Condo Hotels Hit Bangkok Property Market
Bangkok’s real estate scene is about to see a new wave of condo hotel developments that have already been seen across Southeast Asia’s resort markets over the past decade.
The Wyndham hospitality chain and brands are being used as a vehicle for Thai group Siamese Asset under a license and franchise offering, with white label management by UK group Kew Green Hotels under a joint venture.
A mixed-use concept is seeing properties having a hospitality component with investment-oriented units sold under a rental scheme. A hotel license will be used so daily rentals are the primary target. For pure residences, these have optional hotel services.
Bangkok’s hotel branded residences at the luxury level have seen prolific growth over recent years with such names as Four Seasons, Mandarin Oriental, Ritz-Carlton, St. Regis and Banyan Tree featured. Though it needs to be noted in these developments the hotel brands have been purely for residential use and not operated as hotel units.
Notable trends in this deal and key takeaways are:
Kew Green Hotels while being a UK Group is controlled by the Chinese travel conglomerate HK CTS Metropark Hotels, so there is a China play in both real estate and hotel bookings.
The condo hotel surge is rampant in certain Thai resort markets presently with Phuket as an example, with over 15,000 new keys in the pipeline, over 50% of these are condo hotel-type properties.
Condo hotels require hotel licenses, which while legal in Thailand have faced opposition or are subject to interpretation in key tourism markets like Pattaya and Koh Samui.
Siamese Asset is a real estate player primarily and most focused on short-term property sales revenue, so it will be interesting to see how they manage the long-term capital heavy environment of hotels.
Urban condo hotel growth in Asia is typically a cyclical phenom that attracts a highly speculative investment-oriented buyer profile and is an indication of the top of a real estate cycle.
The emergence of Kew Green Hotels as a white label operator is certainly going to see other groups follow, given a rise in global chains moving from management to franchising, and the needs for scalable management offering within this structure.