Phuket needs superyacht marina to boom
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While Phuket already has five marinas, the development of one for superyachts will help the resort island to become Asia's yachting capital, says Ramesh K. Hamal, development director of Green Heritage Group.
The existing five marinas have a total of 800 yacht berths. The three largest are The Boat Lagoon with 170 wet berths and a hard stand for 120 yachts Royal Phuket Marina, developed by the Bombay-born British tycoon Gulu Lalvani with 300 berths for yachts of up to 30 metres and Yacht Haven Marina, which can accommodate up to 200 vessels.
Although the current level of development on the island is good, Mr Hamal observed that the capacity to berth superyachts would help Phuket leapfrog ahead and tap a very lucrative market.
Singapore has facilities to berth superyachts, but this is more for commercial purposes than recreation. Mr Hamal noted that a marina for these huge yachts need not be geared just for commerce because many wealthy people now own superyachts. Roman Abramovich, the Russian billionaire owner of Chelsea football club, owns five of them.
Such a facility might be necessary for Phuket's tourism industry to stay ahead because one of its regional rivals, the Malaysian island of Langkawi, which may develop facilities for mega-yachts.
The Green Heritage Group is trying to promote the construction of such a facility and has approached investors for such a venture. A superyacht marina would have to be on Phuket's east coast or on an island because the west coast is already well-populated, making it difficult to get the required oceanfront land.
It is also worth remembering that marinas benefit the island's real estate industry because residential projects generally crop up around them.
It seems that the luxury end of Phuket's property market has not been affected by the American sub-prime crisis but Mr Hamal cautioned that if the situation worsens it could feel an impact.
Right now the debt market is very difficult because the banks are putting a moratorium on debts so that will have some impact on the low- and mid-level markets. But I don't think the luxury market will be affected by this. I see that in general, Thailand and Phuket are undervalued compared to the rest of the region.
However Green Heritage's director mentioned that the concept of luxury has changed with well-heeled buyers no longer satisfied with a good location alone. Many demand a complete package of personalised, professionally managed services.
This has led branded properties to surge to the fore. Among them is Barama Bay Island resort, which is to be managed by the Dubai hospitality group Jumeirah The Yamu, which would be run by GHM and The Taj Group, which is said to be developing a six-star hotel and villas on Lone Island.
This is precisely the reason that developers are looking at bringing in professional companies to manage their projects. Serenity Terraces has linked up with Outrigger from Hawaii to take care of that end of the business.
Now at Katamanda, our company has set up the structure for the management of the entire common area ... but it's very hard when you don't have a brand, you don't have that network of offices around the world, said Mr Hamal.
While luxury property owners and buyers are not too concerned about rental returns, those in the middle to lower brackets often do seek income from their properties, which would most certainly covering the branded variety.
However, Mr Hamal observed that they are rarely familiar with the new buy-back and lease-back concept and have to be aware of the restrictions they might face. For example, even though own the property, they might not be able to use it during Christmas and New Year's.
It is a market that is growing because it has all the fundamentals but this requires some sophistication in structuring the brand protection.