Long Tails and Luxury Sales

Jazz is filtering out of the Four Seasons Private Residences Bangkok show suite as long-tail boats, enormous sand barges and green clumps of hyacinth cruise down the Chao Phraya river, while striped catfish glide gracefully to the surface. The city’s constant traffic isn’t far away but here it’s a picture of serenity. I doubt ‘serenity’ has appeared too often in the opening paragraph of Bangkok travel pieces as this is a city which wrestles universally with tranquility.

As I was unwinding with a 90-minute aromatherapy massage in the Lullaby Spa, I heard the distant ping of the mall’s lifts and on the final afternoon, sipping on an ice cold green tea at the Museum of Contemporary Art, the terrace silence was periodically broken by the succession of ascending Air Asia planes. It’s hardly surprising when you consider Bangkok’s population, which stood at around 7.2m 10 years ago, is now nearer 9.4m, further heaping congestion on already clogged roads. So before exploring commercial elements with the residential-come-hospitality project now taking shape on prime land on the banks of the river, the notion of retreat luxury living in this pulsating city already looks fairly compelling; if ever there was a city made for urban retreats, it’s Bangkok, and I can’t imagine it will be any quieter when this five-star project completes in the fourth quarter of 2018. Country Group Development (CGD), the real estate development and investment arm of Country Group, says it is on schedule with the development of the 14.2- acre luxury mixed-use Chao Phraya Estate comprising – to give them their full titles – the Four Seasons Private Residences Bangkok at Chao Phraya River, Four Seasons Hotel Bangkok at Chao Phraya River and Capella Hotel Bangkok.

The development is Country Group’s largest project to date, valued at around THB32 billion. CGD recently secured project financing through China Ping An Bank which raises up to $375 million and the financing is managed through Landmark Holdings Company Limited, a joint venture between CGD and Beijing Construction Engineering Group (whose portfolio includes Al Reem Island Phase 1 in Abu Dhabi). Ben Taechaubol, CEO and Director of CGD, says work on the main tower comprising the 73-storey Four Seasons residences is up to level 11 and substructure and foundation works on the two hotels are “well on the way to completion”. “What makes it unique is this area is historic – the road outside was the first paved road in Thailand, and making new developments of a scalable size is very rare,” says Taechaubol, recalling when the opportunity emerged six years ago. “So we grabbed it with open arms.”

Cruising down the river at sunset the previous evening, the appeal of the waterside setting is immediately apparent, as is the scarcity of space. “We want to redefine waterfront living,” added the 36-year-old CEO, who joined Country State as Development Director following his graduation from university in Australia in 2005, and was appointed Group CEO in 2010. “Bangkok has some fantastic hotels and we wanted to tie up with the best operators to offer the best in Thai hospitality – it wasn’t just about who is popular now, but who we think will be quality operators here 20 years in the future.” Just as Belgrade’s new-look waterfront will feature a striking tower (see July-August issue), the Four Seasons Residences will be the high-rise centre piece.

The estate’s overall design has been conceptualised by Hamiltons International with interior designs from BAMO and PIA Interior Co., complemented by architects Dhevanand Architects Co. and P Landscape (landscape designer). Featuring “modern contemporary design and timeless elegance”, the 355 all-corner residences will start from 115 sqm for a two-bedroom residence and go up to 1,050 sqm for a penthouse, and average prices will be in the region of $950,000-$1 million, and $20 million, respectively. Looking at the show suites, the sharp finishings wouldn’t look out of place in most Gulf luxury hotels. “It’s all floor to ceiling glass so the rooms feel a lot bigger and the views are in your face. We have lovely terraces at the top – the Four Seasons residents’ club will be a triplex between floors 64 and 66 with glass on all four sides,” said Taechaubol. “On the river, we have a Residents’ river lounge too and longest boardwalk in Bangkok with plethora of fantastic restaurants, and there will be an amenities deck on the third level with 25m pool which faces the river along with gyms and private treatment rooms.” Complementing the soaring residences will be a discreet 101-key, all-suite Capella Hotel which will have an “intimate eclectic residential feel” with private waterfront villas and Presidential Villa – likely to be finished first – and 312-room, low-rise Four Seasons Hotel, positioned as an urban resort. The Capella will be Bangkok’s first all-suites riverside hotel and contain private river villas, grand ballroom, Capella living room and Auriga spa.

The Four Seasons Hotel will have a Grand Ballroom spanning 1,400sqm inclusive of pre-function spa, specialty conservatory concept for meetings and functions and sky terrace garden. It will mark Four Seasons’ comeback in the city, since the 354-room hotel it previously operated was rebranded Anantara Siam Bangkok Hotel in March last year. F&B concepts have been locked in and there may be a celebrity chef attached to one of them, although Taechaubol wants the venues to be “very approachable” to residents and visitors.

LUXURY BUYERS’ RESILIENCE

At times of global economic uncertainty, can investors for such opulent projects be found? Around 170 residence units have been sold to date (around 50 per cent), with a 50-50 split between Asian and international buyers. After achieving sales of THB700 million during a two-day exhibition in Hong Kong last year, its next step will be to target the UAE to accommodate the rise in Arabic travellers who travel to the country for business, leisure or medical facilities. Small functions targeting HNWIs in Dubai are planned in Q1 2017. “We’ve found that our clientele has always had the buying power and their decision to buy has always been independent of the market, and I sincerely mean this,” said Taechaubol.

“We don’t only sell super luxury in our group – I’ve seen the impact of a slowdown in the domestic and global economies on other projects, but with this one it’s really not been the case. I understand in the Middle East that there’s been a slowdown in appetite for real estate, but these individuals are still incredibly wealthy and looking for opportunities abroad. “We’re fortunate to have a top three international school, Shrewsbury, next to us and that’s providing a lot of purchasing and rental demand.” He added that the four-bedroom suite has been its best seller, by virtue that clients have managed to see exactly how it will materialise, in the show suite.

Buyers tend to follow a pattern. They visit and engage, and then the period to closing is often consistent. “The most drastic thing was the incident (August 2015), and there was a three-week pause, and then everyone who was interested ended up buying and it continued at the same pace,” he added. “Ordinarily in a project like this, you get great momentum at the beginning, and at the end, as everyone wants to buy when it’s finished. We think the last year will be incredibly strong.” He says for foreign investors, Thailand is very open, and condos and apartments can be sold and profits repatriated. Stamp duty, usually 3.3 per cent, is less in this case as it’s leasehold (1.1 per cent). Base services are combined in monthly charges, set at THB120 per sqm, and everything else is pay as you use. “Thailand, compared with Singapore, Hong Kong and Beijing, is on average six to 10 times cheaper,” he says. Kwanrudee Maneewongwatthana, Executive Director Marketing & Communications for Country Group Development, said the global trend in branded property investments continues to yield stronger investment values. “Asia in particular, has received high demand from affluent individuals for quality branded residential developments, making it a lucrative trend that has gained a significant momentum in Thailand.” Country Group is on the look-out for investment and acquisition opportunities in the global real estate market that are “distinctive in its offering”. It recently acquired two assets in the UK, the Anchorage Point Data Centre in London and a school in Brighton.

REFORMS SPUR ECONOMIC GROWTH

Thailand’s economy grew at an average annual rate of 7.5 per cent in the boom decade between 1986-1996 and 5 per cent following the Asian crisis during 1999-2005, according to The World Bank, and it forecasts growth of 2.9/3.3 per cent for 2016-2018. “The rate of economic recovery and reigniting growth, will depend on how fast Thailand can overcome factors constraining growth and promote a more inclusive growth model,” it states. Progress has been made with “broad reforms” covering economic stability, human capital, equal economic opportunities, environmental sustainability, competitiveness and government bureaucracies. But it notes continued reforms in areas such as education and competition, as well as public infrastructure management and government bureaucracies, will be particularly important to take Thailand from middle to high income.