TO DISCUSS YOUR PROJECT OR LEARN MORE ABOUT OUR SERVICES:

  • This field is for validation purposes and should be left unchanged.

Practice of Fractional Ownership Goes to Sea

Category: , Posted:20 Nov 2009 | 10:53 am

The Nation.
While the broader resort-grade property market continues to reel in the wake of the prolonged global recession and resulting reductions in consumer spending, some niche segments are proving irresistible to purchasers.
A recent alternative form of investment has been fractional yacht ownership. Greater Phuket has seen a steady rise in the number of private marinas over the past decade, starting with the Boat Lagoon and Yacht Haven and followed by the Royal Phuket Marina and the Ao Po, Grand Marina. A super-yacht facility is now under construction at Jumeirah Private Island.
Fractional ownership offerings were launched in 2007 by the Royal Phuket Marina Cruising Club. Then the island's top boutique hotel, the Twin Palms jumped into the market with the debut of Phuket Premier Yachting last year, and most recently the Tawan Cruising Club was launched about the middle of this year.
Typically, the offerings take a single vessel and divide the ownership into 10 shares. Each share represents 28 days' use. There are booking procedures to control time allotment and restrictions on use. Overhead expenses are an add-on and include the costs of crew and administration, insurance, maintenance and food and beverage consumed during time spend aboard.
The companies engaged in this business often find synergies with their core activities, which include operating hotels, property-property developments or marinas. The operators say the buyers of fractional ownership shares are all foreigners, with British, French and Scandinavians in the top three and more than half of the buyers live or work in Asia.
In many cases yachts are available for rent when share-owners do not wish to use their time allotments. The operators also provide private charters to outside parties at an average price of Bt 150,000 to Bt 200,000 a day. Owners are then able to offset this revenue against their annual maintenance costs.
At the expiry of a five-year fractional ownership term – which is considered to be the useful life of the vessel – a decision is made on whether to refit the craft or sell it. In the case of sale, any residual value is shared among the owners. This is often touted as a financial gain. However, because of the relatively brief history of these schemes, residual, values remain untested.
Despite the financial crisis, most high-net-worth individuals continue to give high priority to leisure and travel. While many of them are now looking at large purchases, others are tending to buy only those products they intend to use. This makes the fractional-ownership proposition both attractive and timely.
Greater Phuket, with its access to Phang Nga Bay and its islands, as well as destinations like Krabi, Koh Phi Phi and Koh Lanta, will see continued growth of yacht fractional ownership in the coming years. With the recent announcement of a new Sarasin Bridge connecting the island to Phang Nga, there is promise that yachts will be heading straight out into the Andaman Sea to such exotic locations as the Similan Islands and the Burma Banks. At the moment, fractions look to be going out to sea in increasing numbers.

Other News

Read more

AWC Set to Snap Up Westin Siray Bay Resort Phuket

Category: Hotels, Posted:11 Nov 2022 | 08:06 am Thailand’s growing hospitality conglomerate AWC (Asset World Corporation) has made public plans to acquire the 257-key Westin Siray Bay Resort and Spa Phuket. It is also acquiring the Grand Mercure Windsor Bangkok which has 459-rooms The AWC Phuket portfolio already includes the Phuket Marriott Resort and Spa Nai Yang Beach and Courtyard by Marriott Phuket […]
Read more

Banyan Tree Phuket Launching New Oceanview Branded Residences

Category: Real estate, Posted:10 Nov 2022 | 12:20 pm Phuket’s Banyan Tree is rolling out two new products under their Grand Residences estate. Ten premium oceanview villas are priced in the THB100-150 million range and 40 seaview condominiums with median pricing of THB85 million. Located within the Laguna Phuket integrated destination resort, the group is expected to bring more real estate products to the […]
Read more

Mind the Gap – Keep People Inspired Event in November

Category: Hotels|Tourism, Posted:22 Oct 2022 | 08:50 am Keep People Inspired (KPI) is the second in a series of Mind the Gap Learning events. The focus of the event is on inclusiveness in hospitality, spanning Phuket’s hotels, tourism and service industries. Inclusiveness is a key element of businesses that rely heavily on human resources and is in effect all about people, whether they […]
SiaJai logo

Thailand's Leading Homecare Marketplace