjoy a higher capital appreciation due to their exclusive offerings. On top of that, the current limited supply of branded residences also serves to protect prices.

Source: https://www.propnex.com.my/post/details/90?fbclid=IwAR3ochiZk94Te5SZOPcwQbm0ZlwBYfb3NOh6aC8pzEVKdwUHVXIc7kZIew4

UEM Sunrise Bhd announced today that it had acquired 6.86 acres of prime freehold land in Cheras, Kuala Lumpur for a total consideration of RM197 million. 

In a stock exchange filing today, the property developer said its wholly-owned subsidiary UEM Land Bhd had signed a sale and purchase agreement (SPA) with Accolade Land Sdn Bhd, the landowner, with preliminary plans of developing 1.8 million square feet (sq ft) of various types of competitively-priced properties aimed at young homeowners looking for residences with immediate accessibility to the city centre. 

“The development has an estimated total gross development value (GDV) of over RM1 billion and is slated for a two-phase launch, with the first phase kicking off in the second half of 2022 (2H22).

“The proximity of the land to the Taman Connaught MRT Station provides UEM Sunrise an excellent opportunity to explore a transit-oriented development that meets demands of young urban professionals working in the city, complemented by a lifestyle offering in attractively priced residences,” said UEM Sunrise chief executive officer (CEO) Sufian Abdullah in a statement. 

“The transit-oriented development nature of the project will provide us with the opportunity to develop a unique product combining its accessibility and integration with the public transportation system, with the demands of a post-pandemic living space, such as provisions for the low-touch economy and more open recreational facilities, at an affordable price tag. 

“As UEM Sunrise continues to aggressively rebalance its land banking portfolio, we remain to be on the lookout for land that can provide value to our customers and shareholders while rebuilding our sales funnel in the short to medium term,” he added. 

Following the latest acquisition, the group said its total land bank in the Greater Kuala Lumpur area stands at approximately 440.1 acres, amounting to an estimated total GDV of RM29 billion, providing the company with resilient and sustained growth in the long term.

At the noon break today, shares in UEM Sunrise ended unchanged at 42 sen, valuing the property developer at RM2.12 billion.

Source: https://www.theedgemarkets.com/article/uem-sunrise-acquires-686-acres-freehold-land-rm197m-cheras