Tree of Lifestyle

Luxury resort operator Banyan Tree’s residential branches head in new directions

Toying with hotel accommodation isn’t often on anyone’s “must-do” list. The sight of a Best Western or Holiday Inn if you’re in, say, Kigali can be a soothing balm. We’d all like to stay at the Four Season every time, but in odd spots the recognisable name makes unseemly surprises unlikely.

It’s much the same with investments. The resort investment is a popular one these days, and like that stay in Kigali, the familiar face is a good place to start. You know at least a little about what you’re getting into.

Banyan Tree is one of those recognisable brands. The hotel and resort operator is bolstering its investment and residential properties, and if the recent sales tour is any indication, investors are feeling comfortable with the label. Banyan Tree has some aggressive expansion planned for the next three years, with new properties set for China (Tianjin, Shanghai, Chengdu and Huganshan as a few), India, Portugal, Morocco, Greece and Montenegro. Among the latest to be showcased from the Asian region are fresh investments in Phuket, Bangkok, Bintan and, perhaps the highlight, Lijiang, in Yunnan Province.

“All of our resorts are different. It’s not cookiecutter. Obviously I’m not going to slam any of the other brands but often you go from Hawaii to Guam and you find the exact same room,” theorises Dan Simmons, Banyan Tree’s residential director of the chain’s continuing — maybe growing — popularity. “We do have a style and theme, but [we] take the local culture from the area and blend it in together with the property. Every site is unique. It keeps it interesting. It keeps it fun.”

With the exception of Lijiang, the recent clutch of properties to become available are located in perennial hot spots: Banyan Tree Residences Bangkok sits in the city centre with the company’s hotel and the Bintan Residences are tucked away overlooking the South China Sea on the heavily promoted island near Singapore. But from the outside looking in, Phuket looks most in danger of saturating itself with five-star resorts. The lushly situated, ultra-spacious Banyan Tree Phuket Residences face Bang Tao Beach and is a stone’s throw from Laguna Phuket (the location of Banyan Tree’s flagship), one of the region’s most comprehensive and sprawling developments. Why is anyone still interested in it?

“We were one of founders of the resort area in Phuket. But the island is still actually 80 percent greenery. You can’t build up on the mountains, you have to be set back from the beaches and you can’t build more beaches … like in Dubai,” Simmons laughs, as he explains Phuket’s appeal. “It’s the Hawaii of Asia. There are very few places in the world you can fly in internationally, and within minutes be on a natural reserve, with beachfront and looking at crystal clear blue water. It’s clean, there’s all the medical tourism, shopping, infrastructure. It’s got a lot to offer and the dynamics make it a place to live and not just a vacation spot.”

Fair enough, but Banyan Tree certainly isn’t putting all its stock in one island, and it is getting creative with its locations. Simmons recalls a recent trip he made to Lijiang, stopping at a tiny teashop to enjoy the local ambience. His hostess whipped out her translation phone app and asked him “Are you from Hollywood?” before taking him through a tea ceremony. A unique vibe to say the least. “Lijiang has this gorgeous mountain and all the villas face it. It’s gorgeous. Picturesque. And very close by is a UNESCO site … It’s a way to de-stress. For people that do have high-pressure jobs, it’s so relaxing. Some of the roads are cobblestone. It truly feels like you’re a hundred years back,” Simmons states.

Since the hotel investments went on sale via a property showcase in March they’ve nearly sold out; interest in the Naxi architecture set within the historic town turned out to be exceedingly high. That said Simmons fully expects Banyan Tree will proceed with plans for residential units in the near future.

And that’s a bit of a change. The majority of Banyan Tree’s investment properties are within a resort that goes into hotel stock, but Banyan Tree is increasingly moving into solely owned residences, a result of shifting property regulations and straight ahead demand. A mix of apartments, duplexes, stand-alone houses and complete townships will crop up down the road in locations like Vietnam. Expected to launch in early 2012, the Banyan Tree Lang Co (near Hue) and an Angsana spa hotel, along with an 18-hole golf course designed by Nick Faldo (“Which I won’t play,” Simmons cracks) are currently under construction.

For investors, Banyan Tree offers either a 6 percent fixed return for six years or a share of room revenue, 60 transferable complimentary days each year, membership in the Residence Club, which provides owners with a host of privileges at other Banyan Tree hotels around the world, and perhaps most crucially, an exit strategy. Simmons admits that Vietnam and China are key markets for Banyan Tree right now, but increasingly affluent Asian buyers are not the only investors. Overseas purchases that see incredible value for money—Hongkongers, Singaporeans, and Canadians and Australians with superstrong currencies at the moment — are also snapping up properties. Capital appreciation and returns are factors but, “[Investors] get the lifestyle. They get the guaranteed return, the branded residence and our management. No worries … And we do start off pretty inexpensively, about US$300,000.” So you don’t have to be Warren Buffett to get one? “Exactly,” Simmons exclaims. “I have one.” Stay tuned.