Property developer the Absolute Group announced a new fractional ownership programme on April 24th. In early May, the Group will begin selling fractional shares in the Bangla Suites Jacuzzi Condominiums in Patong and the Absolute David Lloyd Beach Club at Nakalay. As part of the deal, the vacation properties come with top-end luxury amenities--including access to a speedboat to take owners on daytrips to surrounding islands.
Fractional ownership is not new in Thailand, but the announcement marks the first such programme on Phuket. Absolute Group Chairman Bryan Lunt told a press conference that he's targeting a new market for Phuket real estate. "I think there's a lot of properties available at 10 million baht and at 6 to 7 million baht, but there's no one at 2 to 3 million baht," he said. "It's much easier for some people to spend 3 million baht and use it for 2 or 3 weeks. Why own all of it, when you can own just the part you use?"
The idea of fractional ownership originated in the US during the early 1990s. Since then it has become popular in the US, the UK and Europe as a way for groups to share the cost of pricey assets like aircraft, yachts and vacation properties. Fractional ownership is fundamentally different from a timeshare, which sells only access to the property. "It's an asset," Lunt said. "So if you want to sell it, you can sell it. If you want to hand it down to your children, you can hand it down."
Property laws in Thailand complicate ownership somewhat but, in practice, the fractional programme Lunt detailed works like any other leasehold vacation property held by an offshore corporation. However, instead of one person holding all shares of the corporation that owns the property, the shares could be divided among up to 13 owners. Fractional shares in the new programme are sold in minimum 4-week, 28-night blocks. Pricing on blocks varies according to the time of year the buyer wants access to the property. "Prices start at 750,000 baht," Lunt said. "Obviously it's seasonal, and obviously Christmas and New Year's are more expensive. It's supply and demand."
The fractional ownership programme continues a partnership between the Absolute Group and the David Lloyd Group (DLG) headed by former pro- tennis star David Lloyd. After retiring from professional tennis, Lloyd became a successful entrepreneur by founding a chain of racquet and fitness clubs in the UK. DLG has expanded the concept to sports-themed resort locations around the world.
Lloyd began investing in Phuket late last year, announcing a partnership with the Absolute Group to build and operate the Absolute Sea Pearl Villas and Spa Resort, near Patong Beach. Most recently, the David Lloyd Group announced in early April that it had acquired the Turtle Cove development on Mai Khao Beach. The new fractional ownership programme includes units available at the partnership's Absolute David Lloyd Beach Club at Nakalay. "Instead of selling them as standard apartments, we had to give them something that gave them a wow factor," Lunt said. "The idea came up of offering a speedboat for 3 days a week as well as very modern interiors."
The link-up with DLG, Lunt added, was also a way to increase the wow factor on the fractional-ownership programme. "I invited him up here to play golf, and we seemed to have something in common," he said of the beginning of their partnership. "He came to Phuket at my invitation."