F1 racing club for Asia's mega rich
Williams and Lamborghini are joining forces to launch the world's first racing club for the super-rich in South Korea, writes Andrew Salmon
Are Asia's newest super-rich willing to ditch their weekend golf games in favour of thrashing supercars around a racetrack at a purpose-built resort on an island in the Yellow Sea? That is the bet being made by Weingrow, an investment firm with offices in London's New Bond Street and Seoul's Gangnam district, and its partners, Britain's Williams and Italy's Automobili Lamborghini.
Weingrow's managing director, Akis Stark, announced last month in Seoul that a memorandum of understanding had been signed with the city of Incheon, in South Korea, to launch the world's first racing and lifestyle club.
At a cost of "under US$1 billion", Stark, an Anglo-Greek entrepreneur, envisages a resort, informally dubbed "the Superclub", on a reclaimed island off Incheon by 2016. It will consist of a 220-room "seven-star" hotel - Stark declined to confirm that US fashion king Ralph Lauren will design it - around a five kilometre, Formula One-class racetrack.
There will be a stable of Williams Formula One cars and Lamborghini supercars, serviced by resident mechanics, and trainers coaching to develop the physical and mental skills needed for racing. A racing simulator will also deliver 4Gs of acceleration force.
"With the advanced engineering of Williams, the passion of the Italians and the chic of Korea, it will be a super project," says Alex Burns, Williams' CEO.
For the European firms, geo-economics is the lure. Incheon, a gritty port serving Seoul, is far from "chic", but it is home to Incheon International Airport - seven times voted the world's best airport - and is situated between the world's second- and third-largest economies, China and Japan.
And while the economies of Western Europe and North America are stuttering, growth in northeast Asia, the world's third-largest zone of economic activity, continues to accelerate, propelled by the economic engine of China.
"Europe has seen plus-minus growth, but we see fast growth in the supercar market in Asia," says Lamborghini's commercial director, Fintan Knight. "To locate in the centre of North Asia, we are really happy to support this project."
Lamborghini will be bringing a range of cars to Incheon, he says, both iconic models from the past and the latest high-performance rides. Knight says the Miura, Diablo, Gallardo and Aventador are on the list.
The Superclub has an Asia-specific business model: the exclusive golf resorts and swanky country clubs where the elite pay membership fees for both golf and après golf - the chance to network discreetly with peers from business, politics and the judiciary.
Stark believes Asia's next-generation super-rich - the children of established elite and a rising class of self-made entrepreneurs - will be more interested in burning rubber than potting holes and strolling across fairways. Some 73,000 supercar owners live within a four-hour flight of Incheon, and double-digit growth is expected in coming years, he says, citing commissioned research.
Weingrow anticipates 24,000 visitors in the club's projected first year of operation in 2016. The expected membership breakdown is China 35 per cent; Japan 20 per cent; Hong Kong 10 per cent; South Korea 10 per cent; Taiwan 5 per cent; and others, 20 per cent.
Knight notes that while the region is seeing expanding supercar ownership, it lacks the infrastructure for owners to push these dream machines to their limits. The Superclub therefore provides a real marketing opportunity.
"Lots of our clients love to challenge themselves, and if I live in Tokyo or Beijing, to come here to a purpose-built facility … well," Knight says.
For Williams, the project is "a bridgehead into Asia", Burns says. There is a strong regional market among Asian carmakers for Formula One collateral technologies such as energy-efficient and hybrid innovations.
He also notes that Formula One's fan base is evolving. "We are seeing a gradual change in the Formula One calendar; less in Europe, more in the rest of the world," he says.
Stark, the project originator, arrived in South Korea in 2010 to work in global strategy at Samsung. He was raised on car racing by his wealthy Greek family. He notes that the chance of winning the lottery is one in 60 million - but the chances of a lottery win are three times higher than that of driving a Formula One car. "We thought this was not fair," he says.
But given the difficulty of driving a real Formula One car, the vehicles will have "small adaptations" so they can be piloted by everyday drivers, Burns says.
Seoul is in favour of the project. South Korea has suffered from decades of under-investment in leisure and tourism, sectors historically under-prioritised by growth-focused governments promoting an "all work, no play" lifestyle.
"We need high-class, sophisticated leisure facilities," says Lee Charm, head of the Korean Tourism Organisation. "This is what I have waited for, this is what Korea needs."
For over a decade now, the country has been trying to lure investors by touting its strategic location between Japan and China as the "hub of Asia" and the Superclub certainly fits that vision. But will it happen?
Many dream projects - robot exhibition zones, casino resorts, Korean pop music arenas and movie theme parks - are reported in local media, only to vanish without a trace.
Kim Jin-pyo, host of the Korean edition of car show Top Gear, has his doubts. "When I heard this was coming to Korea, I thought, 'Would this dream become reality?'" he says - adding that he wants to be the first man on the track if and when it does open. Stark admits the club is not yet a done deal.
"It's very risky, but could bring great rewards," he says. "It is realistic, it is based around a unique concept, something never tried before, and that makes it a monopoly that will attract potential investors."
And the Incheon Free Economic Zone, where the Superclub will be situated, can confront naysayers with an extant crown jewel.
Songdo New City, a US$35 billion joint venture between US property developer Gale International and South Korean steel and construction giant Posco, has, in a decade, been built from scratch on reclaimed land. It boasts a Sydney Opera House-style convention centre, a Jack Nicklaus golf course, a New York-style central park, an international school and clusters of apartment blocks.
Later this year, staff of the UN's new Green Climate Fund will move in. Songdo beat out Geneva and Bonn, largely due to its pro-environmental development paradigm, in bidding to host the project.
And the city of Incheon itself has a motoring pedigree: it hosts the headquarters and main factory of carmaker Daewoo Motors, now owned by GM.
Correction: this story was updated on March 8 to correct Alex Burns's title to "Williams' CEO" in the fifth paragraph.