Tropical Living Magazine Article - Penthouse Article by Bill Barnett

http://www.tropical-living.com/new/09-06jun/01.htm

MARKET WATCH

Life at the Top

STORY : Courtesy of Bill Barnett
PHOTOGRAPHY : Shot on location @ Andara Penthouse, Phuket
PENTHOUSE IMAGES : Courtesy of developers

Dizzying heights as you move higher into the ozone, the elevator doors open and there you are in the penultimate piece of property in any condominium or apartment complex. You have arrived at the penthouse. As land becomes more valuable in Phuket the trend towards higher density yet premium units is continuing into a new direction and these villas in the sky represent a new breed of product.

Discreet Luxury

     Our journey is set to take us across the expanse of the island of Phuket from east to west, north to south to see what’s hot at the top end of the property market. Speaking to a variety of developers one thing is certain, despite the existing global financial crisis and doom and gloom scenario at play, there is traction on prime properties with the desired elements such as outstanding ocean views, superior style and design and developers with a good reputation. Starting with what in the trade is called a great piece of dirt…but it’s the end result once built that provides unique selling points, appeal and what ultimately buyers want from a product above the norm.

     Driving down the vaunted Millionaires Mile in Kamala adjacent to Allan Zeman’s first Phuket villa project are the Andara Resort Residences with penthouse prices ranging from THB 34-84 million. With a total of 37 units of which 40% have already been sold configured into two, three and four bedrooms, there are 13 penthouse units and only three of these remaining on the market. Completion is expected by October of this year and the development will operate as a luxury boutique resort competing in the same airspace as Amanpuri and Trisara. Set to start taking guests in December rates for the spacious suites range from USD 900 up to USD 1,800 a night. The premium units have private pools, with facilities including a fine Asian dining restaurant and an eight room spa.

     Speaking to sales and marketing director Jonathan Gascoyne who commented “we offer dual benefits to buyers who look at a unique very private lifestyle investment that provides ongoing premium rental yield and above market capital appreciation. This is not a mass marketed condo hotel but an exclusive destination resort that captures traditional Thai design and reflects the location and aspects of the property.”

     Next it’s off to Tawan Views where top units command THB 36-40 million on Phuket’s emerging east coast. The past few years have seen significant upper scale villa developments with Cape Yamu, Jumeirah Private Island and Sri Panwa dispel any notion that the ‘other coast’ would not play second fiddle to anyone. With 24 units, there are six penthouse units and only two of these are available for sale. Phase one is set to complete in August of this year and the remainder of the project by December. Designed by leading Hong Kong firm K+K it’s all about the views. Additionally the concept of only one apartment per floor has provided private living space which continues to be in high demand.

     Heading up sales is Ian Spurdle who expressed what key generators were driving purchasers east as “boating, golf and the islands themselves. Our purchasers want discreet luxury but also year round access to activity which is something protected Phang Nga bay can offer. The opening of nearby Ao Po Grand Marina as a world class facility has driven demand considerably.”

     Travelling south gets us to Raimon Land’s The Heights which was recently fully completed. With stunning panoramic views over Kata and Kata Noi beaches there are four, three bedrooms penthouse units from THB 41 million ready to move into. Design has been a key selling point with architect consultant Hans Brouwer delivering a great set of ‘wow’ factors into the units that create a new meaning to tropical contemporary design.

     Talking to Steve Brajak who is in charge of Raimon Land’s Phuket operations who voiced “buyers are not only drawn to 
the development but also to Kata itself, a niche location that appeals to them, with a small beachfront community they 
can relate to.”

     The area also plays host to one of those great names for projects Kata Rocks. Developer Richard Pope recently announced that popular Discovery Channel personality and host of ‘Man vs. Wild’ Edward ‘The Bear’ Grylls has recently purchased a penthouse which he intends to use when escaping the wilds and wants a bit of up market luxury. Prices for this premium oceanfront development are already commanding THB 150,000 a sq m and attracting a real market buzz. 

Waiting for the elevator to bring us back to earth from our high flying adventure we can only wait to see what the next generation of penthouses are going to bring us here in Phuket. We can’t wait to see what happens.

Now is the time to buy a penthouse in Phuket because...

     “There is great value, given low returns on other investment grades such as savings and far more risker ones like equities or stocks, real property is a solid investment. Given the global economic crises it’s a competitive market hence negotiating power by buyers is strong and looking at whats currently in the market there are good products completed or near completion so development risk is minimal.”

The capital appreciation on a penthouse works by...

     “Capital appreciation is a function of the market and prime properties should increase in value at a rate faster then the general market. At the end of the day its up to supply and demand and the four properties in this article all sit on exceptional pieces of land, hence its extremely hard for new developments to copy this product and there are considerable barriers to entry, hence demand should increase.”

You should buy a penthouse instead 
of a villa because...

     “Depending on your preferences but long term a more urban type product will be the trend in Phuket, prime sea view land is hard to get, hence more dense projects will be developed and at the top of that is the penthouse which is the new villa of the future. Its far easier to maintain a unit such as this and in the end; most people looking for investment or holiday homes don’t need the huge grounds associated with villas. For many a resort like complex is to their liking for yield based rentals, with lower common area fees and manpower.”

The forecast for the Phuket penthouse market is...

     “...expected to out trade the wider property market, as these are premium units and there is money at the high end and transaction activity which is expected to continue. Supply demand is far more favourable in this segment for the short to medium term.”

If I could buy a penthouse it would be...

     “I’d have four, one in the north, the south the east and the west, phuket is a diverse island and each has a unique DNA ie, differentiators, nuances and attributes.” 

     Bill Barnett is the founder and managing director of C9 Hotelworks, a leading hospitality consulting firm specialising in the Asia Pacific region, based in Phuket, Thailand. With over 23 years of ‘on the ground’ experience within the region he is a noted analyst on hotels and property. He is a columnist with a leading newspaper and has appeared on CNN, CNBC and BBC. His popular blog,www.thephuketinsider.com is the authoritative source of all Phuket hotel and real estate issues and trends.