Revitalized Phuket Town to boost tourism

PHUKET: Revitalization of Phuket Town’s Sino-Portuguese heritage was the topic of a seminar held by the Senate Tourism Committee on July 30, led by Phuket Senator Thanyarat Atchariyachai and Phuket City Municipality at the Metropole Hotel.

Speaking at the seminar, Phuket City Mayor Somjai Suwansupana explained that there were three major plans for the project.

The first is to develop a historical trail as a “living musem” in Old Phuket Town with improved footpaths, signage, and to move cables underground, she said.

The second plan calls for structural improvements of buildings along the historical trail and the environment surrounding them. This phase also calls for the development of Klong Bang Yai canal as a recreation spot in Town and the construction of a multi-purpose public facility in Queen Sirikit Park.

The proposed building on what is now a parking lot will provide a venue for Phuket Town’s multiple festivals, among other things. There will also be a tourist information center in the building to promote the area and educate tourists on its history, such as Thalang Road’s past as a bustling commercial street.

Also to be spruced up are the old Chartered Bank and police station, which will become Peranakan museums.

The third part of the project is to renovate buildings on Thalang Road to showcase their Sino-Portuguese architecture in what will be a prototype for further development in Old Phuket Town.

Sen Thanyarat said, “Phuket is now a world class [tourist] destination with about 5-6 million visitors a year, but only 3% of them visit Phuket Town. The Tourism Committee sees that the Sino-Portuguese culture can be preserved and revitalized, as there are tourists who come here not only to enjoy nature, but for heritage tourism.

“I, as a Phuket resident, have observed the changes in Phuket’s economy. The business center of the island is no longer in Town, but on the beaches, so it’s important to develop Phuket Town to attract tourists.”

Mayor Somjai said, “This project study will support tourism activities in Phuket Town, and it will also contribute to cultural and economic revivals.

“In the long-term, it could also lead to the designation of the area as a World Heritage site, like Malaysia’s Malacca and Georgetown.”

Most of the 150 people attending the seminar supported the plans and the promotion of tourism in Phuket Town. However, the alteration of any buildings must be agreed on by the residents and impact assessments must be conducted before moving forward. From Phuketgazette

Defining The Property Boom

The Phuket Gazette.

Riding a bull market is never an easy thing, and at times could mimic one of those mechanical contraptions that threw many aspiring cowboys into dazed ‘n confusionville.

Looking back at my time on the island, it’s hard to view more of a high water market for resort real estate then the middle part of the decade, when the world was indeed a gentler and kinder place.

Birds could be heard singing most mornings and anxious buyers were eagerly transacting as demand far outstripped supply in what could be said were halcyon days.

Success for many is a highly subjective thing, but for me, a pair of expat developers – perhaps more than anyone I can think of – set the bar for selling and delivering property into the hands of anxious buyers.

Brit Paul Moorhouse and American Don Taylor started off on the doorstep of Laguna Phuket with their ambitious Lakeshore Villa development when empty house lots still dotted the resort’s golf course.

The migration of Hong Kong expatriates into the islands real estate market for a second home or retirement in paradise was still just a twinkle in the eye.

Taking up the idea that big was better, and relying on tropical designs, the pair came in at ground zero of what was to become a fanatic movement in the years to come. Next came a foray at Tinlay Place for Pepper’s Bar and the former Lakewood Hills in what was considered only a Bangtao ‘outpost’ at the time. Now it has become a well recognized cornerstone of other nearby estates.

Size did indeed matter and Lakewood grew while setting new milestones for other developers to follow. Always ahead of the curve, they next set their collective ambitions on providing quality premium office space at Plaza Del Mar, which today plays home to a number of international businesses.

After many years of working together, the partners decided to move into the next era of their lives as Don ventured to Bangkok and finally Vietnam, in various real estate ventures in Indochina.

For Paul, scale was appealing, so he created Layan Gardens and later bought into Luna Phuket, both within a stone’s throw of each other. Switching back from condos to pool villas, he worked tirelessly in attracting potential buyers at regional road shows and through advertising and promotions.

While the grind became just that as of late, Paul looked for smaller projects, such as redevelopment of a luxury villa in Cape Panwa, potential in the highly-charged Bangkok condo market and now a boutique property in Kata.

While both gentlemen now split their time in various parts of Thailand and abroad, from time to time you still see them in all of the familiar places in Phuket and suddenly it takes you back to how things once were in boomtown.

Succeeding in business in your own country is hard enough, but coming to a strange land and making your mark is not only an accomplishment, but also a sign of willingness to take risk, work endlessly and believe in what you are doing. Hopefully a little luck also trails behind you, like those beaming rays of sunshine on a cloudy day.

Phuket has its share of success stories and there are far too many to recount in this column, but Don and Paul somehow embody the spirit of success that continues to lure budding entrepreneurs to Asia and should continue to do so for many years ahead.

Stress Settles In At Condominium Hotels

The Nation.

Pigeonholing residential-led hospitality products has never been an easy task. For global brands that love to classify hotel-chain tier segments, the exercise has created absolute chaos in the meeting room strategy sessions. The only outcome has been bloodshot eyes and a grocery list a kilometer long.

Names over the years have ranged from condo hotels or the more ubiquitous condotels, residences, apartment hotels, suites, apartels, serviced apartments, extended stay, villa resorts and frankly, more incarnations then you can shake a stick at.

Second homes, vacation or holiday houses and investment properties have been with us for as long as mankind has realized that all work and no play makes Jack a dull boy: I can imagine the cavemen of prehistory looking at little underground caverns by the sea, thinking of them as holiday homes, and imagining how nice it would be to get away for a relaxing weekend.

Property developers took to the craze with equal fervor as they imagined entirely new markets of potential buyers looking not only at rental yields but also the major allure of that marketing buzzword “lifestyle”.

Perhaps no other word in holiday lingo has inspired so many tourists from faraway places, after falling off an airplane and becoming caught up in soft winds, swaying palms, the gentle caress of the sun and perhaps a few too many Mai Tais, so sign on the dotted line for their own little piece of paradise.

As in all things that are molded into tasty bite sized pieces and carefully packaged, the condo hotel craze was developed, marketed and embraced by Americans. Much as their spacecraft, took men to walk on the Moon, US property developers flocked to the notion of selling property in dreamland.

The sector has had a chequered history, no dissimilar to the table cloth in an Italian restaurant. High profile legal cases in the US and Australia found, in some landmark decisions, that sellers were not engaging in real-estate transactions, but in the sale of securities. That opened a Pandora’s Box of litigation, damage claims and bankruptcies.

In time, the industry moved forward – after significant government regulation. Today there are many fine markets – such as that in Hawaii – which see a dominant portion of hotel units that arc in fact condo hotels or managed residences.

While financial excesses during the financial boom of the early to middle part of the decade saw a resurgence of this kind of investment property in North America, and even the appearance of an urban model, the global financial crisis has left the segment battered and bruised.

While Asia loads the world in many aspects of the holiday business, it often lags behind the trends and products developed in the West. Perhaps it’s the distance, or a bad case jet lag, or maybe they took a boat instead of an airplane.

The past few years has seen a surge in residential-led hospitality products in both the region and Thailand that is bucking the larger global trend. Liquidity, increasingly easy and affordable access and low interest rates are driving consumers to invest.

Promises ranging from guaranteed returns, free use and prestigious brand management are fuelling much of the frenzy, which is not only aimed at the resort markets but is also growing into metropolitan areas. Breakfast at Tiffany’s is a hard act to follow and for many the allure of hotel living- even if only on a part time basis – remains shiny and sticky sweet.

Despite the private sector moving ahead at full throttle, Government regulation has lapsed in terms of key regulations and controls over the licensing of these establishments as hotels, the tax implications, guaranteed financial returns and consumer issues, including sustained brand-operator assurances.

At the same time, many inexperienced developers have tuned rental splits for purchasers at unsustainable levels. In some instances this has resulted in hotel operators facing financially unsustainable ongoing operations.

While Thailand Condominium Juristic Act saw an overhaul last year into a much more consumer-oriented model, much alternative property is sold to foreigners under leasehold, and this arrangement has yet to see a similar structure. Even coutry’s Hotel Act, which was revised a few years ago to take in serviced apartments, has so far failed to address condominium, apartment and villa hotel managed units in a comprehensive manner.

The marketplace seems set for success and for failure on the part of both buyers and sellers. Meanwhile, Thailand needs to look at the issue of improved regulations and to set the wheels in motion for a broader scale of reform and regulation.

In The Shade Of Mixed-Use Property

The Phuket Gazette.

Glossy ads and promises of investment returns that hit the moon abound. Seduced by an illusion of vacations for life in some tropical paradise, just sit back and have another mojito and settle into an afternoon cabana snooze dreaming of an endless money train.

Throw in alluring service at every whim, and for those at the top a leading global hotel brand that could just be the rim of salt at the top of an oh-so-tasty margarita.

Truth be known, though, in so many cases the honeymoon ends early and property investors metaphorically wake up the next day in some saggy mattress joint to the whirl of an electric fan, covered in exhausted limes with the life squeezed out of them.

Was it all a dream? Is the bar open yet, though it’s only 7am? Time for the reality check and indeed hotel-managed investment property has a long history of both being sweet and sour.

The lag between trends in the west or those here in the east continues to be pronounced even in the instant age of all things connected and wired. Moving from the world of developed to developing can often be as plain as the difference between night and day.

Over the past decade, Phuket has somehow by accident or sheer numbers become an innovator in the region for resort-grade property. Back of this, and it’s hard to exactly track the origins, but somehow the 50-50 split for rental revenue came into being and has continued through much of the property cycle on the island.

Elsewhere in the world, say Hawaii, condo hotel revenue between property owners and management or developers is split on the bottom line after deducting expenses. Although practices in revenue sharing vary from place to place, and time to time, this is the most widely used method.

Perhaps it’s the local lack of trust of operators and how they might inflate expenses or the lack of a better business model, but the prevailing Phuket practice runs counter to how a large portion – though granted not “all” – of the world operates.

With many contracts in Phuket, however, often the “50″is not “50″ at all, but subject to deductions such as agent commissions, credit card commissions and reserves for replacements or repairs – and suddenly the “50″ becomes much, much lower.

At the other end of the spectrum are overanxious developers using ramped-up promises to sell more units or new developers who simply do not have the experience to look at the long-term implications of sustaining hospitality-led residential projects.

Hotels remain capital-intensive operations and mixed-use villas or condos are no different. Cash calls are frequent and only increase over the lifespan of a property

Phang Nga’s Beach Front Land Surge Stunned By New Zoning Act

One of Greater Phuket’s most dynamic property markets of the past eight years has suffered a setback with the introduction of a new Ministerial Regulation which came into effect July 3.

Thailand’s Ministry of the Interior has taken steps to cool off skyrocketing land prices and development of luxury villas and hotels in an area often referred to as ‘over the bridge.’ In this case the new Act is directed at the west coast area of southern Phang Nga province from Kok Kloy, Natai, Tah Sai, Bo Dan and Thai Muang.

With its close 15-20 minute driving distance from Phuket International Airport on wide roads and an expanding four lane Sarasin Bridge the prime area has been driven by property buyers who want absolute ocean front land, which is for the most part unavailable in Phuket.

Some of the area’s most expensive luxury villas are located in the Natai strip including Jivana, Sava, California WOW fitness entrepreneur Eric Levine’s mega residence. Boutique upscale resort Aleenta was an early arrival and high profile ongoing developments such as Similan Beach, A Ritz-Carlton Retreat and Richard Li’s 1000 rai destination mixed use resort in Thai Muang have added glitter to the offering.

Under the new regulations a reduction in plot ratio’s, restrictions on subdivisions and designations of large forest preservation areas and protected agricultural parcels looks set to impact large scale land speculation.

The Act has an effective period of 5 years and there remains speculation over whether Phuket itself could see new similar guidelines. In the short term in all likelihood the area will continue to attract million dollar villas and become more of a bedroom community for Phuket but certainly a critical mass of hotels and larger residential estates who are keen to enter the market will face challenges. Some sites such as Thai Muang who have substantial green areas will be able to cope with plot ratio issues more then small sized parcels.

Area’s north of Thai Muang including Tap Lamu, Khao Lak, and Takuapa are not covered in the guidelines and may seen new land transactions as speculators move to other areas which have west coast ocean front land.