There have been new trends in the Thai property market being Branded Residences. The first was a shift away from residential units to mixed commercial and residential units. There had been better demand for mix development property. This had moved more hotel chains into the property business by making mixed property but linked to their branded hotel. There have been a number of projects in this regard over the past few years.
Branded Residences
Hotels have now viewed the rental income as a stable and steady income from branded condominium units and villas in the tourist areas where the people who rent also has access to the amenities of the hotel. This does create its own issues as the condominium units and villas being that they belong to a hotel and as they already have a hotel license they compete for the same customers. Daily rates are also available with these since the hotel license exists. Much like mixed properties these types of branded rentals and developments offers the investors a steady income from rentals outside of the daily rate bookings.
The market created by AirBnB has introduced new problems as owners of their units started to rent their units on a daily basis which is not allowed as they need to have a hotel license for this type of business. The mixed hotel branded residencies do not have this issue as explained as Thai law will require a hotel license for renting out property for less than one month. Since many foreigners tend to rent before they buy it creates a buyers’ market in the end as well.
With the branding people are more confident in the projects management as well as the quality of the materials which have been used. If you are looking at buying a unit and having the management manage the unit for you then this makes it even easier and more appealing. The hotel recoups its investment and still gets management fees on the units being rented. The appeal to foreigners is that the quality of the build as well as its international management will provide them with excellent returns. This concept is a new dimension to mixed residential and commercial property.
Amanpuri in Phuket some 30 years ago was the first such branded residences development however today it is becoming more common than before. These have been followed by even larger developments with branding in Thailand with The Residence at Sheraton Phuket Grand Bay Resort being one of the best known in recent years. The concept is that you buy the unit and they will manage and rent out the unit while you can use the unit for 60 days of the year.
Think of it as timeshare at a different level with international management, quality materials as well as a good income while you still own a holiday home. Since these are also fully furnished it simply could not be easier for those looking for a good passive income.Always take legal advice before you sign any agreement and ensure that you understand this management agreement. Note that a brand does not always guarantee success as people have become ecologically conscience as well as having a good location and design.
