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Banyan Tree to sell hotel suites

SINGAPORE is expected to show strong demand when Banyan Tree Residences holds a launch here this weekend for its branded hotel residences.

Banyan Tree Residences – one of the business segments of mainboard-listed Banyan Tree Holdings – offers the sale of hotel villas or suites to investors under a leaseback scheme.

Investors can choose to receive a fixed return of 6 per cent of the purchase price for six years or one-third of the net room revenue for the same period of time. After six years, investors have the option to renew their decision.

Owners will also be entitled to 60 days of use of their residence a year as well as discounts and privileges at Banyan Tree, Angsana and Colours of Angsana resorts.

Depending on which returns option the investor picks, the 60 days may be subject to black-out periods.

Banyan Tree currently has residences in Phuket, Bangkok, the Seychelles, Lijiang and Bintan.

While Banyan Tree has been selling residences since 2002, the concept and brand of Banyan Tree Residences was only launched this year.

The Banyan Tree Phuket residences – which has seen the strongest demand – start at US$1.5 million, while Banyan Tree Bintan begins at a more affordable US$440,000.

The Banyan Tree Phuket currently has 16 of the 43 residences still available. Twenty have been sold, while seven have been reserved.

The majority of the customers for Banyan Tree Lijiang were mainland Chinese, said Richard Skene, assistant vice-president (property) for Banyan Tree Residences.

The recent launch in Hong Kong saw a lot of people reserving units. This would mean putting down a reservation deposit but investors still have a month to decide.

Hong Kong was the major market for Phuket, and as Singapore has similar characteristics and a thriving property market, he reckons that the response here will be good.

‘The feedback so far leads us to believe it will be successful. Singapore should be a close second to Hong Kong, and maybe one day take over,’ he said.

He also pointed out that demand is not likely to be drastically affected by changes in the property market as their target customers would probably be less sensitive to normal market circumstances. ‘We’re not selling mass market properties,’ he added.

For the third quarter of this year, Banyan Tree Residences contributed about $3.6 million to revenues, down from $9.1 million in the corresponding quarter last year.

Revenues for Banyan Tree Holdings for Q307 overall was $82.5 million.

However, the group said the drop in revenue for residences in Q307 was due to revenues that could not be recognised for units sold, as construction had yet to begin.

The launch for Banyan Tree Residences is being held today and tomorrow at The Fullerton Hotel.

 

Source: Business Times 17 Nov 07

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