Thailand’s Montara Hospitality Group has unveiled plans for a THB6 billion (USD200 million) wellness community in Phuket named Tri Vananda.
The development includes 298 villas and a state of the art wellness hotel on a land area of approximately 580 rai just northwest of Thalang.
Amenities include an organic farm, meditation center, health and diagnostic center and sports club.
Bangkok-based designers Habita are the architects with P49 doing interiors.
Residential sales are set to launch mid-year.
Tri Vananda is targeting LEED certification and will make extensive use of solar technology.
Montara Hospitality is best known for the ultra-luxury Trisara Resort and Michelin star-rated PRU restaurant.
Frankly speaking, Bali real estate remains one of Southeast Asia’s unlocked mysteries. Since the disruption by both internal and external factors such as the country’s disruptive tax amnesty program that ran from 2016 to through 2017, and succeeding volcanic eruptions, the property sector has yet to find a new normal.
Looking at what sector should be the poster child for the industry, branded hotel residences, the first indications of a market flux are clear. According to our research there are over 1,600 units in seven projects that are either on hold or have been canceled. This includes brands such as Mandarin Oriental, Jumeirah, ACCOR, and Amari. In a failure to launch syndrome, financial issues are cited as the leading cause to pause.
If you turn back the clock a decade, the branded residences segment was at the top of its game headlined by properties affiliated to Aman, Alila, W, Bulgari, Banyan Tree, Anantara and others. At that same juncture time a large critical mass of midscale condo hotels sprang into the market, capturing domestic investors real estate appetite and lure of guaranteed yields and holiday usage. Roll into 2020 and this sector has somewhat cooled, and domestic ‘off-plan’ speculative buyers have shifted focus into other products and geographic areas.
One of the fundamental characteristics of Bali that is different from say Phuket, which is Asia’s biggest resort real estate critical mass, is the lack of foreign ownership vehicles. Where in Thailand overseas buyers can buy freehold condominium properties, though there are project thresholds, this is not the case in Indonesia. Hence, the regime is leasehold and terms can vary depending on structure and interpretation by government agencies.
Legacy real estate for foreigners in Bali that started in the 1980’s and 90’s used either shorter term leased for land and villas were build or else nominee structures. The tax amnesty by and large put the nail in the coffin of the latter age old structure on a wide-spread basis. So today, projects often require two types of structures and in some cases even segregated products for domestic and international buyers.
Let’s fast forward into 2020 and look at compelling trends in Bali’s property scene –:
- Freehold is by and largely preferred by Indonesian buyer who represent over 50% of transactions. They are typically from Jakarta, Surabaya and Makassar.
- Lets’s chat about the China as roll back a few years and it was forecasted to lead the pack of volume buyers. Over the past two years as China – US trade economic issues rose, the expected volume has not materialized nor have large Chinese developers introduced yield focused entry level condo hotels as they have across Thailand.
- In pure leasehold projects, these are aimed at overseas buyers who come from Australia, North America and Europe. Three key international emerging markets are Russia, Japan and South Korea.
- Locational demand is on the move, Canggu and Berawa becoming expat haven’s surrounded by international schools, beach clubs, co-working spaces and digital nomads.
- While Seminyak, Uluwatu and Jimbaran all remain attractive depending on buyers lifestyle preferences.
While this is all a lot to take in, there remains potential in Bali’s real estate ambitions, but the new trends include smaller entry level pool villas that are priced in line with shorter lease terms. Next are co-living developments who are lifestyle centric and work on rental not ownership model. Lastly, we see more upward trajectory in lower but sustainable rental yield properties that work on more traditional real estate fundamental.
As for the new larger stop forward the elusive gamechanger remains Indonesia’s long delayed reforms on foreign ownership or at least some movement in the condominium sector.
To download and read C9 Hotelworks and Horwath HTL’s Bali Hotel and Branded Residences report click on the following link
https://c9hotelworks.com/downloads/bali-hotel-branded-residences.pdf
On the northern side of Bangtao Beach next to Maan Tawan and nearby Banyan Tree Phuket is the upcoming Sunshine Beach development.
With a plan for 771 hotel and residences units on 12.6 rai, the high-density project is targeting Mainland Chinese buyers with pricing points reportedly starting from THB4 million.
Construction is expected to start in June of this year and complete in 2022.
From our discussion with sales staff the developer has claimed they have reached an agreement with the government for beach fronting facilities in the National Park strip in front of the project.
While in Layan next to Lotus Gardens is the upcoming 400 unit Layan Green Park.
Pricing points run from THB2.5 million.
Unit configurations range from studio, to one, two and three bedrooms.
Guaranteed returns of 10% for a period of 10 years are being promoted.
Phuket’s Layan area is seeing a surge in new real estate led projects and rising land values.
At the same time as these two projects are underway, next to the Dream Beach is an n oceanfront luxury project promoting sales of Grand Beach Villa and Ocean View Suites tagged as N5.
The developer of the project is VIP Thailand who have another project in Rawai.
Based on our research the primary source market tragets of these three projects are Mainland Chinese and Russian buyers.
Local concerns in the Cherngtalay area over mounting traffic, water shortages and strain on municipal infrastructure are becoming issues.
What has long been predicted in Vietnam’s amped up condotel industry as unsustainable guaranteed returns has come home to roost.
Making news is the massive Cocobay project in Danang, who’s developer the Empire Group has reportedly stopped making guaranteed return payments to owners.
The knock-on effect of this has been on buyers who in turn have been unable to make mortgage payments to banks.
Given the scale of many Vietnam condotel project’s where units number in the thousands, expectations in the industry are for further pain in the sector where unsustainable double-digit returns have been promised to attract buyers.
In Phuket, over 50% of the incoming hotel supply currently rests in hotel residence offerings with many projects offering high-levels of guaranteed returns.
Thailand currently does not regulate the development practice despite growing calls for oversight.
The continuing wave of developers bringing hotel investment grade real estate to the Phuket real estate market is escalating.
Notable new entries include 74 units at the Melia Phuket Karon Residences are now for sale.
Pricing for one and two-bedroom units starts at THB8.4 million.
A 7% three-year guarantee is offered with 30 days owner usage.
Meanwhile at the newly launched Radisson Mai Khao 110 condominium hotel residences range from 41-132 square meters.
Prices go from THB7.2 million with a three-year guaranteed return of 6%.
Laguna Phuket which is a good barometer of the island’s broader resort-grade real estate sector recently launched their Skypark entry level condominium under THB3 million.
As real estate prices shrink, so is unit size and pressure on the once dominant villa market is mounting.
There is growing concern that Phuket’s current real estate cycle is starting to mimic the big box condominium build-up in Spain’s resort property sector in the early to mid-2000’s and later came unhinged during the global financial crisis.
While a number of property offerings in Phuket, Hua Hin, Pattaya, Chiang Mai and more recently in Bangkok have promoted themselves as retirement-centric offerings, the jury is still out on the broad success of the sector.
Despite retirement communities and assisted living being mainstays in Western countries like the United State, U.K. and Australia, these are for the most highly domestic offerings.
Some of the key market challenges are the absence of a secondary sales market, disconnect with national healthcare schemes, difficulties in financing offerings and the sheer distance from relatives or family units. Additionally, intrinsic differences in nationalities of prospective end-users has created a somewhat confusing potential geographic source of business.
Thailand does have a widely promoted retirement visa program but it has not been linked to the real estate market. Malaysia’s ‘My Second Home’ initiative has been a leader in Asia and has effectively tapped these two issues.
Two developments that are being watched in the property world in the Kingdom, the first is Nye Estate’s Otium Living which is working closely with the U.K. retirement specialist group Audley Villages, with its initial offering coming to Phuket’s MontAzure in Kamala and plans to expand in Bangkok.
Second is MQDC’s The Forestias in Bangkok which is aimed at multi-generational living. A number of iconic groups are involved in this undertaking including the Foster + Partners, Six Senses and Harvard T H Chan School of Public Health on wellness. What’s unique about this project is the inclusion of older generational housing into a larger green, eco and family- oriented community.
At C9 Hotelworks we have advised on a number of retirement projects in Thailand, Philippines, Mainland China and Japan. One of the key issues for the sector has been developers who are looking to simply brand real estate and not do the hard yards on programing a working community.
One clear idea that is emerging, that we feel has strong broader potential is a shift from a property offering into shorter-term lease options, membership or rentals. This becomes a recurring cash flow play versus the typical blow and go real estate structure.
A strong indicator of the upside potential is Australia’s property group Lendlease’s estimated USD1.4 billion investment into Mainland China’s senior living marketplace. On offer are transferable long-term memberships with a value of approximately USD250,000. Wellness and hospitality offerings are key components of the end-product.
The reality of lower, more rationale pricing points with an understanding that senior living is transitory in nature and the long-term prospects will be a transfer into assisted-living or family care.
We continue to see real estate developers go blindly into creating offerings which do not recognize the need to build a secondary resale mechanism as well and trying to price offerings on legacy real estate models. For the most part these are going to be highly stressed financial models and not sustainable.
Senior and/or retirement living is a reality for a graying Asia, but for now, the lack of fundamental models and reality has yet to take hold. It will be interesting to see how Lendlease’s China outing goes, but they certainly look to be set on the right path ahead.
As for the prospects of the Kingdom, one astonishing data point on Thailand’s potential for senior living is that by 2030, according to the United Nations a quarter of the population will be over 60 years of age. Falling birth rates and an aging population have created a first world situation in the making. There is a growing long-term market, if someone can just create the right product.
Laguna Phuket has launched a new entry-level condominium project named SKYPARK.
Pre-launch pricing ranges from THB2.9 to 4.3 million for fully furnished units.
The SKYPARK development has three condominium blocks of approximately 140 units each, so 420 units in all.
Unit types start at studios (28 square meters), one-bedroom (30-39 square meters) and two-bedroom (40-60 square meters).
Features include rooftop sky pools and a linked bridge between buildings.
A numbers of units have golf course view and the developed is located in the main Laguna Phuket complex before the entrance of Laguna Park.
Reportedly the pre-launch sales have already exceeded 30 units.
Thai developer Boon Yongsakul’s latest development Shambala Grand Villa in Cherngtalay has experienced strong pre-launch sales.
With 22 available units, the Boat Pattana group has already reserved 17 units.
The landed properties feature two-bedroom pool villas with land plots ranging from 300 to 600 square meters.
Property management is through an affiliated company and buyers are offered a 6% guaranteed return.
Pricing for a fully furnished units starts at THB16.9 million.
Freehold and leasehold options are available.
Boat Pattana’s other developments include the nearby Cherngtalay’s Boat Avenue.
For more details email [email protected]
Thailand’s Department of Public Works and Town & Country Planning, within the Ministry of Interior is set to finalize sweeping development regulation changes for Phuket.
In April the draft regulations were issued for public comment and it is expected the new set of rules will come into effect over the next year, pending review.
The biggest change in the regulations will be implementation of a FAR allocation (floor area ratio) to land size that is typically used in urban locations to manage density.
Nervous developers are looking at how size of public roadways in the new rules will likely reduce development GFA on plots in many areas and a knock-on effect is land values that will potentially shift down if cases where building footprints are lowered.
As Phuket is moving towards an urbanizing trend the application of these new regulations is needed to control the current situation.
Expect a rapid escalation of permit applications by developers looking to get in front of the changes over the next few months, thoough its not year clear when the final rules will come into effect.
