A Development of Resort Condominium Project by Sale and Leaseback Method for Long Lease in Phuket Province Case Study of Saturdays Residence and Cassia Phuket

Abstract

          The sale and leaseback resort condominiums has been popular with developers and investors. This strategy involves the developer to sell condominium units to the buyer then signs the lease agreement with the unit owner to return sold units for long lease accommodation and pay a rental return to the owner. The objectives of this research were to study concepts, development processes and management for the sale and leaseback resort condominiums. Including analyses problems occurring in development by selecting two case studies in Phuket which are The Saturdays Residence managed by the developer himself, and Cassia Phuket developed and managed in collaboration with Banyan Tree hotel chain. This was achieved by gathering information from developer’s interviews, field surveys and collecting reviews from the long lease guests on tourism website. Data analysis was used to compare similarities and differences to summarize the key lessons in project development.
          The study found that: 1) The concept of both projects needs to develop a long-term lease accommodation that supports the middle-level customers. Saturdays wants to develop the new project from past weaknesses. While Cassia wants to expand markets that have never been developed before. 2) Each type of development and management has advantages and limitations: Saturdays developed and managed by the developer, ensures freedom of management but is less reputable and reliable than the hotel chain. While Cassia; the developer collaborated with the hotel chain to increase its reliability by following international standards and supports a wide customer base. However, the revenue also needs to be shared with the hotel chain. A Strong management system is needed to ensure co-operation between hotel staff. Both projects share a common policy to incorporate the care of long lease guest by using hotel management principles to provide buyers with rental return benefits. 3) Major problems faced in project development are; not believing in their products. Managing the accommodation when it reaches a high occupancy rate as they need to have sufficient income to pay a rental return to buyers. Lastly, the most common problem is to meet the Hotel service expectations of long lease guests.
           According to this research it has revealed that the sale and leaseback resort condominiums are both self-developed and in collaboration with hotel chains. The key is to manage the accommodation to ensure guest’s satisfaction meanwhile generating sufficient income to pay the contractual compensation to buyers. This study’s results will be beneficial for new entrepreneurs who are interested in developing projects, buying and those increase understanding about the sale and leaseback of resort condominiums.