From IT professional to real estate developer, the journey of Habitat Group CEO Chanin Vanijwongse started out with the purchase of a condominium on upper Sukhumvit which he originally intended to use as his new home. However, realizing that it could be redecorated and sold on at a profit, he did exactly that, before picking up a new unit for 7 million THB just across town on Sathorn.
“I noticed the amount of profit I was able to make from just a decorated room, so I hired a professional interior designer to decorate and add value to my new room at Urbana Sathorn,” he explained. “I lived there for about six months and sold it for 8.5 million THB within a year,” revealed Chanin
“Then I purchased two rooms at The Met and one at the Athenee Residence prior to their construction. One of the rooms I bought for 11.5 million THB at The Met sold for approximately 14 million THB. Next, I was able to sell the room at Athenee Residence for 12 million THB within a month – and I was still able to enjoy the facilities of the residence as well as the profit, even when I wasn’t living there.”
“I enjoy working with luxurious properties because it’s beneficial and convenient in many ways. Moreover, it’s very easy for a luxury property to increase in quality, allowing it to increase in value as well. For example, upgrading from a three-star property to a four-star, and five-star. Within two years, from 2006 to 2008, I moved about ten times, which is ridiculous,” said Chanin.
Chanin was not the only one to see the potential in selling condominiums as a private investor, so as prices began to rise, the desired yields were no longer so readily available. It was necessary for Chanin to look for opportunities in other kinds of real estate.
“Nowadays, there are more people looking into the real estate business including long-term investors and speculators. I decided that working with condos was not going to be easy, so I turned to invest in townhouses. I bought about five townhomes, where the cost was about 10 million THB per property, which sold for about 15 million THB each. So now it was about buying and redecorating owned properties instead of purchasing and renovating new properties, which was difficult, so I became a developer instead.”
Soon, however, despite Chanin’s preference for urban properties, it was necessary to look for a new niche to ensure profitability. Vacation homes seemed to be the perfect vehicle, appealing to Chanin’s appreciation of luxury and design. The first project of this kind was The Ville Jomtien Pool Villa which consisted of 80 homes on a plot of 32 rai. Initially, it the units were intended to be sold individually, but Chanin soon turned it into an investment opportunity for those looking for a vacation home.
“I took over and changed the concept into vacation homes, so we installed a 15-meter pool and about three to four bedrooms in each furnished home. By turning each home into a luxurious and furnished unit, I was able to gain more profit. I created a management team which has the job of finding clients by linking up with Agoda, Booking.com, and Expedia. We offer services that will take care of the client’s property including maids, gardeners, and electricians. We end up with a product that clients can live in as well as putting it up for further investment, so we have 40 homes to live in and 40 for investment. We offer investors a fixed yield for the first three years, at 7 percent profit per year. We were the first ones to present this lifestyle concept at the Sirikit Convention Center and got good feedback because the pool villas were offered for rent, delivering a healthy ROI for investment buyers. The project was a success, and we sold all 80 homes within two years,” he explained.
With this initial success under his belt, Chanin soon became even more deeply involved with property development, playing a major role in the evolution of a number of Pattaya projects, including X2 Vibe Pattaya Seaphere, X2 Pattaya Oceanphere, Best Western Premier Bayphere Pattaya, Wyndham Atlas Wongamat Pattaya, and Ramada Mira North Pattaya.
We asked Chanin what was so attractive about Pattaya that persuaded him to invest all of his eggs in that particular basket.
“Pattaya has one of the greatest hotel occupancy rates in Thailand, at about 70-90 percent all year round. The reason is that it’s located near Bangkok, near the sea, and in one of the industrial areas of Thailand, meaning that expats who work there have easy access to Pattaya. Ultimately, anyone can reach Pattaya easily, normally within a day from Bangkok. It’s not like Hua Hin where a visit normally takes about two nights, so it isn’t really recommended for a quick trip when compared to Pattaya. People go to Pattaya for the lifestyle experience, and usually not for a ‘fantastic beach experience’. That’s why we wouldn’t focus much on beach services, but instead we tend to focus on lifestyle services and facilities such as shopping malls.”
“The challenging part about these projects is that we must manage them in such a way that enough profit is made to satisfy the guaranteed yield value for investors (7 percent yield per year for the first three years). If the profit doesn’t reach the 7 percent yield, we complete the value with our own spare money. There is a certain amount of pressure, but this business is sustainable and allows our cash flow to be stable in the future.”
While Chanin appears to be heavily invested only in Pattaya, the Habitat Group does have plans to look beyond this area in the coming years. “Phuket seems like an exquisite place to invest in even though it has a lot of competitors,” Chanin observed, hinting at future possibilities, “but for the next 3-5 years I would like to keep focusing on development in Bangkok and Pattaya.”
Given that these vacation homes or lifestyle properties generate their yields through providing services similar to those of hotels, we had to ask Chanin one final question. Is it likely that we will see Habitat Group becoming a hotel group at some point?
“It is possible,” he mused, “but very unlikely. We would probably be the ones to monitor instead. This is because of a lack of abilities in the field of hotel functions such as sales. Either way, our true and main mandate is to invest in hotel chains and brands.”