Over the last few years there has been a growth in the number of branded properties on the market with many top hotel groups beginning to sell property within their resorts. There is no doubt that buying branded property gives increased confidence to the investor, something that is especially important in these uncertain economic times. We take a look at branded resorts in Phuket, Thailand and what owners can expect from their investment.

Established brands such as The Banyan Tree and Dusit Hotels, both in Bang Tao have been selling properties on Phuket for a number of years and have enjoyed high levels of success particularly from investors looking for flexibility and high rental yields.

I asked, Rung-aroon Wichitwatee, PR & Sales Manager at Laguna Property, why The Banyan Tree and Dusit Villas had been so successful. ‘Our properties are located within Laguna Phuket, Asia’s finest destination resort. [We offer] owners an exclusive Residents’ card which entitles them to special discounts and privileges at all of the completed and fully functioning hotels within Laguna Phuket including Banyan Tree Phuket, Dusit Thani Laguna Phuket, Laguna Beach Resort, Sheraton Grande Laguna, Allamanda Laguna Phuket, and the Laguna Holiday Club Resort.

‘Residents get to move freely around the resort with our shuttle bus and boat services as well as enjoying wonderful rounds of golf with their complimentary golf club membership to the award winning Laguna Phuket 18-hole Golf Club. For our permanent residents with children, a school bus is provided by Laguna Phuket which goes directly to the British International School.

Laguna Property owners can immediately enjoy the facilities offered across Laguna Phuket which spans 1000 acres of tropical parkland along an eight kilometre stretch of pristine beach at Bang Tao Bay on Phuket’s west coast.’

The majority of their purchasers have previously stayed at the resorts and have opted to buy based on the quality of service they received, the facilities available at the resort and the promise of high returns. Investors who buy branded property also believe that the brand name provides added security which should mean that their property is consistently well managed and well marketed. This in turn should result in a higher return than in the case of non-branded property and a better re-sale value.

Customers tend to feel more comfortable booking their holidays at branded properties Rung-aroon Wichitwatee went on to say, ‘Customers tend to feel more comfortable booking their holidays at branded properties and with competitive rates in the current climate, it definitely gives the branded resorts a strong advantage. In difficult economic times, those companies which continue to thrive are those established companies such as Laguna Phuket which has been around for the last 20 years. The fact that the owning company, Laguna Resorts & Hotels PLC, is publicly listed in the Stock Exchange of Thailand and has internationally renowned management companies running the hotels gives potential property owners the confidence to invest.’

Many branded resorts now offer fixed rental returns, in the region of 6% to 10% for periods of between three and six years, however, owners may be restricted to between thirty and sixty days for their own usage and there could also ‘black-out’ periods at peak times such as Christmas and New Year.

For investors requiring more flexibility many resorts also offer the option of a rental pool, where all units within the resort share the income achieved, usually with a 60:40 split, this is more attractive to owners who require more flexibility in the times when they can stay at their property. Investors need to decide which option suits them best and also look carefully into the stipulations of the leaseback or rental agreements.

One development offering guaranteed returns of 6% is Outrigger Serenity Terraces which opened in April of this year. The luxury ocean front resort provides owners with the option of a rental guarantee or a pooled income and additional attractions such as the free usage of a speedboat and discounts on spa treatments during their stay at the resort.

This format of privately owned condominiums which are leased back appears to work well for Outrigger Resorts, who manage a number of resorts in this way. In addition to Outrigger Serenity Terraces the operator also manages Outrigger West Sands in Mai Khao on the north west coast of Phuket, due to open in 2011 and announced only a few weeks ago their appointment as manager for a new residential resort in Bang Tao operated under the Laguna Resorts umbrella.

Movenpick in Karon are another operator who has sold apartments along side their standard hotel units. Ocean view apartments at their resort start from 14,000,000 Baht (294,328 Euros) and owners have the option to enter into a pooled agreement.

New brands are emerging alongside the established in Phuket with Cape Sienna, Andara and Twin Palms (Baan Yamu, Cape Yamu) all developing resort apartments and villas.

Cape Sienna, located on ‘Millionaires Mile’ Kamala, opened in February this year and operates nine privately owned ocean front villas alongside 146 deluxe ocean view hotel rooms. I asked Frank Dreist, general manager, what he considered was the main reason people had invested in his resort, ‘Cape Sienna is foremost a Hotel operator, therefore all hotel facilities are fully available to the investor of the villa s. This inclusion provides the investor with easy access to all services and marketing benefits of a bigger operation.’

He went on to say ‘All special requests and demands can easily be catered to by a professional hotel team, from private parties in the villas to extensive holiday organization.’

At Cape Sienna there is a very flexible rental program, which is very much personalized and not based on any guarantees, but depending on how much time the investor would like to spend in his villa.

Branded property investment provides security in the brand name, high returns and good long term capital appreciation. The added bonus is that when you choose to use your apartment or villa you have full use of all five star facilities at no additional cost, room service, housekeeping, valet parking are all provided as standard, so while your investment is making you money you can relax and enjoy a well earned break.

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