The Phuket Branded Residences Session – A Real Estate Industry Learning Event

Phuket real estate hit record highs in 2023 and as we move through this year overseas and domestic buying momentum is robust.  The resort island continues to be one of Asia’s leading resort destinations but is also turning into an international community.

One of the leading trends is branded residences, with more than half of Phuket’s hotel pipeline now being mixed-use developments. This event will be a great opportunity to understand the market from leading experts, get the latest data, and dive inside the numbers on advice and best practices in the sector.

Join us on Friday 29^th March 2024 at the Amora Beach Resort Phuket, Bangtao for a fast-paced, candid, 90-minute primer on the latest in Phuket property with a special focus on branded residences. Organized by PropertyGuru Asia Property Awards and DD Property with HLB Thailand and C9 Hotelworks.  Registration opens at 3:00 pm, with the program running from 4:00- 5:30 pm. Networking cocktails to follow.

Introducing PropertyGuru 2024 Phuket Awards

Jules Kay, Managing Director, PropertyGuru Asia Property Awards

Inside the Data. Phuket Property Transaction Trends

Dave Apirakviriya, General Manager – Think of Living & Thailand Marketplaces, DD Property

Phuket Branded Residences Market Update

Bill Barnett, Managing Director, C9 Hotelworks

Tax Benefits of Long-Term Resident Visa for Foreign Property Owners

Paul Ashburn, Co-Managing Partner, HLB Thailand

A Developers Perspective – Branded Properties

Stuart Reading, Managing Director – Group Property Development, Banyan Group

Yana Chuvalova, Director of Sales and Marketing, Amal Development

Faheem Ahmed, Chairman, Mishari Limited

(Moderator) David Johnson, Chief Executive Officer, Delivering Asia Communications

Designing Branded and Managed Residences

Attasit Intrachooti, Architect & Developer, Botanica Luxury Villas

Marco Antonio Duran Mendoza, Senior Architectural Design Manager, Archetype

Freek Jansen, Branch Manager South East Asia, Dewan Architects + Engineers

(Moderator) Sumi Soorian, Chief Commercial and Branding Officer, The Headland Phuket

Attendance is free,  CLICK to register

Bali is back and tourism is booming. Did you know in 2023 5.3 million international visitor arrivals and nearly 10 million domestic travelers went to Bali? Read the latest on one of Asia’s best-known travel destinations in C9 Hotelworks and Horwath HTL Bali Hotel and Branded Residences 2024 report.

Top tourism source markets include Australia, UK, USA, and rising star India. Rates are staying high. For demand, with the market strong, Kuta, Legian, and Sanur have moved up the scale. Expectations for the year are strong on fundamental stability.

Turning to branded residences, the property market remains hot with a mix of both Indonesian and foreign buyers. Mixed-use properties and investment-oriented real estate are leading trends. We expect a new wave of international branded properties to be announced soon as projects are moving to the development phase.

To read the full Bali Hotel and Branded Residences 2024 report CLICK

The Philippines branded residences market is experiencing a significant maturation, impacted by urbanization and a post-pandemic shift in lifestyle changes. The market is poised for a high level of growth. C9 Hotelworks newly released Philippines Branded Residences Market Update shows a 105% increase in the pipeline, translating to an additional 5,599 units supplementing the current supply of 5,319 units. Metro Manila, accounts for 43% of the total upcoming branded residence projects, underscoring the metropolis’s draw as a center for high-end residential development.

Recent trends indicate a pivot toward smaller, more efficient unit sizes in newer projects, reflecting a nuanced approach to changing consumer preferences, and a strategy by developers to drive volume sales with entry-level products. This shift dovetails with the broader transition towards mixed-use developments that are focused on attracting buyers with branded products at premium pricing points.

Geographically, the Philippines’ branded residences market exhibits a pronounced contrast between urban and resort locations. Urban areas, led by Metro Manila, overwhelmingly favor condominiums, while much of the new incoming supply in the Visayas and Palawan is mostly resort-based as part of a hospitality operation. This highlights the varied market dynamics, with Metro Manila appealing to those seeking an urbanized lifestyle, while the resort areas offer leisure-style living and vacation homes, Both segments reflect the country’s rapidly diversifying real estate offerings.

As the Philippines’ branded residence segment in location and product type, we expect a continued inflow of global brands. These brands mirror a real estate sector that is rising in prominence on an international scale moving forward.

To read and download C9 Hotelworks Philippines Branded Residences Market Update CLICK

The release of plans for a massive highway interchange in North Phuket is spurring development activity in the Mai Khao area. A Mueang Mai interchange on the road leading to Phuket International Airport on the island’s main North-South artery will also have a  direct connection to the East Coast spur highway 4027.  (CLICK to see map)

This is expected to create significant growth of traffic to the island’s East side where over 70% of the spur roadway that starts at the Heroines Monument has been widened. Part of the Interchange will see the final stretch of road to Mueng Mai widened to complete a 4 lane highway from the airport via the East Coast.

Currently, plans call for the construction of an underpass at the Heroines Monument to start later this year, which is expected to create a gridlock situation for North-South traffic and access to the airport. Given the underpass will be a multi-year project, this is anticipated to mostly affect travelers in the South, Patong, and central part of the island, with the movement of tourists and those looking to get to from the airport.

Property developers who have been hit by high land prices in the Bangtao Chengtalay area where land per rai is exceeding THB20 million are now looking to Pa Klok where values are currently 1/3 of the West Coast areas.

As for those who were wondering why Bumrungrad chose the Mueng Mai/Mai Khao area, the new interchange is expected to create a large commercial and residential district.  A well-known retail developer is holding a large parcel adjacent to the interchange.

Looking at the current real estate trends in Phuket, C9 Hotelworks research is showing some investors who bought multiple properties in estates or condominiums are starting to bring these into the secondary market to take profits. We expect a larger influx of secondary units in both single detached homes and villas, as well as condominiums

With new project launches now peaking and some notable ones coming in the next 3-4 months, by mid-year, the competitive landscape between off-plan and secondary market units is anticipated to become more competitive and price-driven.  While 2023 was a record-setting year for transactions, we look at 2024 to continue rising by the sheer metric of new project launches and mass market sales.

That said, there are mounting concerns about an over-reliance on Russian and Eastern European buyers, and by mid-year developers will be forced to look for new markets and return to more focused sales and marketing activities in diverse geographic sources of buyers.

One final trend to take note of is that there is movement in the end-user segment of buyers of those seeking less traffic but still seeing Phuket International Airport as a key lifestyle indicator. This journey is over the Sarasin Bridge in Phang Nga.  Here,  foreign retirees and empty-nest couples are moving to the Thai Muang area and even further North to Khao Lak where land values are lower than Phuket prime areas by 50-75% in some cases. The four-lane highway North has increased access and we expect the coastal drift up to continue.

Overseas investment sentiment in Japan’s hospitality and real estate markets is high. With a favorable Japanese yen exchange rate and a stabilized financial sector, this is one of Asia’s true success stories in 2023.

In the heart of Tokyo, an extraordinary trend is reshaping the landscape of the real estate market. The ultra-luxury residential sector is achieving unprecedented sales, setting new records in pricing that defy conventional market norms. Tokyo has emerged as a global hub for opulent living, drawing the attention of discerning buyers worldwide as the city’s skyline undergoes a transformative evolution.

Fueled by a convergence of economic factors, regional dynamics, and innovative architectural endeavors, Tokyo’s ultra-luxury real estate market is experiencing a renaissance. While the demand for ultra-luxury units likely existed but remained dormant due to limited supply, the recent influx of these units into the market has awakened and invigorated the segment. Tokyo is metamorphosing into an exclusive playground for the elite, where luxury residences transcend mere physical structures, intertwining seamlessly with Tokyo’s rich history, cutting-edge technology, and the perfect balance of tradition and modernity.

While the Aman Residences set branded residences pricing records, C9 Hotelworks is seeing not only hotel brands active in the space but luxury automotive brands. There is a strong underlying current of strong developer and consumer demand for brands, so we also expect fashion brands to enter the market. The Aman phenomenon has spurred a second project for their Janu brand with a hotel and residences recently announced.

The influx of foreign investors has played a pivotal role in driving this demand, enticed by Tokyo’s stability, economic growth, and the promise of substantial returns on investment. Moreover, Tokyo’s luxury residences owe their success to visionary architects and developers who have pushed boundaries, creating masterpieces that redefine luxury living.  Notable developments, such as Mori Building’s Azabudai Hills and Mitsui Fudosan’s Mita Garden Hills, showcase the city’s commitment to unparalleled quality and potential.

As Tokyo continues its transformation, marked by large-scale redevelopment projects in areas like Toranomon and Azabu–dai, the ultra-luxury residential market is poised for further evolution. The city’s stability, combined with its status as both an ultra-luxury residential hub and a sought-after luxury travel destination, fosters the increasing demand for high-end residential units. All these unfolding events and developments collectively sketch a promising outlook for the future of Tokyo’s ultra-luxury residential market.

To download and read C9 Hotelworks Toyko Ultra-Luxury Property Market Review 2023 CLICK

C9 Hotelworks has compiled a comprehensive investment report on the Phuket economy. Covering key island economic data including tourism, hotels, real estate, key demand generators, and infrastructure, the report features key metrics and takes a forward look at the potential shift in Phuket’s development.

Phuket has experienced a remarkably sustained tourism growth trajectory over the past 40 years. Since the emergence of Asia’s tiger economies in the 1980s, its strategic geographic location and the rise of Thailand as one of the world’s major tourism destinations have created a strong service sector.

The island’s tourism journey has seen a continued progression, starting with budget travelers and European snowbirds escaping the winter, and onwards to market maturity. Throughout this time, Phuket witnessed the birth of iconic tropical pool resorts and was the starting point for two global luxury brands: Aman Resorts and Banyan Tree.

Within close proximity to two of Asia’s leading financial markets, Hong Kong and Singapore, Phuket’s hotel, tourism, and real estate sectors have accumulated considerable direct foreign investment over the years. Its strong and successful track record has continued to attract Thai institutional capital and overseas private equity, family offices, and publicly listed investors.

Moving through the global pandemic, the Phuket Sandbox was the starting point for Thailand’s international reopening and Phuket was the first Southeast Asian resort market to welcome global visitors. COVID-19 also led to a boom in the island’s luxury real estate sector, as both domestic and foreign high-net-worth buyers opted for a new lifestyle choice.

Global economic events have seen soaring inbound migration to Phuket from a growing set of source markets. This growth has created one of Asia’s most dynamic and diverse international communities. With a fast-moving tourism and property market, we are now witnessing a rapid diversification of the economy into areas such as international education, health and wellness, retail, and marine industries.

This report is intended to provide insight into Phuket’s destination upcycling, its key economic indicators, and growth potential. Our conclusion is that the island is entering a noteworthy new era of development that will create a platform for one of the region’s most desirable international destinations.

To download and read The Phuket Report – Economy In Transition CLICK

Phuket’s once-quiet beachside west coast community of Bangtao is experiencing an unparalleled surge in real estate development. According to new research from C9 Hotelworks, there are currently 7,842 condominium units (click to see upcoming project map). Added to the supply influx are just over 2,400 upscale and luxury homes, which equate to a pipeline of more than 10,000 residential units in the market.

In what is a fragmented neighborhood of Bangtao, Laguna, Cherngtalay, and Layan, these areas traditionally formed what is a tourism-oriented district. All of this is now changing, and the influx of real estate projects looks to recast the area as Phuket’s ‘Gold Coast’ in what is an emerging metropolitan area.

Despite a methodical pace of property growth over the past two decades, the post-pandemic inward migration onslaught of expatriates has been nothing short of phenomenal. Inland land prices in the area have more than tripled over the past 24 months, where land that had been THB8-10 million a rai is now THB25-30 million.

One of the key triggers of the property boom has been the Russian-Ukraine conflict, which has supercharged what was already a growing geographic source of business for tourists and real estate. Russian buyers now account for the lion’s share of properties, though there continues to be diversity in broader terms. Coupling with the incoming Eastern European growth is a steady stream of lifestyle buyers who are jumping onto the urban flight trend to work from home and focus on quality of life away from highly populated cities.

There is a rapid rise in new residents from the US, Singapore, Hong Kong, China, and Europe. Key to the migration storyline has been the widely popular Thailand Elite long-term visa program as well as the government-initiated retirement visa. A secondary demand generator has been the strong growth of international schools, which are now in double digits in size and expanding. These offer access to dependent and/or guardian visas.

Moving back to the makeover of Bangtao from a tourist area into an international community, there is an escalation of residential properties in size versus hotels. C9’s research shows there are 2,837 rooms/key of international standard properties in the expansive area. These are now being dwarfed by property development, which creates challenges and a potential problem of unlicensed tourism accommodation.

Thailand’s Hotel Act, as it stands now, makes it difficult and in many cases impossible for residential condominiums or villa estates to obtain hotel licenses. For condominiums, the conversion from residential use to commercial use that is required for a hotel license has been stymied at local approval levels and remains a contentious issue.

What is apparent with over 10,000 new properties coming up is that not all buyers will be end-users or owners of holiday/second homes. In many cases, residential buyers have expectations of high rental yields from a flourishing Phuket tourism market, yet they might face problems in the future as projects lack hotel licenses. For the traditional hotel sector, there is concern over unfair competition from the informal rental market.

Realistically, the lack of a licensing mechanism for residential properties is putting the government at a substantial tax disadvantage, and funds that could be earmarked for badly needed infrastructure are an opportunity missed. Safety in non-licensed accommodation should also be a critical area of concern.

As to who is developing the upcoming projects, these are comprised of three main groups. Laguna Phuket remains the largest land bank in the Greater Bangtao area, and it has shifted focus from tourism to real estate as an economic necessity. With more projects within the main destination resort area, the company will also push into a new mixed-use community north of Laguna Village.

On the Thai development front, post-COVID19 has seen Bangkok developers active, such as CPN (Central Pattana), One Origin, AssetWise, and Sansiri. Local groups include Boat Pattana, Botanica, and Anchan. Given the escalation of land prices, the current state of play favors mid-rise condominiums as the only way developers can make an economic case with underlying land costs.

For the third group, Eastern European, or mainly Russian developers have flocked to the Bangtao area as market sentiment is at its highest level. These projects account for at least half of the total condominium units coming to market, due to the greater density of development. At the end of the day, rising land acquisition costs are spurring this trend.

Another change for Phuket property is the escalation of commissions which remain unstandardized. In many of the new Bangtao properties that lack brand or strong customer bases, commissions have risen to 7-10 percent. In certain cases, even a cash bonus of up to THB100,000 has been added to the incentive.

Whereas more traditional projects would have seen lower commissions and higher marketing costs, developers are now becoming massively reliant on a growing brokerage base. A growth spurt of Russian and Eastern European agents now sees projects chasing them for prospective buyers. Certainly, brokerage has taken center stage for the moment, though there remain questions as to the depth of their customer base longer term. One good example of underlying growth in brokerage is the leading portal FazWaz, which has established a strong base for online buyer generation.

Lastly, larger property groups are closely watching the formation of new Phuket development regulations. This is regulated by the Phuket Department of Public Works and Town and Country Planning together with the Bangkok-based Ministry of Natural Resources and Environment which oversees Environmental Regulations.

In C9’s discussions with experts on the draft plan which is expected to formalize in 2024, there will be a greater alignment to Bangkok-type rules that focus on FAR (floor area ratio) and higher minimum-road width for mid-rise development. It’s likely that given Phuket’s growth, certain areas will be zoned for high-rise development.

These changes, while needed, will come too late to address growing traffic concerns. The addition of over 10,000 new residential properties to the Bangtao area will see an uptick of large construction vehicles, a large-scale growth in private vehicles, and is a serious situation that has to become a government priority. Sadly, there is no blueprint structure for an expanding Bangtao metropolitan district that crosses many local jurisdictions. The most glaring immediate need is a traffic study and action plan by the municipality and highway department.

As a final point, one missing link in the growth of residential units is the lack of diversification of larger demand generators such as a full-service hospital, central parking structures, commercial buildings, international convention center, public parks, and pedestrian-friendly access. This, of course, is at odds with sky-high property prices that dictate highly dense projects to make economic sense. What is desperately needed is a Phuket Master Plan and acceleration of transportation infrastructure.

Bangtao’s journey into a metropolitan, ‘Gold Coast’ community is well underway, and we do expect cyclical growth to continue into the high season, but there is also a tendency to wonder: when does the market peak, and what comes next?

To view C9 Hotelworks Latest Phuket Hotel Market Update 2023 CLICK

C9 Hotelworks has released an exciting new market research report Habuba Tourism and Property Market Review.

Hakuba, renowned for being part of the 1998 Nagano Winter Olympics, has evolved from a seasonal Australian-focused skiing destination into a year-round getaway.   It is located within a three-hour drive from Tokyo. The valley has witnessed increasing development, attracting emerging markets from Asia, notably Taiwan, Hong Kong, and Singapore. Furthermore, the COVID-19 pandemic rejuvenated the appeal of high-quality ski destinations in the domestic market.

The robust growth extends beyond tourism to the property market, driven by a rising demand for holiday rental homes. Traditionally, Hakuba focused on the development of ski chalets with classic alpine designs, which remain prominent. Nevertheless, the market is now witnessing an influx of condominium projects, exemplified by the successful ROKA Residences development. Offering units ranging from two to five bedrooms with ski-in/ski-out access, this luxury project by Hakuba Mirai experienced strong sales during the pandemic.

A noteworthy development generating excitement in the market is the debut of the Banyan Tree Resort and Branded Residences in Hakuba. This represents the first entry of a hotel and branded residences into the market. Situated in the Wadano and Happo areas of Hakuba, the project encompasses 105 hotel rooms and 32 condominium units available for purchase, all providing convenient ski-in/ski-out access to the Happo-one ski resort.

In line with the Niseko market, ski-in/ski-out access on prime land continues to be the preferred choice. Given the presence of undeveloped, affordable land in Hakuba, we view the market fundamentals favorably.

To read and download the full report CLICK