BANYAN Tree yesterday launched its third brand, Cassia, to signal its foray into what it regards as the "under-innovated" serviced apartment market.
Five projects are in development in Phuket, Bintan, Beruwala in Sri Lanka, the Gold Coast in Australia and Lijiang in China, with the Phuket one slated to be the first to open next year; the rest will follow in the next 11/2 to two years.
Ho Kwon Ping, the executive chairman of the Banyan Tree Group, said the group hopes to inject its design and innovation expertise into this "pretty boring", underdeveloped space.
"We are entering this space and we really intend to shake it up," he said.
He noted that up until now, serviced apartments have tended to pale in comparison to hospitality spaces; even cheaper hotels are generally bursting with "excitement and contemporary lifestyle".
So much does Mr Ho dislike the term "serviced apartment" and all it has come to represent that he has chosen to call the group's Cassia products "hotel residences" instead.
The Banyan Tree Group's Banyan Tree hotel brand follows an all-villa concept while its Angsana brand markets contemporary, chic and ecologically-sensitive hotels and resorts.
Cassia, on the other hand, will provide business and leisure travellers fully-furnished apartments for extended stay.
These units are one and two-bedroom ones ranging from 35 to 55 square metre in size, compared to the 70 to 100 sq m size of its Banyan Tree villas.
The development cost of each project ranges from $50 million to $70 million.
The new brand will be fully self-invested, meaning that it will not go into managing other hospitality groups' projects, which Banyan Tree and Angsana do under pure management contracts.
While Mr Ho said he had initially expected Cassia to attract the "hip and trendy" middle class, interest has been expressed by the group's older, wealthier clients, who hail from Russia, China, Thailand and, of course, Hong Kong and Singapore. The last two markets have been driving much of the demand in the global secondary home market, he said.
"A lot of people today are considering having a second home somewhere affordable, without having to gear up or stretch their finances, while being able to get investor income."
At a roadshow conducted here in March, buyers snapped up 70 per cent of the Phuket units and 45 per cent of the Bintan ones released under Phase One.
A roadshow for Cassia properties in Hong Kong takes place this weekend, and projects are being planned in Brisbane, New York, Tokyo, the Seychelles, Chiang Mai, Bangkok and Lang Co in Vietnam.
Prices for the apartments average about $250,000, and start at $180,000; investors can expect a net yield of 4 to 5 per cent from renting these units out, he said.
In jest, he said: "We've been selling a lot of units in Bintan to Singaporeans with a simple pitch: 'It's cheaper to buy a unit in Bintan Cassia than a car in Singapore'."
With the Angsana, Banyan and Cassia brands under its belt - starting with A, B and C respectively and taking the names of trees - the group plans to add a fourth tree to its "garden", starting with the letter "D" this time.
Banyan Tree, which turns 20 this year, believes that it has built up enough infrastructural and financial resources to launch new brands more aggressively now, he said.