Living by the sea
This article appeared in the April 2010 issue of Property Report Thailand.
At the beginning of 2004, Thailand axed its massive import duty and taxes on leisure craft, which totalled 245% of the value of any boat, ushering in a yachting boom that continues to this day.
At that time Phuket had two marinas, the Boat Lagoon and the Yacht Haven, but since then two more have been built – the Royal Phuket Marina (RPM), right next to the Boat Lagoon, and the Ao Por Grand Marina (APGM), in deep water two thirds of the way up the east coast.
Even the island’s provincial government has made an attempt to get in on the yachting boom, building a set of pontoons next to the long pier that juts out into Chalong Bay, long a favoured anchorage for less-well-heeled yachties.
At both the Boat Lagoon and RPM, property is a major component of the marina. The low-rise Boat Lagoon, designed along Italianate lines, has canals allowing owners of many of the units to park boats right outside, while RPM has “Aquaminiums” – penthouse apartments with private berths in the “basement”, and a private elevator connecting the two.
At the top end of Phang Nga Bay, reports Dexter Norville, director and head of estate management with Jones Lang LaSalle, a new hydrofoil port is just about to be developed. “There is a plan for a small 30-40 birth marina,” he adds.
APGM’s website states that the marina is “part of a 150-rai development plan [that] includes the development of private villas [and] an 80-room 5-star boutique hotel”. The villa/hotel element is still apparently a long way off; inquiries about progress were met with “We don’t really want to talk about that yet.”
Despite the Ao Por slowdown, the boating culture has firmly seized Phuket. The island now has three international sailing regattas and a regular racing series in Ao Chalong.
It is home to Latitude 8 Yachts, which builds racing and cruising catamarans; the Classic 22, a wooden speedboat; and the Phuket Sport 8, a very fast four-crew monohull racing sailboat. It is also home to Steppa Boats, which produces a line of fiberglass work and leisure boats, designed so that they can be backed up onto just about any beach.
Major agents on the island such as Lee Marine and Simpson Marine make it possible to whip out your platinum card and order anything from a Riva runabout to a 115-foot Pershing with gas turbine engines and a top speed of 52 knots (96 kmh).
The past three or four years have seen the boating/property combination spread out beyond the marinas. One of the first people to see the possibilities of this combination in Phuket was Chris Gordon, founder of SunSail. Before he sold it, Gordon had built SunSail up to the point where it had a swathe of dedicated resorts around the Mediterranean and the Caribbean and a worldwide fleet of some 900 yachts, including a dozen or so based in Phuket.
Gordon believes that Phuket, and Phang Nga Bay to the east of the island, are the ultimate cruising ground. In an interview a couple of years ago, he explained his enthusiasm: “Here you have the plethora of islands that leaves the Caribbean standing. There, you have an island and it’s 30 miles to the next one. It’s actually quite daunting, the open passages.
“Here, you can spend a week sailing, almost learning as you go. The backdrops and the scenery, and the beach bars – in cruising terms, it’s outstanding.”
He’s bet serious money on these advantages, building The Village, Coconut Island, on an island that’s three minutes by boat from Phuket. Phase 1 of the development has 44 villas ranging from two bedrooms to five, all with pools, a restaurant, a spa and a jetty. It will also have moorings and hard-standing for parking yachts when they are not in use for long periods.
The 24 absolute-beachfront villas have all sold, as have all but four of the other first-phase properties. Work has begun on Phase 2. The development is also operated as a resort, providing income for owners when they are not in residence.
The Village is one of a number of developments Gordon describes as having been developed “with life on the water being an integral part of the offering, the other parts being having a communal feel through being resort/hotel-included, plus being located to enjoy views and beaches and piers/docks for that life on the water.”
There is even a growing trend in Phuket towards property developments that may not have a built-in boating element, but have views of an anchorage or marina. As an example, Norville cites The Quays, a new project looking out across the Chalong Bay anchorage.
“The Quays exhibits all the popular qualities enjoyed by those who like to be on the water in addition to those who just like to watch, in stark contrast to those inland developments that lack excitement and animation.
“Generally people like to be entertained even when relaxing. The perception of entertainment [in this case, watching boats] can generally aid the occupancy rates and tariffs that can be achieved when comparing with inland.”
RPM’s developer, Gulu Lalvani, believes marinas and marine developments in Phuket have a massive upside. “There’s going to be a huge demand for marinas because we can’t accommodate all the boats that are coming in.”
Starting in May, he says, expansion work will begin at RPM, with the creation of a new non-tidal mooring basin to the west of the current one, accessed via a lock. Like the exiting basin, it will be ringed by homes for sale.
Will more marinas be built in the area? “I do see big demand,” Lalvani says, “but I don’t see the existing property developers having the financial muscle. Marinas are very expensive.”
What seems more likely in the short term is growth in marine-related developments such as The Village. A small private marina has long been planned for Cape Yamu, also on the east coast, where very high-end villas, which are already almost all sold, will rub shoulders with The Yamu, a luxury hotel with interior design by Philippe Starck, to be managed by Adrian Zecha’s GHM.
The marina faces stout opposition, however, from the local community and so may be a while coming to fruition.
Despite this, and despite the very stringent environmental regulations for marinas, Ian Henry, MD of Cape Yamu developers Campbell Kane, says, “Within 10 years we expect the development of a whole new tourist community sailing from island to island and resort to resort, stopping off at some of the finest restaurants in Phuket at some of the best hotels in Phuket.
“Now we have The Yamu coming out; already there is the Six Senses at Koh Yao and within five years we will possibly have a Kempinski, a Park Hyatt, a Jumeirah, a Taj and several others.
“Nowhere in Asia will be able to provide this level of upscale tourism in such a stunning setting. As one recent visitor to The Yamu said, it will be like the Amalfi coast of Asia.”
Kempinski was mentioned as the possible manager for the APGM hotel, so that may be some time coming. Given Dubai’s financial problems, the same may be true of the Jumeirah Hotel in the Barama Bay island development. But given the investment that’s already gone into these two – particularly Barama Bay – it’s a fair bet that high-end hotels will eventually open in both places.
Lalvani goes further than Henry. He sees Phuket developing into “the best yachting area in the world.” He cites Tourism Authority of Thailand statistics that show that 80% of tourists coming to Phuket take a boat trip while they are there.
In addition, he says, yacht owners who currently berth their boats in the Caribbean or the Mediterranean are realising that crew wages, maintenance costs and berthing fees – even fuel prices – are far lower in Phuket than they are in either of the other two places.
These factors, combined with the relative ease of access through Phuket’s international airport, are making the island increasingly desirable to high-net-worth individuals. The fact that a terminal for private aircraft recently opened at Phuket’s airport underscores this argument.
Phuket is an island surrounded by fine marine scenery. Anyone with a motor yacht is within a few hours’ motoring of Malaysia or the bays and islands of southeast Myanmar, and Singapore and Indonesia are also within striking distance.
All that is lacking at present is berthing for megayachts. An increasing number of these visit Phuket regularly, among them Octopus, at 126 metres the ninth-largest private yacht in the world, owned by Microsoft co-founder Paul Allen. Yachts this size must still “drop the hook” offshore.
Yacht Haven can manage superyachts up to 60 metres in length and APGM can handle boats up to 80 metres, but neither has a significant property or retail infrastructure, and both are far from shops and other amenities.
Lalvani’s plan to create Zoran Island off Phuket City, with berthing for larger yachts (though still not up in the Octopus league), has been on hold for several years. This, Lalvani explains, is because Thai governments and rules keep changing and, in any case, no one has ever applied to build an island in Thai waters, so the regulations simply don’t exist.
But the obstacles won’t stop the juggernaut. Norville sees continuing growth in the boating-property equation. “The development of marine property has to some extent mirrored the development of marine technology. The thrill of being out on the ocean using modern boating technology is still there but requires less effort for more comfort. The same applies to the expectations of marine property buyers.”
© Alasdair Forbes 2010