I am pleased to update you all with positive news following our visit to the UK last week launching Culu Culu with a VIP box at the Cowdray Park Veuve Clicquot Cup semi-finals with David Vaughan who heads International at Savills London.
James Packers ELLERSTINA put up a brave fight and played some superb polo but was soundly beaten by the previous weeks Queens Cup winners Loro Piano who subsequently lost to Lechaca Caracas in the thrilling final on Sunday with a tight score of 11 – 10.
There were probably 6,000 people there on Thursday and 10,000 Sunday with a superb corporate turnout and smart VIP tents by Veuve, Cowdray Park and other sponsors. A rain shower in the first semi, a nail biter to the end with spectacular pro polo failed to deter the watching crowd who became truly involved by mid afternoon after a delicious feast and lots of Veuve Clicquot.
Savills set-up the Culu Culu tent next to the VIP area energetically spreading the word about Culu Culu to the professional polo players, team managers and VIP guests. This is undoubtedly the first of its kind in Latin America and the others we have seen (Barbados, Miami and Californian all more residential focused with Polo fields all to one side as opposed to an integrated equestrian and polo estate such as Culu Culu) and judging by the strong response without launching yet to the US or Brazilian market it is unique in its broad appeal, wide open spaces and focus on luxury lifestyle.
The team met up in London where Al Alletzhauser hosted a dinner at Annabel’s last Tuesday and with Tom Travers of Indigo Phuket spent the day running through development strategies, architectural designs and equestrian master planning issues.
The final Culu Culu plan was launched in London and has received an overwhelming response with centerfield making sales this month at USD66/sqm or the equivalent of around USD400, 000 for 1.5 acres which is still substantially below the recently launched polo and tennis estate in Pilar, North of Buenos Aires and a long drive from the airport which are trading at around USD140/sqm.
The King Ooni polo field is now on the market with 6 quick sales this last fortnight and is currently offered at USD60 sqm (10% below the last few plots on centerfield) and has a lovely aspect.
With the Mali Mali Villa designs completed within a month and work starting in August the initial 4 polo fields including centerfield and Mali Mali will all be playable by mid 2008.
The hotel search and negotiations are well underway with solid responses from some of the world’s finest operators. One particular 5 star operator is being pursued and some announcements on operator will be made before November with Mali Mali pre-sales likely in October ahead of the announcement.
Be quick if you are considering a purchase, particularly on centerfield and with villa designs nearly completed purchasers may then move onto the build process that will be explained in greater detail in my next update.
KEY APPOINTED DISTRIBUTORS
Savills are handling UK marketing and distribution
Pam Golding are promoting Culu Culu to the South African market
Sothebys have joined to market into the USA and also in Argentina
Southfields, a Florida based equestrian focused real estate company
In Brasil where Argentine interest is high three large agencies are just starting
Indigo are handling Asian distribution
UPCOMING EVENTS
In August of 2007, an exciting polo event sponsored by Culu Culu will take place in Bariloche, a magnificent small winery town near the mountains in Argentinas West .
It is the inaugural Women's Snow Polo Invitational and is being co-ordinated by Veronica Posse the Buenos Aires based Culu Culu VIP representative. Featuring female polo players from all over the world ( Kenya, Hawaii, Chile, Jamaica, South Africa, Galapagos, Spain, Colombia, France, Holland, Texas, Asia and of course Argentina) all competing against each other in the snow.
If you have time to see this worlds first with some of the worlds hottest female polo players mark the date Saturday the 25th of august and encourage the Culu Culu team!! Make sure to let us know and Veronica and the team will ensure you get VIP tickets.
NOVEMBER 17 2007: The Argentine Open
Polos biggest day and according to AMEX, one of the TOP 20 things to do on the planet!
On our website we have video highlights on the match and below a summary of last years very exciting game. Culu Culu will be a sponsor and has a VIP box, make sure to let us know early if you can make it, and how many tickets you need as is a huge event. We also will be hosting dinners with players and a tour of private polo estates.
A foreign perspective on recent policy changes in Thailand
If Thailand could be defined in one word, it would be “Balance”. I have always believed that one of Thailand’s greatest strengths is its people’s ability to preserve their culture whilst embracing new ideas in a uniquely Thai way. The country’s interaction with foreigners is an important example of this. No other country in the Mekong region managed to stay independent of France or Britain in the 19th Century, or free of the socialist tide in the 20th Century, both results of clever Thai diplomacy and the forging of balanced sustainable alliances. Balance is the key to everything, and the Thais know this well. Yielding to extremes, whether political, ideological or business, set all the Mekong countries back decades; it is no accident that Thailand is now the richest country in this region. Over in Malaysia, whilst unpopular with some, it is the enforced balance between the ethnic Chinese and indigenous Malays that has kept the peace and allowed Malaysia to avoid the damaging pogroms that have scourged its more populous neighbour, Indonesia.
Applied to foreign investment and foreign influence, the concept of balance has led to Thailand becoming the favoured manufacturing choice for Japanese and Taiwanese industrialists in South East Asia, as well as the most popular retirement and long-stay tourist destination in all of Asia. Inevitably, in a country of strong culture and history, the pendulum swings back and forth over the years, but without the radical crackdowns and nationalizations you see in many countries where the door is opened too wide. Some emerging markets are currently cheering in the foreigners, but it will be different when foreigners wish to take their money out or when the local backlash begins. I remember clearly the unease with which foreigners viewed the election of former Prime Minister Thaksin Shinawatra. Somehow they were convinced that he was anti-foreign, but ironically he was ultimately removed from office partly for “selling Thailand to Singapore”. Perhaps it is inevitable that there is a time-out for re-evaluation each time Thai political winds shift, but this also highlights the fragile balancing act between foreign domination versus foreign cooperation and technology transfer.
The military coup of September 19th triggered just such a negative mood. Then the subsequent policy shifts by the interim government exacerbated foreign loss of confidence, at exactly the time when it needed to be reinforced. Firstly the capital controls of December 19th, themselves a misguided response to the strong baht (actually a nice problem to have) Then came the revision and declaration of pending enforcement of the 1998 Foreign Business Act (FBA), the timing of which was also sensitive given the inevitable post-coup slowdown in Foreign Direct Investment (FDI). Thirdly, there was the tightening of tourist visa on arrival requirements, a policy actually initiated under the Thaksin-led “caretaker government” but implemented in October. Combined together these three unrelated policies have created a heightened sense of discomfort amongst foreign stakeholders both within and outside Thailand.
It is important to remember that “foreigners” are not a homogeneous group. Loosely defined there at least four varieties of foreign participants here, each with different perspectives, concerns, and priorities. Firstly, foreign business people generating FDI, the backbone and meat of the Thai manufacturing base. After each coup in the past, there has been an automatic “wait and see” effect on FDI, until the subsequent elected government’s policies can be ascertained. The proposed revisions and stricter enforcement of the FBA has little effect on the larger of these industrialists as they tend to be protected by Board of Investment (BOI) privileges, but still adds a greater note of caution, and may directly affect small and medium sized enterprises (SMEs).
The second group comprises foreign institutional investors. Frustratingly fickle as they are, it is sometimes tempting to say “Who needs them” ? But the reality is that they supply much of the portfolio capital required by listed Thai companies, and it is doubtful that many of these companies would have survived the Asian crisis without injections of capital from foreign institutions. Now that Thai companies are in better shape, it would be churlish not to recognize the past and present contributions that made recovery possible. Additionally, foreign investors have many other choices of countries which welcome their money. The biggest fear amongst global institutional investors is actually not political risk, but rather policy risk. Imagine their horror when they woke up one morning to find that Thailand (already the least popular stockmarket in Asia as evidenced by the lowest valuations), had suddenly decided to forcibly take a 30% interest free loan out of fresh foreign investment remittances ! Fortunately, the architects of the debacle quickly reversed it, but left mainstream institutions with significant losses and scratching their heads wondering “what next ?” Some of the more nimble foreign investors like hedge funds are already returning, but the mainstream, long term investors such as pension fund managers will most likely wait until we are a few months into the newly elected government term before even considering putting money into Thailand again.
Foreign tourists, whether long-stay, or holiday makers, or healthcare visitors, form another important group. The holiday makers are only interested in relaxation, so their concern is purely security. The military coup and December 31st bombings jeopardized security perceptions sufficiently for Thailand to be put on a “watch list” by some countries for possible further deterioration. However, the wonderful experience which is Thailand seems to override this official caution for now, plus considerable goodwill remains from foreign Tsunami victims who remember the kindness and courage of the Thai people at that difficult time. Healthcare visitors similarly have to weigh the balance between security risks with the impressive and affordable services the country has to offer. Both these groups can likely be re-assured by some well-placed advertising.
Long-stay tourists and retirees, are also concerned with security, but most of them feel safe because they already understand the depth of Thai Buddhist culture, which will never allow the current political divisions to persist for long. Land ownership laws and visas are perhaps the key issues for this group. Wealthy villa owners can join “Thailand Elite” and get a five year visa (but not the right to buy up to 5 rai of land as was originally promised); and retirees over the age of 50 can apply for retirement visas. However, other visitors face a new maximum of three renewals to their one month tourist visas, and can spend only three out of every six months in Thailand. No doubt the real targets of this policy were the illegal migrant workers from Myanmar and Cambodia, not Western tourists who we should presumably encourage to stay longer. So why not vary the visa time limits appropriately for low and high risk countries of origin ? For instance Hong Kong grants a six month visa on arrival to some nationalities, whilst others get only 14 days !
With regards to property ownership, people seeking to buy holiday homes are faced with a choice of buying freehold condominiums (up to 49% of the floor area in each building), or leasehold villas, or freehold villas in minority partnership with credible Thai nationals. There are many ways the relative attraction of Thai property could be improved without changing the principle that only Thais can own land. Firstly, condominium ownership could be liberalized to allow up to 100% of the units of any building to be foreign owned, provided the land-owning management company is majority Thai owned. Alternatively, certain zones within Thailand could be designated as “non-sensitive” areas, and made eligible for foreign ownership.. Another option would be to increase the registrable maximum lease terms on land from 30 to 50, 100, or even 1000 years. Similar reforms could be applied to landed property ownership for houses and resort villas, with designated foreign freehold zones or longer lease terms allowed. Another possibility would be to have a foreign quota for freehold housing, as in Guernsey, with certificates of entitlement traded between foreigners. Clearly something has to be done to revise Thailand’s ownership laws, if the country wishes to continue to compete for the world’s affluent buyers with other leading holiday home markets like Spain, Dubai, Singapore, and Malaysia.
The final, and arguably most influential, group of foreigners here are the service industry professionals, such as diplomats, bankers, lawyers, real estate agents, hoteliers, journalists, import/export traders, stockbrokers, and so on. This group is concerned with all the aforementioned factors, and advises and influences all the other groups of foreigners, through Chambers of Commerce and social networks. Currently, their biggest worry is the FBA enforcement program, which demands disclosure of their true shareholding structures. In fact, the interim Government has offered a potential “amnesty” for these service companies if they come clean on their true beneficial interests. More significantly, according to the interim Commerce Minister, the current government has a policy of “grandfathering” approvals for these companies to maintain shareholdings in excess of 49%,. If this proves to be true in practice, there will de facto have been a major liberalization. It remains to be seen how many firms will come clean on their true shareholding structure and throw themselves at the mercy of the promised amnesty. Probably further discussions between the Chambers and the Commerce Ministry will help clarify matters. Although currently the Chambers are taking the extraordinary position that Thailand has no right to enforce its existing laws ! Unfortunately this attitude may only empower medium-level civil servants to dig in their heels.
The Foreign Chambers should just accept for now that foreign businesses have been caught in the crossfire of Thai politics, in particular the scrutiny surrounding the sale of Shin Corporation to Temasek. The enforcement and revision of the FBA is in fact being left to the next government, by allowing 12-24 months for the foreign-linked companies to restructure, and in all probability the next government will make additional revisions itself. In the long run the better solution is to openly liberalize “List 3” companies - if not all companies - to allow majority foreign ownership. The reality is that many foreign investors will still seek Thai partners for operational benefit, and which party ultimately holds the majority will depend on their respective expertise and capital contribution. Additionally, all Thailand- registered companies are still subject to local regulations and laws, such as taxation, labour laws, industry regulation, and the like, so even if the foreigners hold the majority of shares, the company will still in essence be Thai.
For me, a recent experience sums up why foreigners such as myself still want to live and work here. Last month I was at the new airport, picking up my father for a long-overdue visit, having myself just flown in from Phuket. In the rush to get my father’s bags into my mini-van, my driver and I managed to leave my computer bag on the trolley. Of course I didn’t notice until reaching home that the bag that mattered most was missing (complete with cameras, documents and other items). About to call my secretary to send out search parties, my mobile rang showing an unrecognized mobile number calling. I was surprised to find it was the lost luggage department at Suvarnabhumi Airport, and a polite English-speaking chap said they had found my bag and checked inside for my name card. My father couldn’t believe it. Where else in the world would the bag not have vanished within 60 seconds, or at least been plundered for its valuables before being blown up as a potential bomb - in the case of New York. In London you feel lucky to even see checked-in bags again ! Anyway, I quickly dispatched my driver complete with a large tip for the honest lost luggage team. For me this experience exemplifies the unfailing kindness of the Thai people. Whatever anyone says and whatever temporary mis-steps may be taken, this is still Thailand, and it seems we are still Welcome !
Written by : Jeremy King, CEO of Seamico Knight Fund Management Securities Co., Ltd. Source : Law Magazine : Issue no.1 ; Jun- Sep 2007
For many second homeowners, their love affair with Asia begins with a stay in one of the region’s famously elegant resorts, like the Amandari in Bali or the Banyan Tree Hotel in Phuket. Resort hotels often nab prime real estate first, and international homeowners follow. Many resorts make it even easier by building, selling and managing their own villas adjacent to the resort.
The economics work to your advantage. Longtime visitors to Asia, who remember when a beach hotel was a few dollars a night and now have a family in tow, pay a small fortune for a two-week stay at a luxury resort. Many have opted to put that money into a villa of their own, where they can create their own environment and rent their new vacation home out in their absence.
New and up and coming areas in Asia include China Beach in Vietnam and Galle in Sri Lanka, but political unrest and a lack of infrastructure have made these destinations appealing only to the most adventurous travelers. Most second home owners prefer the convenience of more established vacation spots. The bloodless coup in Thailand last September seems to have had no effect on tourism or prices there. The market for luxury villas and land is concentrated around Phuket, where luxury beach houses sell for between $1 million and $25 million.
Bali
“The reason I have a house in Bali is a blend of many layers of stories and coincidences, and I still can’t tell you really how it all happened. Nothing was decided coldly or logically,” says writer Idanna Pucci.”New York has been my base, and still is my irregular home, but Bali is a state of mind, not just a physical location.” The Epit of Life: The Balinese Journey of the Soul spends at least three months on the Indonesian island each year. Her house has a postcard view of the volcanic peak of Mount Agung and sits in the middle of peaceful rural rice fields.
“We are seeing more people from around the globe choosing to establish a second home here,” says Ian Macaulay of Elite Havens Realty on Bali.”It seems to be one of the effects of the world getting smaller. People have discovered Asia through work or travel. They like living international lives. They share a propensity for new things and a love of difference. We see many people who live big lives in the city come to appreciate the global village atmosphere of Bali. With its emphasis on traditional life that doesn’t move too quickly, it’s a place that offers continuity and a place in the community for people whose lives are lived on a much larger scale.
Macaulay sold a half-acre of land overlooking the ocean in a new development called the Pantai Selatan Estate for over $1 million. Other recent scales include the Villa Jaja-Liluna and the Istana, a five bedroom villa with two swimming pools.
The most popular areas in Bali are Semiyak, with its restaurants, shopping, nightlife and proximity to the beach and the airport. By contrast, nearby Jimbaran has a quiet village atmosphere, a clean, white-sand bay and is where some of the best hotels, including the Four Seasons Jimbaran Bay and the Ritz-Carlton .
Gangga, next to Seminyak, is an up-and-coming area of great natural beauty surrounded by rice fields. Further around the coast, the Sanur beachfront was one of the first developed areas and has the reputation of being the Beverly Hills of Bali, Here , older hotels like the Tandjung Sari overlook a peaceful beachfront, protected by a distant coral reef.
Finally, there is Ubud, one of the most magical places on the planet, a tourist town by day and a quiet village at night, surrounded by rice paddies and relaxing Indonesian culture, a place where you might run into a movie star, a dancer or ecologist sitting next to you at dinner at your neighbor’s villa.
Thailand
Thailand is not as developed, and is therefore not as expensive, as its neighbors Singapore and Malaysia, yet it is more open to visitors than its other neighbors Laos, Myanmar and Cambodia. The choices for luxury real estate are many and varied. Do you choose Bangkok, the hub of Thai city life with international restaurants, hotels and hotpots? Or pick a quieter lifestyle on the world-class beaches of Phuket?
Located approximately an hour’s flight from Bangkok and short journey from Singapore, Taiwan and Hong Kong, Phuket Island is serviced by an international airport with direct flights to and from major cities in Asia, Europe and Australia. The beach resort has over 600 vacation houses newly built or under construction valued at over $1 million, and is in the middle of a property boom. Over four million people from all over the world flock annually to its tropical waters, to enjoy the gentle hospitality of the Thai people and to snap up waterfront property.
Kamala Headland is often referred to as ‘millionaire’s row”, as it was one the exclusive playground for Thailand’s elite and is still the setting for Phuket’s most luxurious hotels, The Amanpuri Resort, the Chedi and the Twin Palms Resort. It is here that developer Allan Zeman commissioned Hong Kong architect Branko Pahor to build him a 40,000 square foot house.”Working in Thailand is truly a pleasure, mainly due to the culture of the people” says Pahor.”Most Thais have a can-do attitude. Building materials that are locally available are of an international standard and the local craftsmanship is second to none.”
“Another advantage of working in Thailand is the relatively low cost of labor.” Continues Pahor, “ There is nothing better than seeing 300 laborers on your construction site working to realize the finished product. Every country poses advantages and disadvantages for construction, but Thailand’s construction industry offers more pros than cons” he adds “and regulations are a lot more relaxed than in most Western countries”
“Over the last four years the second home market has suddenly expanded,” says Nick Anthony of Indigo Real Estate in Phuket, “And in the last year, most of our American buyers are from San Francisco, Los Angeles and Miami” Anthony is in the process of selling Villa Natai, American Fitness center guru Eric Levine’s 60,000 square foot property in Phuket with a private golf course and bowling alley plus a 3,500 square foot home fitness center, for close to the asking price of $25 million. Levine believes that Phuket will be the St. Tropez of Asia.”I purchased the land three years ago, and the beach was empty. Today, multimillion-dollar houses are everywhere, with the Who’s Who of Asia and Europe snatching up property.” He says, “Thailand recently repealed its taxed on yachts, and many marinas for mega yachts are opening up.”
Cape Yamu, a bespoke headland complex by architect Jean –Michel Gathy, known for his work on the Aman Resorts, with interiors by Philippe Starck, will be anchored by a luxury hotel. It will offer private villas for sale in tropical parkland overlooking the Andaman Sea on the east coast of Phuket. At press time, only three unbuilt lots remained.
Like many countries, Asia’s property market has its own rules and regulations. Before investing in any real estate, it is vital to research any property for sale and to consult a lawyer who comes highly recommended for transactions. For international homeowners, it may be the best lifestyle investment they have ever made.
This is part of a talk given by Tom Travers, Managing Partner of Indigo Real Estate Ltd, during an International Business Association of Phuket or IBAP meeting at Phuja Nirvana, Central Festival, last Friday evening, reviewing the newest luxury villas & hotels in Phuket & Phang Nga areas, with many opportunities for business & employment, as he estimated over a billion US Dollars or about 40 billion baht of investment capital is coming in next 3 years. First he showed some examples of the high end villas already sold out.
Phuket's allure as a luxury resort continues to grow,with hotel announcements coming from some of the world's most prestigious brands. Banyan Tree Phuket, for instance,is now offering villas for sale as part of its new residential brand.
Why high-end resort property in Asia remains a strong buy
In the late 1980s a new residential club was formed; offering spectacular US$2 million oceanfront villas, the best service Asia had ever seen, iconic traditional wooden architecture, soaring ceilings, 25metre pools and a serious international ownership cache – the estate offered a handful of villas for sale which through persistence and word of mouth sold out.
This estate, The Amanpuri, was not only a watershed development of luxury Asian Resort property but importantly set the stage and the strategy for a wave of privately owned, super luxurious, ultra exclusive, service orientated resort villas that today have a value of well over $2 billion in Thailand and Bali alone. Importantly, 40% of this entire value is or will be released for pre-sales in 2007 alone.
Still under supply?
Phuket was a sleepy island escape four years ago at about the same time that Indigo Real Estate was formed. A few small well-built developments started to gain momentum, and through smart developers, informed clients and a luxury focus it has developed over a remarkably rapid period to become one of the worlds hottest destinations for both new 5-star resorts and also for luxury villas, both resort and independently managed.
With 800+ private jet landings in 2006 and recent hotel announcements from India’s Taj Hotels, Dubai based Jumeirah, Raffles, Shangri La, Four Seasons, The Conrad, Alila Hotels, The Hyatt, Renaissance and the Chedi managers GHM, the island is on a development spree never imagined. Learning from the experience of the Aman and recent successes in the Caribbean nearly all luxury resort operators today combine a residential-resort component to their estate that helps finance their hotel strategies. This is a huge bonus for Asia’s smart brand name buyers – yielding architecturally superior properties, superb bespoke management, a generous yield that covers expenses and generally very limited availability. Over time these early buyers will be well rewarded.
To date sales have been brisk with operators often selling up to 30% on the project launch and are nearly all sold out by completion of the show villa, as buyers quickly make decisions based on the brands cache, the International experience, customer loyalty and in the case of the to be launched Taj Phuket as example, absolute rarity: it is the first time that a Taj Villa can be privately owned – a villa like which is rarely found in the world today.
Asia on the doorstep
With 150 Billionaires in Asia and a massive chunk of the world’s population within a five hour flight of Phuket it’s not hard to see where the local demand is coming from, plus with global access getting easier, direct flights into Phuket from Europe, massive real estate booms globally providing fuel and tropical living providing fire this potent combination is driving the demand. Add capital city pollution, an ability to freelance and be an entrepreneur anywhere, earlier retirees and an expat exodus from Hong Kong to family places that offer international level education, quality healthcare and good “life infrastructure” (restaurants, spas, shopping and like minded people) and you realize that the trend and buying will be long term and is naturally creating a superb permanent option, an option that is bettered by very places globally.
Finding your Shangri-La is not easy, and buyers are often conflicted (work/family) from making a pure lifestyle choice, however with the quality of exceptional branded resort living now available it’s now possible to have the best of both worlds in Asia.
Asian resort property remains a strong buy, with all key Phuket areas fully built out and sold out by 2010. Bali is a good alternative and is seeing also superb resort properties, Vietnam is learning fast with the GHM managed Nam Hai now open, Malaysia attracts retirees and is coming at it smartly from a policy perspective whilst in the Philippines we hear machinations within the current administration calling for a complete overhaul and re-vitalization of its stagnant tourism industry with an expected knock-on effect to property buyers.
Expect relaxation in all Asian countries of property laws, attracting capital, skills and good people and expect to hear a lot more about luxury Asian resort property – we live in exciting times.
Written by : Nick Anthony, Managing Director of Indigo Real Estate Source : Thailand Property Report, June 2007 ,Issue no. 33
