Banyan Group launches largest private residential project in Phuket next to its Laguna resort

/ EdgeProp Singapore |

March 7, 2024 7:00 AM SGT

Ho: Laguna Lakelands is a strategic decision to develop a 276-acre (about 112ha) private residential community to capitalise on the strong demand for premium homes in Phuket. (Picture: Samuel Isaac Chua/The Edge Singapore)

Singapore-listed hospitality firm Banyan Group (formerly Banyan Tree Holdings) has embarked on its most ambitious residential development project in Phuket, Thailand: the US$2 billion ($2.69 billion) Laguna Lakelands. The private residential estate will have 6,000 units when completed. The first phase of condos and villas at Laguna Lakelands was launched in Thailand in February.

The upcoming residential project sits next to Banyan Group’s flagship Laguna Phuket integrated resort destination, which opened 39 years ago. It has eight resort hotels, an 18-hole golf course and branded residences.

“Phuket has evolved into a full-fledged holiday destination on a par with international hotspots like Majorca or Ibiza in Spain and the Caribbean,” says Ho Kwon Ping, executive chairman and founder of Banyan Group, which celebrated its 30th anniversary and corporate rebranding in January.

According to Ho, Banyan Group is Phuket’s largest private landowner and hospitality developer, with four sq km (four million sq m or over 43 million sq ft) of beachfront and forested hinterland. Ho reckons the group’s landbank is “about two-thirds the size of Chua Chu Kang town in Singapore”.

Banyan Group has launched 300 condo units and 14 waterfront villas at Laguna Lakelands. (Picture: Banyan Group)

Three sq km of the land owned by Banyan Group on the beachfront is occupied by Laguna Phuket. The group intends to develop the remaining one sq km greenfield site into its new “residential lifestyle community”, Laguna Lakelands.

For the past 30 years, the group has focused on developing the Laguna Phuket resort and adjacent plot. “We still have parcels of undeveloped land that we can utilise in the future,” says Ho.

Now, it has decided to develop 276 acres (about 112ha) of the hinterland portion of its land into a private residential community to capitalise on the strong demand for premium homes in Phuket.

Laguna Lakelands

Laguna Lakelands will eventually have five themed residential areas: Hillside, Orchard, Forest, Lakeside and Lagoon. Each residential area will be interconnected with extensive walkways and cycling trails.

The entire community of Laguna Lakelands will be anchored by a town centre with shops, services and other residential amenities, including a residents’ beach club, country club and lakeside dining. “The development of the residences around the Lagoon area and the town centre will be our focus for the next two years,” says Ho.

A central town centre with dining, retail, and services will cater to the 6,000-strong residential community at Laguna Lakelands. (Picture: Banyan Group)

The first phase of 300 condo units and 14 villas in the Lagoon area was launched for sale in February. The Lagoon area is the only one in Laguna Lakelands with villas for sale, says Ho. The other residential areas will consist of low-rise condos, including luxury penthouses.

The first phase of condos in the Lagoon area range from one- to three-bedroom units of 559 to 1,280 sq ft, with prices starting from THB6.8 million ($255,000).

The 14 four-bedroom waterfront villas measure 6,026 sq ft each and have private swimming pools and gardens. They are targeted at those who want a holiday home. Prices start from THB60 million.

About 30% of the condos released for sale have been taken up by buyers predominantly from Russia, the US and other European countries. Two of the 14 waterfront villas have been sold to buyers from Saudi Arabia and China.

Buyers have various financing options: progressive payment or a deferred payment scheme of up to five years. Ho says about half the buyers have opted for the five-year deferred payment scheme.

According to Banyan Group, condominiums are available on a freehold basis for both Thai and non-Thai buyers. However, under current Thai law, non-Thais may only purchase up to 49% of the condominium’s saleable area on a freehold basis. Otherwise, they may purchase any remaining units on a renewable leasehold basis - currently for a maximum period of 30 years as permitted by law.

For villas, the buildings themselves are sold on a freehold basis, and the land on which they are situated is available on a leasehold basis for foreign buyers. According to Thai law, non-Thai’s are not entitled to own the land itself. Land leases are registered with the government, currently for a maximum period of 30 years as permitted by law, and are renewable.

Fourteen Waterfront Villas have been launched as private homes at Laguna Lakelands. (Picture: Banyan Group)

Subsequent phases will continue to see a mix of residential options for sale — from entry- to mid-priced condos to premium penthouses and waterfront villas. “We want to foster a more diverse residential community in Laguna Lakelands,” he adds.

‘Phuket — Majorca of the East’

“The launch of [Laguna Lakelands] clearly shows the paradigm shift from Phuket as a great place to visit, to Phuket as a great place to live,” says Stuart Reading, managing director of Group Property Development at Banyan Group.

Reading sees growing demand not only for second homes but increasingly, also for primary residences. “High-quality property is still significantly cheaper in Phuket than in most of the buyer source markets like Russia, China or Europe.”

Ho observes that the development of hospitality and residential projects in Phuket has nearly quadrupled compared to before the Covid period. He reckons that the influx of visitors from Russia was the impetus driving the demand for luxury accommodation and hence, the increase in supply.

Most condo blocks will feature rooftop pools and resident-only spaces. (Picture: Banyan Group)

According to statistics from the Thailand Tourism and Sports Ministry, there were 1.48 million Russian visitors to Thailand last year. They made up the fifth largest group of foreign visitors. The top four markets were: Malaysians (4.56 million visitors), Chinese (3.51 million visitors), South Koreans (1.65 million visitors) and Indians (1.62 million).

According to the Thai tourism authority, about half the Russian tourists to Thailand typically stay in beach destinations like Phuket. From Nov 1, 2023, the Thai government has also extended the visa-free stay for Russians from 30 to 90 days.

With Phuket’s coming of age as an established international holiday destination, accommodation needs have shifted from short-term hotel stays to longer-term living needs, says Ho. He adds that Banyan Group’s flagship integrated beachfront resort, Laguna Phuket, already draws in a million visitors annually, or about 10% of all visitors to Phuket.

The shift towards longer-term stays means the absence of Phuket’s typical low tourist season. “In 2023, we observed that room rates for foreign tourists were largely steady throughout the 12 months,” according to Ho. “More tourists are coming to Phuket during the traditionally low seasons, which has been reflected in the property sales data.”

Strong local and foreign demand for Phuket homes

Ho says the demand for holiday homes or second homes among the Thais has also increased. He attributes this to the growing number of upper-middle-income professionals in Thailand, particularly in the creative industries. “We are seeing more local Thais based in Bangkok starting to decamp for two or three weeks in Phuket, as the area matures and is increasingly supported by amenities and services,” he adds.

Two-bedroom units have been popular among local and foreign buyers. (Picture: Banyan Group)

Most local and foreign buyers prefer at least a two-bedroom unit if they are looking for a holiday home or a second home in Phuket. This was evident at the 416-unit Skypark Phuket, a residential project within Banyan Group’s Laguna Phuket resort. Launched in 2019, it has a mix of studios, one- and two-bedroom condos. The two-bedroom units were the most popular, says Ho. The project overlooks the Laguna Phuket golf course.

Banyan Group will helm the master development of Laguna Lakelands, banking on its 30-year track record developing the adjacent Laguna Phuket and its various hospitality and branded residential projects.

Laguna Lakelands will have different residential offerings to cater to the different groups. For instance, it will offer luxury penthouses that appeal to the Russians, Chinese and Europeans. “They prefer their private space to suntan and relax at beachfront destinations like Phuket,” says Ho. “The luxury penthouse market in Phuket is a segment we are targeting.”

While the number of Chinese visitor arrivals to Phuket is just 25% of the peak in the pre-Covid period, Ho adds that the total sales of residential units to Chinese buyers have increased slightly compared to the pre-pandemic period. “I sense that there will be a pick-up in buyers from China, and this will be the next big wave of demand that we hope will support future sales momentum at Laguna Lakelands.”

The Lagoon area is one of the five themed residential areas in Laguna Lakelands. (Picture: Banyan Group)

He expects to see more wealthy buyers from Central Asia looking for luxury holiday destinations considering Phuket as an option, and high-net-worth Indian nationals who were previously looking at Dubai turning to Phuket instead.

Residential development to focus on Phuket

Banyan Group expects future growth to be driven by demand for its residential developments within Laguna Phuket, especially Laguna Lakelands, and its global portfolio of branded residences.

Laguna Phuket has a branded property division which offers sales and rentals of various residences, apartments, and villas for guests. The business has grown significantly in recent years and is now part of the group’s hotel management arm.

Hence, Banyan Group intends to grow its estate management arm to oversee the 6,000 new units as part of Laguna Lakelands. “Considering the scale and development time-frame, we are going to be Phuket-centric in our property development business,” he adds.

Tags: