Banyan drives residential growth with rental platform

Banyan Group is unveiling a rental platform on July 1 that enables anyone to book branded and unbranded residences as they would a hotel room. There are no membership requirements. Minimum length stay depends on regulations of the city/country of the residence’s location.

But this isn’t a move meant to compete with other luxury rental platforms such as Accor’s Onefinestay or Airbnb’s Luxury Retreats that feature individual homes. Neither is the platform, Banyan Living, designed to help developers pre-sell their units or villas. Instead, it focuses on facilitating rentals of its own branded residences and those of other investors and developers.

Banyan Living may be the icing on the cake for investors and developers to pick Banyan Group for marketing, distribution and revenue management deals and/or property management services upon project completion. The Singapore-based company said projects must conform to its quality standards.

The rental platform comes as the sector remains resilient. In Asia Pacific, the average pipeline growth is 72% from 2023 to 2030, according to Savills Research and Savills Global Residential Development and Consultancy. Supply increased 216% over the past decade.

“We already have an online and offline network for the sale of real estate development projects. So, the new portal will complete the circle of support to owners and developers by offering a rental service post-completion, or post-handover if we takeover an existing project,” said Michal Zitek, Banyan Group's senior director of Regional Operations and in charge of Banyan Living.

Zitek highlights increased demand for developers to partner with trusted brands, “adding merit to their creations by applying stringent quality assurance guidelines and after-sales service.”

An example is Urasaya Property Thailand, which has just completed a 15-villa beachfront resort located in Sichon in southern Thailand. The developer is betting on a new international airport terminal in Sichon to bring foreign tourists seeking an unspoiled destination. But being a small independent player in a new frontier is hard, so Urasaya has branded the project Banyan Tree Residences Sichon. One reason is Banyan Living.

Ravi Chandran, executive director of Urasaya Property, said, “Associating properties with a well-known luxury brand can lead to higher rental returns compared to independent or new brands, enhancing the property’s investment appeal.”

Chandran worked with Banyan Group for 25 years and was CEO of the group’s integrated resort Laguna Phuket before leaving in 2022.

Great expectations

Banyan Group expects “double-digit inventory growth in the near future” as market awareness about Banyan Living increases, Zitek said. The group operates 28 branded residences, either within or attached to a hotel, or stand alone. It will open another 30 properties over the next few years in Thailand, South Korea, Malaysia, Vietnam and the Philippines, but also farther afield in the Bahamas, Mexico, Greece, Dubai and Qatar.

Of the hotel company’s 10 brands, Banyan Tree, Angsana and Cassia are its key branded residences flags although it is open to use the others in future. It also operates non-hotel branded residences developments such as Skypark.

But will Banyan Living move the needle for Banyan Group to accelerate growth in the sector?

Lada Shelkovnikova, partner, Hotels & Hospitality, Watson Farley & Williams, believes so. “For non-branded residential projects specifically, this platform can add value to developers by offering wider distribution exposure, thus rental/revenue opportunities, to their individual buyers post-handover. Through its strong background in residential sales, Banyan [Group] also has a valuable buyer pool for developers, which may also play a part in future tie-ups.”

She added, “From a pure revenue-generating perspective, this platform can, to a certain extent, compensate for the lack of a whole-property rental program offering [in the absence of a branded hotel and operator that could offer an umbrella rental program].

“The other benefits of a classic rental program in a branded residential project, for example, hassle-free ownership with centralized maintenance, etc., cannot be replaced by a booking platform alone, and so we see a clear division between these two offerings.”

But there will be challenges. Shelkovnikova said while the reward for Banyan Group is clear – a more compelling proposition to developers, additional revenue stream and additional traffic drawn to their online resources – there will be several resulting issues to attend to, such as compliance matters in various jurisdictions. “Over time also, and inevitably, ensuring that the properties offered on this booking platform comply with certain standards of quality and safety may face some challenges,” she added.

Thriving together

Barry Robinson, president and managing director, International Operations, Travel & Leisure, does not see branded residences and Banyan Living as diluting adjacent programs such as vacation ownership, which Banyan Group also offers.

“Branded residences differ from vacation ownership, which is a points-based system that enables members to stay in numerous properties that are part of a club,” he said. “We like to see innovation within the industry and believe that there is space for a variety of accommodation platforms to thrive alongside each other.

“Branded residences are a response to consumer demand, and offering a direct route to book is a logical development online. If done right I don’t believe there is any negative, except for maybe having an impact on Airbnb, for [luxury consumers] will probably prefer to be attached to a brand that will ensure standards, quality of service and service delivery are met.”

As a hotel parent company, Banyan Group is already the fourth biggest branded residences player in the world, according to Savills Research dated October 2023 (see chart). Marriott International is the largest, followed by Accor and Four Seasons Hotels and Resorts.

In FY2023, the company enjoyed a record-breaking S$378 million in sales in its residences segment, an increase of 62% compared with FY2022.

Said Ho Kwon Ping, executive chairman, Banyan Group, “Around the world today, we’re doing so many branded residences because it is a whole new trend that came after COVID. A lot of people now want second homes – be it as a safe haven for political reasons or because they can work from home and so on. And when they are not using it, they probably want to make some money off it, not a huge amount but it pays for maintenance. So, we rent it out for them and manage that whole process.

“It’s a whole different marketing game and [until Banyan Living] we didn’t have a separate platform within our group to fully service them.”