Phuket project targets Asia's gay couples
A resort development on Phuket is aiming to tap the 'pink dollar' by offering added elegance to attract same-sex couples.
The Lotus Gardens project is the first of its kind in Thailand specifically designed to appeal to same-sex couples by 'offering the outstanding services that a gay-friendly property presents such as elegant services and facilities,' according to the lifestyle consultant for the development, Bruce Stanley.
'There are gay-friendly destinations around the world, cruises and resorts in the Caribbean and the Mediterranean, and many tour operators are looking for a site in Southeast Asia for holidays for the gay-friendly market,' he said.
Located on Northern Phuket's Bangtao Bay, Lotus Gardens will comprise 24 two-bedroom residences and two duplex penthouses in a condominium layout with upscale resort facilities. There will be a small bar, a small restaurant and two swimming pools. Construction will begin in mid-April, with completion expected about 16 months later.
Prices at Lotus Gardens run from $2.5 million for a one-level garden residence to $4.6 million for a two-level penthouse.
Under Thai law 49 per cent of the condominium units can be sold to foreigners with freehold title. The remaining units, if bought by foreigners, must use a legal framework with essentially two purchase options.
The first is to purchase the freehold title through a Thai company. The shareholders have a controlling interest and weighted voting rights.
The second option is to purchase a 30-year lease with two 30-year renewable options. Under this scheme the leasehold owners have a controlling interest in the landlord company granting the renewals.
The developer is expected to retain ownership of up to four units. The remainder will be aimed at investors in Singapore, Kuala Lumpur or Bangkok. The project held a soft launch in Hong Kong two weeks ago, and was formally brought to market last week. No units have sold so far.
Buyers have the option of taking the condominiums as owner-occupiers or joining a pool scheme to rent them to holiday-makers, while retaining the properties for their own use for set periods.
While the concept might be new to Asia, gay-friendly residential and resort projects are well-established in Europe, particularly London, and on the West Coast of the United States.
Gay-friendly establishments do not necessarily cater to an exclusively gay clientele. 'In Europe, most gay-friendly hotels have a mixed clientele of both gay and straight clients,' Mr Stanley says. 'The straight clientele enjoy the fun and additional services offered in a gay-friendly property.'
The tourism dollars generated by targeting same-sex couples is one of the fastest growing markets worldwide, estimated to be worth #95 billion ($1.41 trillion) in Britain alone.
'The pink market has a relatively short history, is generally middle-aged, and has very high spending power because there are not many families with kids,' says Nick Anthony, managing partner of Surin Beach-based Indigo Real Estate.
'As professionals working in fields like advertising, the arts, and finance, they have a high earning capacity. When it comes to properties, they have a serious design ethos, meaning a demand for high attention to detail.'
Affluent gay tourists and property buyers tended to be well-travelled and know quality. They had high standards and expected the best that money would buy.
In preparing the Lotus Gardens property, the developers took into account their target market would be looking for more attention to detail, which would be reflected in imported bathroom fittings, and overall layout plan that was 'modern, elegant, and sophisticated'.
Mr Anthony said: 'They want fully outfitted sound packages, broadband, fibre optics in the walls, gourmet kitchens, and substantial entertaining areas. The average [straight] buyer just wants three bedrooms and two bathrooms. He is less particular about the fittings and [doesn't worry as much about] entertaining. If it's close to the beach, he is happy.'
Owners will have the option of enlisting their properties in a rental pool. No rental marketing agent has been selected, but the strategy is believed to focus on wealthy European tourists. The marketing agent will provide all advertising, with the homes probably packaged as part of excursions, including air fares and activities such as golfing and sightseeing.
'We are going to see strong demand out of Europe for these vacations,' Mr Anthony says. Several European operators had expressed interest in the project.
Mr Anthony estimates that well-managed resort properties in Phuket such as the Sheraton, Banyan Tree and Aleenta can yield returns of 6 to 8 per cent after expenses but before taxes. He believes a well-managed pink property such as Lotus Gardens could easily top that by a few percentage points.
'The operator's margins will be higher because this is a very targeted market,' he says. 'I think you'll see yields of between 8 and 12 per cent. There is lots of potential for investors, whether gay or straight.'
The project is designed by HP Architects of Singapore. British construction company Bellwater, the same group involved with construction of the Philip Stark-designed residential complex in Phuket, will oversee construction.