Opinion

Friday Letter And the brand played on

A few years ago, a Hong Kong hotelier told a PERE reporter about the curious buying habits of the Chinese. While tourists and visitors to Hong Kong would trek into mainland China to buy counterfeit luxury goods, Chinese nationals were increasingly coming into Hong Kong to buy the real thing.  

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This sort of brand consciousness can also be seen in the world of Chinese real estate. Earlier this year, a principal at one Asia-focused private equity real estate firm told PERE that, for some Chinese, living in a branded apartment was “very important.” In a Q&A with the Wall Street Journal this week, Robert Toll, head of US residential developer Toll Brothers, echoed those sentiments, noting that Chinese buyers are obsessed with amenities like white oak wood floors imported from Germany.

“[The Chinese] are 100 times more brand conscious than we are, to the point of silliness,” he told the paper. “The Chinese have to buy the brand.”

Such silliness, of course, is not limited to China. One only need flip through the real estate pages of any big-city US newspaper to see a similar phenomenon in America. Big-name architects like Richard Meier and Daniel Liebeskind. Interiors designed by Armani. Kitchens equipped with Sub-Zero refrigerators and Viking stoves. Developers are using all of it and more to appeal to brand-conscious homebuyers. (Almost weekly, it seems, the trend is hitting new lows: Just witness hotelier André Balazs’ newest New York condo project, a luxury building in the Financial District tastefully branded with a jet-setting, brandy-swilling cartoon beaver.)

Back across the Pacific, branded properties are becoming increasingly popular in another hot property market: Tokyo. Earlier this year, industry practitioners told PERE that some residents are demanding bigger and better apartments, equipped with everything from higher ceilings and fancier kitchens to internet-ready apartments and satellite television hookups. Not only are developers looking to up the luxury quotient, they are also trying to build branded products that target a specific demographic, for example, retirees, singles or even owners with pets.

“[Allowing pets] can really expand your tenant base,” Alec Menikoff, the Tokyo-based general manager of the investment division of property consultant Colliers Halifax, said.

As real estate becomes an increasingly global business, professionals often note the vast differences that can be found from market to market. Nevertheless, it’s nice to see that conspicuous consumption knows no borders.