A Nordic Garden in the Thai Tropics

The property boom in Thailand is not going unnoticed; especially the Scandinavian one. The interest among Northerners to escape the cold winter periods and reside here is growing substantially. It is not far-fetched to claim the winter high season 2005/2006 will see the dawn of a new era with Thailand as the ‘new Spain’ as many projects targeting such customers have been initiated and some are also getting ready for moving in. The recent ‘Bo Utomlands’ (Live Abroad) expo in Sweden also substantiates this.
            All sorts of residential projects are springing up like mushrooms from the ground, on idyllic locations, offering modern comfortable living and all one can ask for from life in tropical Thailand – on sight or nearby. The sky is the limit and it seems there is an insatiable demand to quench for any business offering customized homes to foreigners.
           One explanation for the upsurge could be that a critical mass of people has visited the country by now, many of them several times, seen its advantages and been touched by the hand of Thailand. Also, the times are changing and Spain’s palmy days are perhaps over. Or, at least the fairly cold southern European country’s lustre is fading somewhat in comparison. Fierce competition should be expected from the cheaper Southeast-Asian country.
            One project part of the boom and interesting to take a closer look at, is the Nordic Group with Nordic Garden Hotel and various apartment buildings and bungalow villages for sale or rent on Jomtien beach, below Buddha Hill, Pattaya. It is one of the first to target Scandinavians and as such one helping to boost this new trend. Secondly it came about by coincidence.
            It all started with a modest hotel investment for two Norwegians a few years back. Now they have successfully sold around 150 residential units, mostly to Norwegians and Swedes.
            Five years ago when time was ripe to start scaling down on his business engagements back in Norway, running a large property in Thailand was probably the last thing he could foresee doing as a retired person.
            But here he is, in Thailand, and during the quietest months of the year within tourism, busier than ever before in his working life. Construction is going on for the Nordic Terrace to stand ready in December 2005.
            Born on a very special day, 17 of May 1945, he was given then name Karl Fred Kristensen, nicknamed Kalle.
            He had received a phone call a few years back while visiting his children who were studying in Australia. His partner Thor Olaf Hegna, 38, had called him from Thailand about a small hotel that was for sale cheap that he thought Kalle ought to come and check.
            They decided to buy the Nordic Garden Hotel with no other plan that it could be useful for future holidays. His friend since childhood and business partner Thor Olaf, though, had a background in hotels and restaurants and wanted to run it.
            ”Thor Olaf looked around and found that the development was booming in the Pattaya-region. He came up with the idea to build the first area, Village 1. We bought it three years ago, 4 million Baht for 1 rai,” says Kalle (his partner away on a trip to Norway).
            On that land piece they built six bungalows and sold them within 14 days to guests on their hotel.
            “It just happened, they liked the concept,” says Kalle who wants to be clear on the point that Nordic Group does not only sell property. “If you go to a real estate company in Thailand they are very helpful until you sign the contract and then you are not interesting anymore. For us the customers are just as interesting after they have signed the purchase contract as before. That is when we are going to do business here.”
            The easiness with which they could sell led them to buy more land and develop another four villages, Nordic Terrace and Nordic Residence as well as Nordic Hill Resort. The selling has gone beyond all their expectations.
            You are clearly part of a strong interest in long stay in Thailand? “Yes, but we didn’t think about that when we started at all. Just start slowly and see what happens and then thinking: ‘Maybe we should build something’. We have developed what we have done so far ‘cause we see that there’s a boom coming here. 4-5 people living in Spain have sold what they had and come here instead.”
            The impression one gets of Kalle is a very friendly, casual man while at the same time a feet-on-the-ground businessman. It is a laidback lifestyle he has adopted compared to when he used to be a salesman in Europe and a subcontractor to Scania and Volvo, among others. It does not exactly look like he is uncomfortable in his new venture. In Thailand he wears shorts and can still do some great business. In May he celebrated his 60th birthday.
            “We show our buyers that we take good care of them and deliver what we promise,” continues Kalle. The Nordic Group sells 3 things: property, security and returns. Owners looking for return on investment can let the hotel have the use of their homes.
            “When the owners are not here we let out their bungalows and apartments as part of the hotel. We guarantee them that their property will not cost them any money. All those who have bought from us up until now are very pleased with the incomes. The best ones that were let out, received up to 300 000 Baht in profit from one high season.”
            For the readers it should be pointed out that this account has not scrutinized the Nordic Group and makes no claims of giving accurate facts.
            As says Kalle: “You must find out for yourself and that is what we have done. Building our own house was our trial, where we had lots of special requests and many problems with the building constructor. We were not pleased.”
            Trust is of paramount importance for the Nordic Group and Kalle gives a couple of examples when they have taken back already sold units from buyers who were not fully pleased and refunded them for all their expenses.
            “Reliance between the buyer and the seller, especially in Thailand, has to be 100 per cent,” Kalle tells his customers. Anyone interested in the project is welcome to pick any of the buyers as a reference. So far those who invested have acted as splendid ambassadors for spreading a good reputation.
            This is probably one of the reasons Thor Olaf and him are selling so well – 90 per cent, they claim, already before starting any construction, and without any glossy presentation folders.
            “We are not running after the customers, they are coming to us. Nobody shall feel that are pushed to buy; if they want information, we give them, if they don’t ask we don’t give them.”
            The personal touch with everything is also much appreciated; the way they treat their staff with higher than normal salaries and trips to Norway for five Thai employees every year, according to Kalle.
            “Our speciality is running the place as a big family so the guests and residents feel involved. We have our own activities in the hotel, cultural events nights with the employees and the guests; our own excursions, for home stay at fish and fruit farms; our own travel agency; transport etc. – a take-care-of concept that others don’t have.”
            And everyone likes the area; quiet, safe and close to the beach. Being neighbours with two of the royal princesses has also proven to be an advantage giving extra security and restrictions on any development.
            The Norwegian developers want their concept to be a family place for grown-ups. “The target group is people from 45 years and up, but all are welcome of course. These people, when they go on holiday the wish for something else than sitting in the bars in Pattaya. They are interested in culture and experiences,” Kalle explains.
            Is there no problem being associated with Pattaya? “No, actually not, I see what you mean. We are fully aware of that the name has a negative aspect. But you can see that back earlier, in Sweden and Norway, when you said you were going on a trip to say Amsterdam, they said: ‘Oh, you’re going to the Red Light district.’”
            Most of their buyers, he adds, are people nearing pension age and they attract their friends, children and grandchildren.
            What they are not hoping for is any ‘Norwegian ghetto’: “We want all kinds of people from various countries. Then we will be more happy and our guests too,” says Kalle.
            Regarding buying property in Thailand, most people are willing to endorse that it is fairly straightforward, and any obstacles can be overcome to reach the possibility of residing where one can get a slice of paradise.
            The most common variant used, also by this development, is that a Thai company owns the land and the buyers lease the apartments or bungalows.
            “We recommend our buyers a leasing contract of 90 years, 30 by 30. And by registering it on the land office the contract is safe for the buyer. In our opinion and according to our lawyer this is probably the safest way to have property in Thailand at the moment.”
            “If you leased an apartment and we went bankrupt or the bank took over this business, you would be sitting with your leasing contract that would still be valid because it’s registered at the authorities,” claims Kalle.
            Also, the authorities do not mind that Thor Olaf and Kalle have arranged for security, “full control”, as minority owners in their Thai company.
            A leaseholder can transfer the lease contract for example to her child and that would mean the start of a new lease contract period of 90 years.
            For those who want to own their property, buying it through a company is an option. Kalle, though, do not recommend this. “If you own your part of a company, then I ask myself: ‘If that company goes bankrupt, and you are sitting with part-ownership in it, what will then happen then?’”
            This has happened, where all owners had to put in more money to avoid the company going bankrupt, he points out.
            Regarding the design of the properties, they have aimed for sophisticated living on par with the highest European standards – a challenge in terms of finding the constructor capable of such a task.
            They did find the right one who has also managed to be ready with each phase before deadline up to now; an achievement indeed in Thailand.
            It was more difficult to convince this constructor of the “innovative” designs they themselves came up with.
            “I went around Pattaya and looked at all the buildings and this is the way they build all over Thailand [he draws a square box on a piece of paper].” In that way you get more out of the land cost which is the big part of the cost here.
            “I had the idea that I wanted to do a terrace building. The constructor just laughed and thought we were nuts and said we have to build BIG. And now he can see that we are doing the right thing, because our concept is what is successful. Not too big houses and a combination of small villages and buildings. We are selling so well, and fast, thanks to the special buildings,” says Kalle.
            “Our idea is to have small villages. And the constructor said: ‘You have to build big; you have to have 40-50 houses! This is stupid.’ And we replied: ‘Everyone is building big and they have big problems afterwards with many things.’
            Nordic Groups plans on avoiding trouble with for example security problems with their small communities. “In a big village you don’t care what is going on around the corner. Also, you get problems with maintenance etc. it’s very nice the first year, but after that no longer.”
            Actually, they are probably big enough by now. Says Kalle: “Nothing grows into the sky. I think we are stopping to develop any more now, after finishing the terrace building and the Residence. Why? We cannot continue to say to all our buyers that we can take care of them because at a certain point of time it will become too big.”