South Korea branded residences among world’s highest premiums

Branded residences often command premiums of up to four times the average built-up sales price

South Korea’s luxury real estate market has evolved significantly, shifting from traditional residential properties to innovative branded residences. This trend began in 2008 when The Ananti Hotel introduced a pioneering co-ownership model, targeting affluent buyers seeking luxury vacation homes and social prestige. Following its success, domestic brands such as Lotte and Hanwha Resorts also adopted the model.

Recently, international players like Marriott, Banyan Tree, and Capella have entered the market, adding investment appeal with structured rental programs. According to a new report by consulting group C9 Hotelworks in their South Korea Hotel Branded Residences Market Review 2024, this is just the tip of the iceberg of a growing trend across the country.

Today, branded residences are recognised as high-value investments in South Korea’s luxury real estate sector. These properties often command premiums of up to four times the average built-up sales price. Seoul leads the nation with the highest built-up sales price, reaching USD28,713 per square metre this year. However, branded residences in resort destinations often have even higher price premiums than those in urban centres.

Jeju and Gangwon-do, two of the country’s emerging resort markets, have experienced significant growth, driven by increasing tourism. The convenient access from Seoul has fuelled demand for secondary homes and investment properties in these areas. Branded residences with well-known affiliations are breaking sales price records while maintaining above-average sales paces, as they are perceived to offer higher investment value with less risk. Currently, branded residences in Jeju and Gangwon-do have built-up sales prices four and six times higher than the market-wide averages, respectively.

Key trends identified in C9 Hotelworks’ research include:

• Seoul boasts the highest built-up sales price at USD28,713 per square metre, followed by Jeju at USD 15,084, Gangwon-do at USD 12,629, and Busan at USD 10,508. Prices are strongly influenced by the property’s location.
• Branded residences command stronger price premiums in secondary housing markets like Jeju and Gangwon-do, compared to primary markets like Seoul and Busan. This is because primary markets tend to have a higher concentration of premium pure-residential developments, especially in well-developed areas, which elevates market-wide prices.
• Brand premiums play a major role in resort destinations, where branded residences command prices between 4.42 to 6.06 times higher than the market average, compared to two to three times in cities.

In conclusion, C9 Hotelworks forecasts continued growth in the demand for branded residences in South Korea, driven by the introduction of attractive rental management programs from international hotel brands. The competitive pricing of these properties positions branded residences as a viable alternative asset class in the broader real estate market.

For further insights, check out C9 Hotelworks’ latest South Korea Branded Residences Market Review.

About Bill Barnett

Bill Barnett — a globally recognised hospitality, tourism, and real estate advisor — is the founder and managing director of Asia-based C9 Hotelworks and esteemed member of the PropertyGuru Asia Property Awards (Greater Niseko) Judging Panel.

In addition to being a leading consultant, he is a frequent speaker at industry events and conferences.  With over 30 years’ experience in the Asia Pacific region, he has an extensive background in hotel operations, development, and asset management. His past employment highlights include Senior Corporate roles at international hotel chains and publically listed companies. Bill is considered to be one of the foremost industry experts in the hotel residences sector.  To date, Bill is the author of four books on travel, property, and hospitality under the titles of Slave to the Bean, Collective Swag, It Might Get Weird and Last Call.

For more information, email: [email protected].