Growing a real estate success with Grove Gardens

For those keen on property in Southeast Asia, it is probably hard to find a developer originating from Scandinavia with more experience than Swedish Lars Ydmark of Tri-Asia, a Phuket-based management company within the hospitality business and more recently a developer on the real estate market.
Well-known among Scandinavians for Jiva Resort and Spa, 2006 has also seen the finalization of Tri-Asia’s first real estate, Grove Gardens, on Phuket’s east coast. Nearly all units were sold by then on this housing estate which puts the individual in the centre.
“The minimalist design allows the individual to design their own home with the flair they want, without any extra cost and having to change the existing plan. You can compare it with a hotel in that everything looks the same. However the interior will be individual. We don’t force them anything complicated that they might like or not like, so they have the possibility of continuing to develop by them selves,” Lars, who did not become a developer over night, explains.
Having opened twelve hotels up to now for the likes of Sheraton, Shangri-La, Accor, and for himself, Lars knows the process in and out from inception to completion.
Having started out in the Asia-Pasific region on Fiji in 1990, he established the Thailand-based firm with this Thai wife in 1999, after a few worthwhile years working for Novotel and Amanpuri respectively.
“If not for the first years employed as a GM and the knowledge I gained from opening three hotels in Thailand, then I would not have been just as successful today. That was a very good entrance to start running one’s own business,” says Lars with appreciation.
Also, this was a very fruitful period within tourism as the Asian financial crisis made Southeast Asia a real bargain for visitors.
“During my three years with Accor we had nothing less than 90 per cent occupancy and could increase the prices every year.”
Tri-Asia initially took care of some hotel management contracts in Southern Thailand before embarking on the challenge of building their own hotel Jiva, a business venture that came to be both very trying and another essential learning experience. As Jiva opened in 2002, the invasion of Iraq, the Bali bombing, and all the rest of it, followed with the tsunami on top of everything.
But since 2005 business caught up significantly, while the property sector really never saw any downward trend at all.
Lars brought along the constructor of his own house and the subcontractors from Jiva to Grove Gardens. It is difficult to find people and good subcontractors, especially when you are a small business.
“There are many accepting large projects without having the organization enabling them to deliver. So they have breakdowns and go bankrupt,” says Lars who has learned the hard way.
“One must have the knowledge and vision. And this is difficult to learn other than by experience.”
“The biggest problem is the sub-contractors finances,” says Lars who has been forced to sack quite a few of them. “You must have maximum control on the ongoing budget so that you are not paying your subcontractor too much. “
Otherwise often they do not have any money left to finish the work which can cause the whole project to stagnate. Subcontractors are smart and are trying all the time to milk developers on money.
And if a problem occurs? “One must replace then. It is very important that you see the problem when it comes in front of you. It won’t get any better in the long run, so one must cancel the collaboration.”
With Grove Gardens Lars is going from being strictly hotelier to a new concept of cleverly combining housing estates with holiday rental services and hotel integration.
“I see the optimal business module as a small hotel with 20 – 30 apartments as hotel rooms.”
In here there is a strong niche market of private property investors looking for a return of the investment to cater to.
“We will run it as a hotel with restaurant, club house and bar etc so owners can rent their properties, so it is not far-fetched for Tri-Asia entering into this.”
Part of their development Jiva was recently sold: “The reason was a financially advantageous decision between all shareholders. The buyer [Central Resorts] was serious and we felt we could transfer the business as they would take well care of the staff and the market we had developed around Jiva,” says Lars.
Upon completing Grove Gardens their first residential project was already a double success: Nearly sold out even though they had the resources to build first and sell thereafter, and with rental enquiries up until August 2007.
Asked about the recipe for success, Lars replies that he is asking himself the same question. “What people are thinking increasingly concerned about is the life after completion,” believes Lars, referring to various services and facilities. “For most developments you buy a home based on the drawings.”
His homes are designed with foreigners in mind, with buyers so far from the U.S, South Africa, Australia, Sweden, England and Hong Kong.
For certain, today’s discerning high-end market on Phuket will settle for nothing but the best and an estate developer like Tri-Asia needs to be entirely quality-minded in order to stay in business.
Now there are three more projects in the pipeline where the developer will pursue with its concept, located on the hill overlooking Patong beach, behind Amari, and on Nai Yang beach, a pristine area north of Pearl Village.
“Owners will have access to the hotel business and we, having the management of a hotel as the nucleus, can spin on with the apartments around it.”
With the business focus well-thought out, on a market where the currently strong demand cannot be pleased fast enough, the future looks bright on an island increasingly being adopted as the home for discerning buyers from Europe and the U.S.
Phuket has also only just started developing its marine tourism where Lars finds the growth potential to be enormous and another excellent selling point for property.
“I mean, the archipelago here from Burma banks down to Langkawi is absolutely fantastic, with excellent waters. We are only seeing the tip of an iceberg on this market.”
“I don’t think I will see the end of the expansion during my lifetime. It will continue. It will stagnate and perhaps another type of expansion not directly to sun and sea but more towards permanent living, like what we are doing now.”

About Joakim Persson

Freelance business and lifestyle photojournalist

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