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A  recent topic of discussion in Thailand’s real estate circles has been about how possible defaults in the condo hotel or investment sector can have a negative impact on the industry.

Based on our own two decades of experience with C9 Hotelworks in branded residences in Thailand and throughout Asia Pacific, I thought it might be helpful to give some guidance to prospective property buyers on how to avoid defaults, or illegitimate investment-type schemes. Here goes:

Who is the Developer?

A logical starting point is who is the developer of the project? Get beyond the website and look at fundamental questions.  Have they completed other projects and are these successful? What is their track record?  Is the company a public listed entity, a developer with multiple projects under one umbrella, or a one-off private limited company?

In Thailand a key trigger that further due diligence is needed is if the development is fronted by foreigners, then is there a significant Thai shareholder in the project, or is it a nominee structure? This is not to say that there are not good foreign real estate developers in Thailand but in the case of project default, recourse will often be restricted to who is the significant Thai partner. If a nominee structure is used, what guarantee can buyers have that they have the financial resources to complete the project? One of the biggest red flags is ensuring the developer has the financial capacity to complete or else that bank financing is in place.  If not and they are looking to fund the project on sales cash flow, the risk factor for buyers is extremely high.

Guaranteed Returns, Too Good to Be True

For purchasers looking at condo hotels or investment-focused real estate, the development strategy of guaranteed returns is a sales turbocharger. Even experienced buyers who have worked out that projects are pricing in the returns as part of the sale price still often believe that they are mitigating risk by getting at least 30-40% of the total price under the guarantee? How wrong they end-up being.

First, buyers need to understand if the guarantee is backed by an escrow or trust account or simply a contractual obligation?  They also need to know that most guarantees have a lifespan of two to five years, though in some extreme cases we have seen projects offering ten-year terms. COVID-19 has also been an acid test for many buyers as ‘Force Majeure has come into effect nullifying the guarantee or in some cases, simply non-payment by the developers.

Few initial guarantees later translate to longer-term returns of a similar yield. So often once the guarantee expires, actual returns often crash to a fraction of the initial number, and reality bites. A red flag for guaranteed returns is when there is no clear backing of the return by a financial instrument and an extended-term is promised. If it’s too good to be true if probably is.  Buyers need to understand that when developers are using guarantees they are covering the amount by marking the property up or else are not prepared to back these returns up long term, in instances of negative cash flows.

Hotel License

Real estate in Thailand which is promising hotel-generated rental returns or rent to transient (daily) guests requires a hotel license. From our experience in the sector, we have seen so many different scenarios ranging from projects which vaguely promote hotel-type rentals and have no intention to obtain a hotel license, to those who often have no legal way to obtain one such as certain villa estates who do not meet legal requisites for a license.

Sadly, the Hotel Code in Thailand is often vague and the licensing of projects ends up with different interpretations depending on provinces and often municipalities. Condominiums as an example are allowed to obtain a hotel license assuming that 100% of the buyer’s consent to this and to issue a license requires a change of use of the project from residential to commercial, which can only be done on project completion.

In a nutshell, off-plan buyers are taking a risk if purchasing into a condominium hotel or branded residences if there is not a hotel license. In all fairness, developers cannot get licenses if still under construction.  The best protection for buyers is to ensure the contract has a warranty that a hotel license will be obtained in a certain timeframe and if not pre-termination of the sale be allowed and a full refund made.

Hotel Operator

For buyers into rental managed properties under hotel schemes, they need to closely look at who is the operator.  Is it the developer, has an international operator been appointed, or what is the plan? If there is a management company, buyers need access to the management agreement and this should be referenced in the sales and purchase agreement.

A key red flag is where the developer, who has no experience is set to operate the rental operation. There remains a risk for buyers in that most hotel management contracts have lifespans that will be shorter than the property itself so what happens after that? Also, if you are buying into a certain brand, and that company no longer is affiliated with the development, how returns and values may be downgraded.  You have to also be prepared that at some point in the long term, the development can no longer be operated as a hotel due to age and changes in the market so what happens then, contractually to property owners?

Check the Land Title/s

An essential part of any purchase is to have a clear understanding of what land titles exist for the project. In Thailand Chanote titles are preferred but in certain cases Nor Sor Som Kor is accepted. First, understand if the developer owns the land the project is located on. Second, has the land been mortgaged and a bank lien registered with the land department.

One absolute red flag for the project that has been a recurring issue is titles have liens on them by non-institutional lenders referred to “Kai Fak”. These liens are legal in Thailand but interest rates are at premiums compared to banks and buyers should consider if a developer had to go to private parties to obtain funding, can they complete a project of scale?

Lastly, where there are complex hotels and hotel residences, underlying land titles should be separately subdivided Hotels often will have mortgages or loans in place on a long-term basis and if the residences are on the same title, in case of a default, the bank will have first recourse over the property.  A right of way should be put in place so if a hotel goes into bankruptcy, residential buyers have legal access to their property.

Making Sense of Payments

Thailand’s real estate payment regime is fragmented and there are different market practices between freehold condominium type properties and leasehold. One of the most used payment schedules for resort properties is those linked to construction milestones – down payment, foundation, structure, or lock up as an example.

Buyers need to be closely monitoring construction updates and have physical checks to see if the billings match the work progress. The worst cases for buyers are when they have paid 100% of the unit in advance for a discount and carry the entire risk of non-completion or where no construction occurs or will ever start. A red flag here is developers who are promoting substantial cash discounts for full payment as they are likely financing from presales and may default. As for how buyers can best manage the payment cycle risk, keep down payments low, check on construction progress and ask for proof of build permits and construction contracts.

How to Read Developer Rental Projections

For non-hospitality professionals, understanding hotel projections can be confusing. In the first place, if you are buying into a condominium hotel or branded residence ask for rental return projections and supporting documents. This is an investment, and you need to expect more details documentation than just a ten-year forecast that shows returns going up, up, and away.

Where red flags start to come up are on projections that show high occupancy and rental rates from year one onward. New hotels take time to stabilize and compete, they typically have a two to four-year trend to stabilize.

If a developer is comparing returns in the early years to the overall market this is flawed and returns will suffer. Another is when they compare rates to those offered on Agoda or online. For hotels, achieved rental rates are many times 30-40% below those online so again another reality check.

The best way to evaluate returns is to consult a hospitality professional or at least talk to someone you know in the hotel industry to vet the projection. But at the end of the day look at the fine print and understand the projections will unlikely be backed by a contractual warranty so there is no recourse when returns fall short. The second is to make sure the legal sales documentation has a clear management contract between owners and the developer which is comprehensive.

Freehold vs. Leasehold

For anyone looking at buying Thai property, it’s important to understand the difference between freehold and leasehold. If not clear, get advise on due diligence.  For condo hotels or condominiums, this falls under a different legal code – the Condominium Act. For the buyer, this is a more structured approach to the owner’s rights once the project is completed and registered. But on the other side of the scale, hotel operations need to occupancy titled areas under the developer/owner and there is still a requirement for a juristic person (building/owners management). One of the inherent risks for buyers in a hotel scheme and also for management groups is that long-term tenure is not guaranteed and once the owner’s body is formed, a majority of buyers can vote out the operator. Banks interestingly prefer lending to freehold property given the ability to hold land titles.

The other type of ownership is leasehold which may be an apartment or villa. These types of properties are under the Land Development Act, which is more developer-friendly. While long-term hotel management may be secured by owners easier, there is often less immediate legal recourse for developers who default. Owner’s recourse and rights as formal bodies depend on the initial bylaws and article of association, unlike condominiums where there are statutory bodies and processes.

One significant red flag is understanding if the project is leasehold, who is the landowner and how can buyers institutionalize this. In so many cases when individuals are used as landowners,  in instances of death, family disputes, and financial problems, underlying land in leasehold projects has been mortgaged or “Kai Fak”.  This individual approach puts unit owners at risk. The best way to prevent this is a trust or institutionalize the land-owning entity.


Most buyers at some point want to at least understand can they resell a property? For condo hotels or those operating as hospitality-managed residences, they may find the secondary market limited. If returns are poor, prospective buyers may look closely at historical yields. Another aspect is, that some end-users or owner-occupiers don’t want a hotel operation in their condo building or estate as it’s often noisy and transient.

Common area changes are typically higher so this often puts off the resale market. The bottom line will be while brands might elevate this type of real estate, it also has limitations on re-sales and if things go very wrong on rental returns, it could make an asset virtually unsaleable.

Legal Documentation

Our first advice for buyers is to hire a lawyer. But take more steps and go beyond that.  Do your research on who you hire, make sure they have experience in hotel residences and condo hotels. Draft a brief and check the boxes.  Don’t expect to as little as possible on hiring a professional.

But beyond that, remember aside from the contacts and legal due diligence you need to do your checks on the items above. Make an informed decision, obsess over details, and question everything, as it’s your money on the line.

So there you have it, these are the Top 10 Best Ways To Avoid Condo Hotel Property Investment Pitfalls, but by no means is it exhaustive. The condo hotel and branded residences sector is a global industry and like any, you have the good, the bad, and the ugly. There are many examples of long-term success for buyers but sadly there are cases where rip-offs have occurred and default with buyers losing their investments.



Dreams die hard, even in a pandemic. But for thousands of Phuket property buyers who invested in the promise of a tropical dream with endless sunsets, the stone-cold reality of failure is just starting to hit home. Amidst a backdrop of rusting steel, decaying concrete, and empty construction sites lays the dark side of the island’s real estate trade.

To better understand the sheer size of the market, based on C9 Hotelworks latest research report shows there are currently 22 projects offering hotel-managed properties in Phuket with 6,529 units. As to how significant this is to the larger incoming pipeline of hotels, 55% of all new hotel developments have real estate components.

Digging deeper beyond the hotel-managed or branded condos and villas segment is an equally large number of pure residential developments that promote the promise of guaranteed returns or rental income. Taking these into account the market size swells to over 10,000 units.

Once we started visiting these projects, the fieldwork concluded that over 60% are currently on hold. The state of development includes many empty sites with fallen construction hoarding, blanked-out billboards, and empty skeletons of structures with no activity except stray soi dogs roaming the ruins, looking for their next meal.

Perhaps the most disturbing outcome of the site visits, and follow-up with development sales teams when there was someone who could be contacted, is the lack of certainty going forward. Phuket’s mass-market resort grade real estate sector is somewhat dependent on Chinese and Russian buyers. In 2019, 42% of overseas visitors came from these two source markets. Projects that are highly leveraged in single markets are the most impacted.

Today there are mounting cases of a sudden impact on projects who have defaulted on payments to contractors and there is a domino impact down the economic chain of sub-contractors and suppliers. Legal cases reportedly are rising and in cases of bankruptcy or liens by financial institutions or contractors, those at the end of the food chain are property buyers.

Or in more extreme cases, developers who funding off of purchasers’ payments, in this situation often it’s nobody home time.

Tragically the buck stops with the very single investors who enabled the development in the first place. And the truth is, all that is left are broken promises, empty bank accounts, and often little or no recourse. But, what you have to ask is, how did we get here?

Over the span of more than three decades, starting with the iconic Amanpuri in 1988 and later the flagship Banyan Tree, the concept of holiday home ownership in a five-star resort established Phuket as Southeast Asia’s leading leisure real estate marketplace. But similar to many success stories, once tourism and airlift access exploded, a mass-market boom took hold that created a slipstream for bigger, but not necessarily better investment property developments.Was this a new concept? Not at all. One only had to look at the towering behemoth skyscrapers along the sunburned palm-fringed beaches and coastlines in Hawaii or Spain that had flourished in the 1970s and 1980s. But in Southeast Asia, with its rocket-propelled economic rise, coupled with a growing number of cashed-up expatriates working in Hong Kong, Singapore, and other Asian gateways, the stage was set for what could best be coined ‘the good, the bad, and the broken-hearted.’

Fast forward to the early 2000s in a landscape where financial markets soared and easy money was on hand, Phuket’s holiday home property market burst wide-open. But, as early buyers mostly ended users or those looking at a later retirement or second home, the millennium brought in the speculators.

Again, nothing new here and you can look at most leisure real estate destinations when they go mainstream and one key learning from watching these markets rise and fall is that once volume-driven supply comes into the market, every manner of investment scheme comes out. And, so it did. While the island paused during the Global Financial Crisis (GFC) of 2008, there were failed projects in Phuket and a marked number of developer defaults that can best be remembered by a few remaining mid-rise vacant structures as you drive around coastal highways and byways.

Memory is a funny thing and people tend to forget quickly. With Asia leading the world in recovery after the GFC, a rising consumer class and developing mass markets in China and Russia drove tourism numbers up, up, and away. Suddenly tourism was the golden goose and everyone wanted in, at any cost. And that cost, become a commodity, going lower and lower as numbers grew.

For developers, the easy sell was small, smaller, and smallest units. With a recipe of low entry pricing points, they often compared their projects to nearby hotels where occupancy soared. Though in reality, despite the facilities, aspect, and quality having little in common, buyers leap headfirst into the dream. What sealed the deal was guaranteed returns of eight, nine, or ten percent. With bank interest rates going down, unrealistic expectations took over as the value proposition was hard to ignore.

With prime land plots in Phuket at a premium, or high barriers to entry, a new breed of condo-hotel developer gravitated to less prime inland areas but all the while touting their products were in line with the best resorts and endless returns. The island’s traditional hotel pipeline also soared as local and foreign investors wanted in on the party that wouldn’t end.

Then came the pandemic. The unthinkable happened. Tourism forgot their bulletproof vest and COVID-19 was a shot to the heart.

Today, the ghosts of the broken dreams of property buyers should haunt Phuket’s real estate industry and usher in a new era of responsibility. I have covered the real estate market for over twenty years and still get the messages from buyers before the GFC who still wonder, have they lost it all, is there any hope? Tragically, in most cases, there is absolutely no hope. The money is lost forever.

The message here is about the need for transparency, responsible brokering, more legislation, and a way forward for property buyers’ rights in cases of default. Much of this is why due diligence is needed and more education for buyers.  A follow-up piece is coming shortly addressing guaranteed return hotel schemes and the basic areas that need to be looked at before buying so stay tuned.


The pandemic era of the past two years has brought a rising flow of new incoming residents to Phuket from both abroad and from Bangkok. What is clear is that the scales have been tipped, as rental demand has vastly exceeded supply in upscale and luxury properties.

Urban flight is the trigger that has driven Phuket’s once investment-focused property market in an entirely new direction. This dynamic shift has resulted in a dramatic return to real estate fundamentals.

In the backdrop of an inward rush for single-family homes, many developers have exhausted inventory and in the wake of new launches, have sold out at a rapid pace. One prime example is the Trichada branded estates in the prime Laguna-Cherngtalay area. The developer who amassed strong credentials with the successful Sai Taan project followed with three Trichada branded ones.

The group’s brand new pool villa project offering that has just come on the market is named Trichada Breeze.  With eighteen three and four-bedroom resort-styled homes in its first phase, anxious buyers have snapped up five units in the first weeks after the soft launch. With prices that range between THB15-23 million (USD440,000-675,000), the homes are tapping into a soft spot in the market.

Speaking to real estate agents across the island, many renters are looking at the northwest areas of the island such as Kamala, Surin, Bangtao, Cherngtalay, Layan, and Yamu. Many renters who are moving to Phuket consider key demand generators like international schools as prime motivators with British International and UWC often cited due to their prestigious overseas affiliation and curriculums.

The surge in single-family homes has also been exceptional in the THB30-60 million (USD1-2 million) band as can be seen in a growing collection of projects by Botanica and Anchan.  Both are leading examples of strong demonstrated success with buyers able to obtain premium rental levels and above-market capital appreciation. Resale demand due to the lack of new products in key areas has pushed owner gains higher.

Looking at key advice for prospective purchasers, early buys off-plan in a good location and experienced developers typically generate the highest appreciation. Four-bedroom single-family homes are in short supply and fit the profile of families who are relocating from Singapore, Hong Kong, and Bangkok. The latter is driven by a rising tide of multigenerational living and the need for working from home space or areas that buyers want to customize for their hobbies or lifestyle.

Major Phuket retail malls which have over 500,000 square meters in leased area space according to research by C9 Hotelworks are reporting a pick-up in customer demand. The increases are a combination of higher seasonal long-term stays by part-time residents, a spur upwards in domestic travelers which are Thais who are attracted to malls, and overall flow of visitors to the island as quarantine measures lessen.

Making business news has been the island’s second-largest mall Jungeylon in Patong with 200,000 square meters of space. They have embarked on a two-phase plan that will see interior spaces upgraded and reopened by the end of this year, and exterior facelift within next year.  One key feature of the new Jungceylon will be a digital amusement attraction.


This comes at a time when Phuket is bracing for the opening soon of the largest amusement attraction Andamanda. This massive best-in-class park is being developed by Thailand’s Proud Real Estate Group which also owns and operates Vana Nava Waterpark in Hua Hin.

While the global pandemic has raged across the world, many island destination’s across Southeast Asia have shown remarkable traction in luxury real estate. From Phuket, to Koh Samui and down to Bali similar pushing upward in demand are now the norm. Let’s take a quick look at the Top 5 Trends in Phuket in a real estate update –


During the pandemic Phuket has experienced an influx of wealthy elite Thai villa buyers from conglomerates and family offices. As word of mouth spread in Hi-So Bangkok circles, this spurred friends, other family or acquaintances to also buy villas. Layan Beach has become an epicenter of this new luxury push with branded developments tagged to Anantara and Avadina coming into the limelight. A similar push has been from high-net-worth Thai tech entrepreneurs and even connected to their foreign counterparts. Urban flight of Bangkokians is on the rise, given the impact of the ongoing pandemic, rising pollution, and emotional change in values towards a more healthy, balanced lifestyle.

Big, Bigger, Biggest

In broad terms, the gross floor area of luxury villas has doubled over the past decade. Mindful of the fact that tropical properties often have massive outdoor covered and outdoor areas, this also is growing but the key movement is in more interior spaces. This all comes at an interesting juncture when Thailand’s construction costs are currently escalating to levels above 10% and with steel and petrol pricing moving up, will only grow more expensive. But at the luxury level where during the pandemic multi-generational living is making a comeback and work from home is now the new norm. This is expected to only continue. It’s important to also see the relative affordability of ultra-luxury in Phuket when buyers are coming from Singapore, Hong Kong or London so while the sizes might be eye-popping, the terms of reference for owners are far beyond Phuket. 

It’s Not Just About the Beach

The perception about Phuket luxury villas is most often considered to be factored on two things. The first is West Coast locations, most often from Kalim, through Kamala up to Surin, Layan and onto Nai Thon. Second is elevations and what might be best termed ‘cliffhangers’

Of course, the reality is that you can go to the East Coast and Cape Yamu area where over 80  multimillion-dollar villas have been developed and sold or down to Panwa which after Sri Panwa helped form the ultra-luxury market is starting to see new projects starting to sell. Inland popularity is also moving upwards as can be seen by the entry of the wellness-themed community Tri Vananda or the rapid escalation of pricing points in new projects for developers such as Botanica and Anchan brands who now are pushing up prices beyond USD2 million and above. This shift is only going to continue given high barriers to entry for prime west coast land parcels.

A Degree of Separation

All too often luxury real estate developers are possessed by products versus people. Over the past two decades, there has been a direct connection in Phuket’s most expensive projects between the developer’s nationality, connections, and background. A number of micro precinct-type communities have evolved. One case in point is Allan Zeman and the two Andara branded developments on Kamala’s Millionaires Mile whose heavy influence in Hong Kong and Mainland China drove sales momentum. For all the hype on luxury brand marketing, ultimately word of mouth is often the biggest influencer for sales.

Lost in Space

There is little doubt the lowering of the age barrier of luxury home buyers and changes in pandemic lifestyle is creating a higher degree of customization for villas. These can be seen everywhere from flexible spaces that are sold to buyers who can customize in-villa spas, fitness areas, theatres up to art collections, meditation zones, and more robust working areas. Another evolution is developers leaving a portion of the GFA (gross floor area) as cold shell space, whereby they still earn development margins but allow buyers to design more substantial areas. Expect more custom designs, a greater focus on interior spaces, and changes in villa configuration for multi-generational living or friends and family stays.

To sum it all up, Phuket remains a strongly demonstrated luxury leisure market and this is expected to continue its journey forward but the above points out to decide changes in products and buyers in Phuket 3.0.

Thailand’s Raimon Land is developing 14 stand-alone luxury Rosewood branded residences on Phuket’s West Coast at Kamala.

The  Rosewood ultra villas have 4-6 bedrooms and are located in a private gated luxury estate. There is no hotel as part of the project.

Kamala is an upscale island destination and is well known for its Millionaire’s Mile with notable multi-million dollar estates such as Andara and Laem Son.

Sales will commence this year and project completion is set for 2024.

In the wake of the global pandemic, Phuket’s luxury villa market has continued to be red hot with an influx of overseas high-net-worth individuals and elite Thai buyers from Bangkok.




Japan’s alpine real estate land values have continued to rise for much of the pandemic, highlighted by the expansion of a growing Greater Niseko catchment area. We have seen developers now pushing out of the prime Hirafu area, taking a longer-term view of areas such as Hanazono and Annupuri.

There remains one clear trend in most resort areas the geography tends to change over time and as markets mature, luxury, mass-market, and niche products tend to diversify. You have to look no further than Richard Li’s Hanazono development with the Park Hyatt that now has seen considerable new products start to cluster in the area and even the upcoming Capella hotel and residences are betting big on the location.

Looking further at other alpine tourism markets in Hokkaido, C9 Hotelworks recently researched the hotel, tourism, and property market in Furano. Known as a two-season area, with summers dominated by domestic travelers lured by the spectacular lavender fields and more family-oriented winter skiers from overseas.

Recently, more developers from Niseko have started the development cycle in Furano, highlighted by the Fenix resort condominium. The area currently lacked branded hotels but we expect this to change and eventually the highly seasonal market will move upwards, driven by lower underlying land values and destination appeal.

Niseko and Furano remain distinctly different but yet, much of what appealed to overseas buyers in the 1990s remains showcased in Furano.

To download C9 Hotelworks new Furano Tourism & Property Review report CLICK


C9 Hotelworks and Delivering Asia Communications have organized a timely Bangkok-focused virtual business event on Tuesday 23rd November, 3:00 pm Bangkok Time | 4:00 pm Singapore/Hong Kong.

In the lead-up to the global pandemic, Bangkok was the world’s top destination attracting over twenty-two million travelers. Thailand’s international reopening on the first of November and Test & Go initiative with 63 countries now eligible for entry is an absolute gamechanger.

Join us for a fast, and furious forty-five-minute dive into how tourism and hotels are performing in this new marketplace. Our unique set of speakers will be presenting critical insights, facts, and perspectives that are relevant not only to Thailand but as a guide for other Asian markets in this new hospitality journey without maps.

Listen to six focused experts that are uniquely presented as our segments cover –The Data The Hotel Operator, The Hotel Owner, The General Manager, A Human Resources Perspective, and a Restauranteur.

This is part of a continuing series of virtual hospitality events from C9 Hotelworks and Delivering Asia Communications which is intended to create forward-looking conversations, promote a critical rethink of the industry, and offer learnings across a wide variety of subjects.


  • Jesper Palmqvist (The Data)– Area Director Asia Pacific, STR
  • Markland Blaiklock (The Hotel Operator) – Deputy CEO, Centara Hotels & Resorts
  • Sunny Bajaj (The Hotel Owner) – Managing Director, Amburaya Hotels
  • Nopparat Aumpa (The General Manager) – SAVP/General Manager, Banyan Tree Bangkok
  • Killian Donoghue (Human Resources) – General Manager, Le Meridien Bangkok
  • Rohit Sachdev (The Restauranteur) – Chief Executive Officer, SOHO Hospitality

Co – Moderators

  • David Johnson– CEO, Delivering Asia Communications
  • Bill Barnett – Managing Director, C9 Hotelworks

Registration Link (Free)

Let’s talk real estate Phuket and one key fact is that tourism is a key driver of demand for the island’s resort grade property sector.

We had a chance to catch up with Stuart Reading who leads Banyan Tree  and Laguna Phuket’s property group.

Some of the highlights of the conversation centered on how deals have been closing during the pandemic, what Russian property buyers are looking for, and surprisingly how the Indian market is starting to see traction translating into sales.

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