Sponsored by Hotelogix
Experts in any field are instantly recognizable by the knack of making their chosen profession appear deceptively simple, and so it is with Pongphan Sampawakoop, CEO of Apex Development. “We build at cost, sell at market prices, and invest the funds,” he explained, making the business of real estate development sound entirely straightforward.
Pongphan was talking to Hotelintel.co on the subject of the latest project for Apex in Krabi, which will commence with the development of a 100-rai site to build a new Club Med beachfront resort and residences at an isolated Long Beach location which provides all the space and tranquility a typical Club Med property demands.
“Krabi has a different character to the resorts in Phuket,” he said. “It has nice beaches, but also groups of islands which are very popular for diving and snorkeling. It also has forests as it’s on the mainland, and it offers unspoiled natural surroundings. It’s also unseen, which makes it ideal for development, and the airport is big enough to double the current tourist numbers. Long Beach is located just 25 minutes from the airport, so while it’s isolated, it’s also very convenient.”
Pongphan made the point that he had been well aware of Club Med for more than 30 years, and had the brand in mind when he selected the parcel of land that will be used for the new 300-key resort along with its 50 deluxe residences. The intention is then to develop adjacent sites with other major brands although the deals have not yet been signed. However, he also added that it is not always easy to find brands who are willing to fit in with the working style of Apex. This is because many brands prefer not to manage the rental aspect for the residence components, preferring only to manage the hotel.
Having a major brand to manage the residences is a key element in the Apex strategy, because investors are more willing to support a project when a popular brand is involved since this increases the potential for daily as well as monthly or annual rentals, thus providing a much higher ROI for those investors. In addition to the confidence this arrangement provides for investors, branded properties also tend to appreciate in value over the longer term.
The first partner Apex found for this type of arrangement was Mövenpick, with similar deals later being struck with Sheraton. For Pongphan, it is important that the brands adjust to the needs of the owners, and this takes flexibility on their part. However, more recently Marriott have been willing to consider this type of contract, and there has been interest from other brands including Accor and Hyatt.
Of course, one possibility might be for Apex to start their own brand, but Pongphan carefully dismissed the notion. “It would take five to ten years, and in my mind I know it’s difficult,” he mused. “I look at the Thai brands like Anantara and it takes time – and suffering in the first five years.”
While a new brand for Apex clearly isn’t on the horizon, Pongphan was much more optimistic about the real estate prospects for Thailand in general, noting that Bangkok was now the second-most visited city in the world, with Phuket ranking eleventh on the same list, above megacities such as Tokyo. He stressed that this represents a great opportunity to invest in further development to meet the needs of the increasing numbers of visitors – something that both he and his company are perfectly placed to do.