A behind-the-scenes look at the recent Luxury Property conference in Hong Kong
The recent Luxury Property two-day conference at the Conrad Hotel in Hong Kong was, I am pleased to report, both well attended and well organized by Terrapinn, a group closely associated with Hedge Fund conferences. Two years ago, attempting to organize a professional luxury property event with developers, fund managers, agents, professional property investors and Middle East corporations would have been difficult. Hong Kong was recovering from SARS, Thailand was recovering from the Tsunami and Bali was recovering from the bombings.
This year the stars have aligned and luxury property in Asia has taken off like wildfire. Almost every major 5-star hotel brand is now developing luxury villas for sale that are often US$4-6 million, luxury specialists from Europe and the US are backing new Asian developments aimed squarely at this luxury segment and Asian developers are now quickly adjusting the product mix at this more demanding customer who seeks space, quality design, the best views, professional international management, a yield and champagne on tap.
Introducing the event and starting the conference was LVMH Italia’s Concetta Lanciaux, who defined luxury in this new century and what it means. She broke it down into the historical aspects defining global luxury: tradition, bespoke design, best quality materials, specialist knowledge and sophisticated service, beautiful packaging and presentation, and timeless sophistication. All elements that stand today as they did 100 years ago at companies like Louis Vuitton.
Juxtaposing those traditions, values and ideals into property ensures that the sum of the parts is far greater than the individual pieces. That sum is in part physical property and also part lifestyle, associative value and rarity. A beautiful house without ALL of the elements will fetch a substantially lower value, as opposed to a residence attached to the Taj Hotel or a Four Seasons Hotel, where the premium can be as much as 100% over a standalone house.
Luxury from an architectural perspective, according to well known HK based Adrian McCarroll from Original Vision is the blend of several critical elements, all of which must be present to satisfy the demanding well healed and well traveled global citizen/buyer of tomorrow. The key word and overriding luxury disciple is: quality.
Referenced against current experiences and relating those to the hoteliers or developers dreams. The experience needs to be world class, not necessarily leading edge but given the importance of this overall referential experience it highlights the need for serious and competent communication.
Ocean frontage or that quintessential hand on drink beach photo symbolize the good life and are these days used frequently…care should be taken where the symbolism becomes too strong. The best quality brands rely less on symbolism and more on substance and substantiation through experience.
Brand names are all the rage in Asia where the brand impact has never been stronger. The risks are sometimes high as brands can be personal and sometimes the relevance can scare buyers. A Taj brand ensures exotic sophistication. An Aman branding ensures relevant high society recognition. Likewise a Philip Stark design may get a mixed response; some people love his designs whilst others see him as too modernist.
Quite simply the best brands offer traditionally the best service. Managing a luxury hotel and villa development requires a small army of often 200-300 staff. Smaller boutique operators are sometimes understaffed and under budgeted to provide quality service so check reputations carefully and try to stay in the brands´ properties, which will allow you to experience the actual service firsthand.
Luxurious suites, built in amenities and thoughtful detailing are required as all buyers are used to staying in the latest city hotels from the best 5-star operators who set the benchmarks traditionally in accommodation. His and her bathrooms, personal theatres, wine cellars, toy garages and over-sized kitchens are all in-demand features.
Definitely one of the most valuable elements of luxury. Most buyers are coming from urban environments so space is premium; big decks, balconies, gardens, large pools, plunge pools off bedrooms, outdoor salas, tennis courts and putting greens are all important elements.
If this goes wrong the house and investment is a disaster. Brand names tend to be better equipped to deal with quality finishes; just ensure they are true 5-star specialists to begin with.
Foresight saves afterthought, which saves development time that leaves you with a functional house that is built to be enjoyed. Asia is undergoing a revolution in architectural, lighting, sound, master planning and landscaping design that is cumulatively pushing the luxury mantra above current European, American and Caribbean standards.
As surprising as that may sound Asian developers with “starchitects” like Adrian are dreaming up the magic that interlink all of the elements above plus a lifestyle in an attempt to create environments that are idyllic. That magical interaction of space, culture, branding, perception, quality, design, finish and service defines “luxury” from a property perspective and integrates more closely than ever property with lifestyle.
A luxury lifestyle around a luxury property is today achievable in Phuket, Bali, Singapore, Vietnam, Japan and Hong Kong and is coming soon to China, India & Malaysia. Asia´s premium lifestyle property is at the forefront of this international trend and is already leading edge at often half the price of similar projects in European, Caribbean and US market and remains a strong buy.
Check back next month for Part 2, which will feature the current luxury trends, where the hotspots are in Asia (Phuket, Bali, Penang, China Beach), which brands are the best and where property investors should look to for future value.
Nick Anthony is managing partner of Phuket based Indigo Real Estate, Luxury specialists in Asia since 2001. He was a conference speaker and day two chairman of the event. Website: www.indigoRE.com. Email: nick@indigoRE.com. For details on Luxury Property 2008 visit www.terrapinn.com.