Shaun's Review: Wyndham Grand Nai Harn Beach, Phuket, Thailand

9 min read

Looking for an international investment property overseas?
Here is my review of the Wyndham Grand Nai Harn Beach in Phuket, Thailand.

Project Background

Wyndham Grand Nai Harn Beach in Phuket, Thailand, is a freehold residential condominium project by developer CISSA Group Co., Ltd. together with the Wyndham Hotels & Resorts brand name to manage the property and ensure a high service standard for guests. 

T.O.P-ing in early 2020, the Wyndham Grand Nai Harn Beach was built originally as the Coco Sea Condominium, comprising of 12 four-storey buildings located on 1.76 hectares of land some 800 metres from Nai Harn Beach. In 2016, Coco Group Sales Manager Prakaidao Duangrak reported that 150 units (about 40%) of the project had already been sold since the off-plan sales launch in January 2016. At the time, the project was given a reported development cost of around USD46.25 million. During an open house launch last year the project value was reported as USD92.47 million.

Wyndham Grand Nai Harn Beach will have 353 units for sale spread over 4 floors, with unit sizes ranging from 437 Sqft – 589 Sqft and prices starting from SGD$3xx,000.

Buying Thailand Properties

Foreigners are not allowed to own land in Thailand. However, foreign nationals do have the right to the ownership of buildings distinct from the land such as condominiums.

Foreign nationals may own:

  • A unit in a registered Condominium.

  • A building distinct from its land.

  • A registered leasehold of up to 30 years for all types of titled land or buildings.

Foreign nationals may not own:

  • Freehold land.

  • More than 49% of the shares in a Thai company that owns freehold land.

Facilities and Finishings

A clause in the Hotel Act exempts small residential properties. “Any residential premises that are open for rent with no more than four rooms and with a total service capacity of 20 guests is exempt from the Hotel Act,”. The ground, however, is more murky for those renting in condos. To obtain a hotel license, they must prove they employ a qualified hotel manager, that they comply with the Building Control Act, have a Building Permit and Use Certificate which states that the existing building can be used as a hotel. This Hotel Act is very unsupportive to hotel businesses and the Airbnb business model.

The Wyndham Grand Nai Harn Beach is a condominium / hotel or “Condotel”. Condotels combine the services of a hotel and the legal structure of a condominium and are ideal for anyone interested in a sound investment opportunity.

Investors can purchase individual properties, and then rent it out as hotel accommodation. Each owner is typically allocated a certain number of days of use for their unit each year (usually between 2 weeks and 1 month). The rest of the year, the property is rented by the hotel. Note that the hotel will usually run the resort and the rental business. A Condotel will typically offer the option of either a guaranteed rental return or entry into a rental pool.  In a rental pool, participating owners are all required to offer their units for rental, then the rental income is “pooled,” with each owner sharing in the profits.

A Condotel has both condominium and hotel licenses, therefore units may be rented out on a daily basis.  With Airbnb growth, the ability to offer short-term rental represents a massive advantage for foreign investors. The Wyndham Grand Nai Harn Beach has facilities such as 24 Hours Security, Concierge Services,  Covered Car Park, Dining / Restaurant, Function Room, Gym / Fitness (Room / Court), Kids Pool, Lounge, Multi-Purpose Hall, Nursery, Kids Playground, Reception / Arrival (Lounge), Sauna / Steam Room, Spa and Swimming Pool. There is complimentary Wi-Fi throughout the resort and a daily round trip shuttle to Nai Harn Beach and Phuket Old Town.

The Wyndham Grand Nai Harn Beach will be fully furnished according to international 5-star hotel specifications with a flat-screen television, central air-conditioning, artwork and interior design, and a ceiling height of approximately 2.8m.

Location

Phuket is the largest island in Thailand and is in the Andaman Sea in southern Thailand. In 2019, Bangkok ranked 1st surpassing Paris and London in Mastercard’s list of “Global Destination Cities Index 2019” with 22.78 million visitors while Phuket was 14th with 9.89 million visitors and Pattaya 15th with 9.44 million visitors. Phuket has some of Thailand’s most popular beaches, mainly situated along the clear waters of the western shore and is home to many high-end seaside resorts, spas and restaurants. Phuket City, the capital, has old shophouses and busy markets. Patong is the main resort town and has many nightclubs, bars and discos.

Situated in southern Phuket, Wyndham Grand Nai Harn Beach is around 1.1km (13 mins walk) to Nai Harn beach according to google maps. Getting to Wyndham Grand Nai Harn Beach from Phuket international Airport (HKT) via car will take around 55 min to 1 h 50 min (depending on congestion) to travel the 48.5km compared to the usual tourist hotspot of Patong’s travlling time of 50 min to 1 h 25 min (depending on congestion) for 36.2km.

Developer and Manager Background

Wyndham Hotels & Resorts is composed of more than 9,000 hotels under 21 brands spanning more than 75 countries in six continents with it’s parent company Wyndham Worldwide having their headquarters in Orlando, Florida with more than 40,000 employees around the world. 

Wyndham Grand Nai Harn Beach would be Wyndham’s second of four managed properties under the Wyndham brand in Thailand. The third also will be on the island of Phuket, The Wyndham Chalong Phuket, located off Soi Songkhun, just north of Soi Palai, Chalong in mid 2020 and the fourth is Wyndham Atlas Wongamat Pattaya, expected to open in late 2020.

The first one in Phuket, Wyndham Grand Phuket Kalim Bay is a 5-star property with 194 non-smoking guest rooms, an outdoor swimming pool, and on-site restaurant. A “Very Good’ 4 out of 5 rating from 559 reviews on tripadvisor for Wyndham Grand Phuket Kalim Bay shows that Wyndham staff in Phuket, Thailand are doing a fairly good job. Owners of the new Wyndham Grand Nai Harn Beach should be assured that with experience in Phuket through the managing of their Kalim Bay property, things should run pretty smoothly as it would not be their first rodeo in Phuket.

Other Considerations

Thailand has long been a popular tourist destination. However, this year numbers are on the decline, with the Chinese tourists in particular staying away. The holiday island of Phuket has been hit especially hard. Mainland Chinese tourists arrival figures in 2019 continue to drop with an 18% decline, year on year. Russian tourists also dropped 3%, and Australians down 1%. South Korea rounded out the Top 5 international source markets with a 3% gain. Looking at growth, tourist arrivals from Malaysia doubled year-on-year figures, and despite a strong baht, UK tourists posted a rise of 36% and Germany 7%. The soaring number of Indian visitors to Phuket for the first seven months of 2019 has propelled Indian tourists into the Top 5 arrivals for the first time. Arrivals from India from January – July, compared to the same period in 2018, grew 354%, amassing a total of 186,360 arrivals.

Sales Packages

  • Free Accommodation per year–30 nights on non-peak period

  • Special Discount of 30% for Wyndham Grand Nai Harn Beach Phuket

  • Membership Card for other services

  • Accommodation Exchange Programme with RCI timeshares

  • Hassle-Free Investment with Free Furnitures and Accessories, Free Electrical Appliances, Free Sinking Fund, Free Common Fee, Free Transfer Fee, Free Electricity and Water Supply Meter.

  • No Expenses on Monthly Electricity & Water Supply, Maintenance and Repair Fee, Renovation, Unit Insurance and Other Utility Fees

Package 1:
-Guaranteed Rental Returns for 2 years @ 7.7% (6.545% nett)
-3rd to 15th Year – Profit Sharing ~10% (~8.5% nett)
-No Buyback Guaranteed
Package 2:
-Guaranteed Rental Returns for 5 years @ 6% (5.1% nett)
-Developer Buyback on the 6th Year + 10% (total 110%)
Package 3:
-Guaranteed Rental Returns for 5 years @ 6% (5.1% nett)
-Developer Buyback on the 6th Year + 10% (total 110%)
-Get 1st Year Yield Immediately
Package 4:
-Guaranteed Rental Returns for 5 years @ 6% (5.1% nett)
-Developer In-House Loan (50% of Purchase Price) @ 8% interest for 5 years
-6th to 15 years – Profit Sharing ~10% (~8.5% nett)
-No Buyback Guaranteed
*All Yield subjected to Withholding Tax 15% (nett shown is after withholding tax)

Looking at the sales packages, what stands out to me is Package 2 with decent assured returns of 6% (5.1% nett) for 5 years and an exit strategy in place with the assured gain from the developer buyback on the 6th year. If you love and frequent Phuket, the free accommodation of 30 nights (non-peak) per year is very enticing considering a return ticket SIN-HKT-SIN costs below SGD$300.

TL;DR

Pros

Pros

  1. Area for tourists yet not filled with tourists like Patong.
  2.  Branding of Wyndham gives the development more clout with tourists
  3. No ABSD for Singaporeans looking for Investment properties.
  4. Smaller quantum (Prices start from SGD$3xx,000) compared to a 1 bedroom condo in Singapore (Prices start from SGD$7xx,000)
  5.  Sales Package 2’s Guaranteed Rental Returns for 5 years @ 6% (5.1% nett) and Developer Buyback on the 6th Year + 10% (total 110%) stands out as an investment with an exit plan and decent returns.
  6. Freehold tenure.
  7. Able to rent out easily even if Airbnb ban is strictly enforced as it is a condotel.
  8. If you love and frequent Phuket, the free accommodation of 30 nights (non-peak) per year is very enticing considering a return ticket SIN-HKT-SIN costs below SGD$300.
Cons

Cons

  1. Not the main tourist destination in Phuket (that would be Patong).
  2. Over an hour’s travel by car from the airport
  3. Prices start from SGD$3xx,000 full cash (8% interest rates, not worth loaning)
  4.  Phuket is only 14th in Mastercard’s list of “Global Destination Cities Index 2019” with 9.89 million visitors compared to Bangkok at number 1 in the world with 22.78 million visitors.
  5. Visitor numbers from Mainland China have dropped 18% year on year (2019).
  6. Currency risk of the Thai Bhat.
You can browse my international property guru website for the 200+ unique portfolio of international propertiesSingapore new launches, and resale real estate. Alternatively, you may want to contact me, Shaun Lopez, at +65 82585190 or email shaun@internationalpropertyguru.com
 
To your Success,
Shaun Lopez

Contact Shaun Lopez for Your Real Estate Enquiries​

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