Property Watch: So near and yet so far
PHUKET: Asia’s resort property scene is not unlike any other industry, in that it’s always on the lookout for the next big thing. What do they say about the key to success – location location location. Is that one or three? Perhaps there is just an echo in the room or the snoring of an elephant next door.
Of course there remain other options than following the pack, you can always be a pioneer. In the old west, the perils of heading off alone into new territory often resulted in a barrage of deadly arrows aimed in your direction. Fatal? You bet. What real estate investors need to mimic is no different than following in the heels of the Microsoft/Bill Gates strategy and draft your way to prosperity in the wake of the more daring and often times less successful.
Whether you are in Phuket, Bali or elsewhere, tracking down the smart real estate market is no easy feat. One great example of speculation which backfired in the short term is the Natai area of southern Phang Nga, just over the bridge. In what was hailed to be the next Phuket, with high profile projects such as Richard Li’s redevelopment of the 1,000 rai Thai Muang golf course into a mixed use world-class destination resort. Nearby were planned hotels branded to global brands such as Ritz-Carlton and the term “the Hamptons of Asia” came into vogue.
All of this quickly changed when government planning legislation effectively killed the deal with onerous restrictions on commercial areas from Thai Muang to the very southern tip of Phang Nga. Developers hit the snooze switch and things turned very quiet.
Track down to Bali and southern Lombok which for more years than I can remember has been touted to be the next big thing with the mega-development Mandalika Resort Development. This was to have become the next Nusa Dua and is managed by BTDC which has successfully driven the former in south Bali to great success. Today, the progress is just starting to gain momentum but the whispers remain as to how long will it take to get into the ground.
But like the stories of the pioneers, we are now entering a stage where both Bali and Phuket have firmly moved into the category of urban resort destinations and there is a defined number of new projects going beyond the boundaries of the big two.
A good case in point is that many industry types are facing the introduction of new, more liberal development guidelines in southern Phang Nga, which are currently in draft form but could be implemented in the first half of 2014. We have already seen Thai listed developer Charn Issara announce a new project in the area, after their successful Sri Panwa estate has fared well in terms of both property and hospitality success.
Over in Phi Phi, the Beach project, which will be branded by Bugatti, is on the radar. While further afield Centara has recently done a large deal in Krabi at the Pelican development. With a bridge under construction in nearby Koh Lanta that spans at least one island, the island is seeing a new rise of activity as well.
Down south, the deep deep south of Bali over the equator a similar transformation is taking place – pushing out of the urbanizing posh southern area. There is an outer island vibe pushing property transactions higher and higher in Nusa Lembongan, the three main Gili’s and into Lombok itself.
One good example of the trend is the Latitude 8.1 Property Group with their hotel branded project just near Sengiggi. Noted green architect Charlie Hearn has designed well thought out modern pool villas with some excellent ideas on sustainability. As we have seen in Phuket, investment type buyers are the key movers in the resort grade space and in this case Latitude has enlisted the archipelago chain’s Royal Kamuela brand to spur sales.
I spoke to Dan Miller who heads up Jones Lang LaSalle in Bali and his comment is that the project has been selling with great success on the back of a trio of divers – it’s priced right from US$400,000 up, has a dynamic ocean view and a known hotel operator.
As for those who are looking to get off the beaten path, the best advice is to always take a forward looking view of the importance of infrastructure, you can only stay there if you can get there. While it’s great to be a pioneer, perhaps just a move out of arm’s reach is a great first step.
Bill Barnett is the Managing director of C9Hotelworks he can be contacted through C9hotelworks.com
— Bill Barnett
