Branded residences have emerged as a new market in China as demand for hotel-style apartments surged on the back of the rising number of foreigners working in the mainland. An increasing number of mainland developers have let their properties branded with and linked to the services of a prestigious hotel to boost demand, according to property consultants. Because of investors and tenants' passion for brands, selling prices of these properties are usually higher than ordinary units offered in the market, they said. For international hotel operators, they are happy to co-operate with developers as branded residences have provided them with a channel to take a big slice of China's vast real estate sector. The first branded residence in China is Park Hyatt Residences, part of Beijing & Yintai Centre in the capital. The development is developed by China Yintai Holdings, Hyatt International and Merrill Lynch Park Hyatt Residences will contain 216 units and 28 penthouses. It sold about 200 units or 80 per cent of the total number of units in the second quarter. 'Apart from good location and high quality of the building, the brand of Park Hyatt gave us a lot of help,' said Catherine Yin, the general manager of Beijing Yintai Property, the developer of Beijing Yintai Centre. The company is selling 28 penthouses in Hong Kong at 70,000 yuan to 90,000 yuan per square metre. 'More developers will adopt the same strategy to promote sales of their properties,' said Ms Yin. Sources said JW Marriott will soon manage its service apartment project in Beijing while Four Seasons is said to be managing a serviced apartment project in Shanghai. Both of the two projects will be offered for sale. USI Holdings, the property and apparel company, said earlier it did not rule out the possibility of selling serviced units under its Lanson Place brand in future Analysts said as China further opened its finance sector and more multinational companies continued to expand their business in China, more grade A offices will be in demand. As the number of foreign workers increase in China, it will stimulate demand for luxury hotels and hotel-style apartments. Rebecca Shum, executive director of CB Richard Ellis' investment and project marketing, said the luxury hotel brand gave investors confidence in the value and quality of the property. 'Some investors are willing to place their orders even before they knew what it would cost.' CB Richard Ellis is the sole agent for the penthouses for Park Hyatt Residences. As the selling price is higher than ordinary flats, buyers will only get a rental return of 6 to 7 per cent from Park Hyatt Residences. This compared with 8 to 9 per cent from ordinary flats in the city. Ms Shum said branded residences are popular in the US but still new in China and Asia. She expected it would be welcome by buyers and occupiers. Recently, City Developments sold its St Regis Residences in Singapore. The development banks on the international appeal of the St Regis brand, owned by Starwood Hotels and Resorts.
