Arch Capital’s Jonathan Umali reflects on the resilience of Thailand and shows off MontAzure

Headquartered in Hong Kong, 10-year old Arch Capital Management continues to be bullish on Thailand as well as other parts of Asia. Jonathan E Umali, director of asset management for Arch, chats about one of its latest projects, MontAzure near Kamala Beach in Thailand and why the Land of Smiles will always be a hotspot. 

What makes Thailand a good investment now, particularly with competitors like Cambodia and Vietnam to choose from?

Why are we investing there? It’s the same reason people should be investing in Thailand. We like it because it just keeps trending up. For us, private equity, we like it because if you look at the history of economic development in Thailand, despite the politics, it’s very resilient. It may cool down for a quarter or two but it always bounces back. The [current] government is continuing the multi-billion dollar infrastructure investments, which is good fro real estate. In four years the number of LRT stations in Bangkok will surpass the number of MTR stations in Hong Kong.

It’s the same in Phuket. The government is expanding the airport and the terminal capacity. Right now there are 15 direct flights per day to cities in China. The traffic will continue to grow. Phuket is almost a separate place from Thailand. It’s got a brand. The economy is resilient, unemployment is at 2%, there’s infrastructure, there’s wealth being generated. For us it’s a great market for investment. And for investors, interest rates are still low, the living standard is high, international schools have 2,000 spots. A lot of expats live there — it’s an hour from Singapore and two-and-a-half from Hong Kong. They’ve cleaned up the illegal stuff on the beaches. That’s all gone. Illegal restaurants are all gone. The rule of law is coming. They’ve allocated economic zones. It’s more organised.

What makes the MontAzure project so special?

Why is this so special? [Phuket] has plenty of beachfront hotels, but there’s nothing else there. You have to get in a car to get to a restaurant or anything else. The opportunity we had was with 73 hectares; sea level up to 160 metres. ‘Mont’ indicates mountains and ‘azure’ is a reference to the water. So there are attractions on the beach, there are hiking trails, biking trails, retail, spa areas, sports centres, retail. There’s a ‘party central’, and we’re bringing in an Ibiza beach club brand, which will be announced soon. It’s not quite downtown but if this were a sub-city then it would be. TwinPalms is managing the condominium and InterContinental is building a hotel. So it’s ideal if you want to be on your own in the hills, or if you’re bored you can come down to the bars, restaurants and shopping. If you’re a hotel guest and you like the mountains, you’re free to go up. It’s an integrated masterplanned resort community. That’s the advantage of this over many others.

And the properties?

There are villas that you walk up to across grass — because we have so much land. There are family rooms, kids’ rooms, guest rooms. Walking on grass makes you really feel like you’re in the mountains. On the condo side, they’re only three storeys and you’re steps away from the beach. The top units have a roof with a pool, middle units have balconies and ground floor units have a garden or pool. Condo prices start at THB10-12 million — HK$2.7 million. You can’t get a studio for that in Hong Kong. That’s for an 860 to 960 square foot one-bedroom. It’s very generous.

Who’s buying, and is there something at the high-end?

This is a surprise, it’s our fastest selling condo and Thai people, who don’t traditionally buy in Phuket because it’s too far away, are buying too. Almost 50% are Thai buyers. The villas start at about US$8 million, but we haven’t really launched those yet. We have a lot of land, so we have enough for everyone. There are a select few villas for UHNWIs.

Is there a rental pool?

Yes, there is, but owners don’t have to use it if they don’t want to. You can try a commitment for a year and then switch either way if you choose. About half of buyers are opting to rent it out right.

Thailand is arguably the world’s biggest holiday destination. How much more can it really take?

When you look at Phuket, all the beaches are on one side. In terms of beachfront property there’s not that much left. They’re not making more beaches. We saw it in the response to our beachfront property. So in terms of getting those prime locations … it’s not saturated yet but the prime locations are getting more difficult to find. And I think we have one of the best.