Ho Kown Ping
This month, Luxury Expert Alex Shlaen sits down with Ho Kwon Ping, executive chairman of Banyan Tree Holdings, winner of the South East Asia Property Awards Personality of the Year Award 2011.{+++}
As an investor into resort property, I was delighted when the opportunity arose to sit down and chat with a man known for creating one of the region’s most successful hospitality brands. KP Ho has combine idealism with a pragmatic sense of realism. A clever strategy that drives the Banyan Tree Group’s growth and success. When we met, I began by asking him about brand identity, and he responded without hesitation.
“Banyan Tree is synonymous with being a “Sanctuary of the Senses” and this is effectively reinforced with the consistency and quality of our design, primarily in the areas of style and innovative use of space,” he said. “Customers also value the confidence that they are dealing with a transparent, credible and quality-oriented public listed company.”
This naturally led me to enquire who these Banyan Tree customers are, and what drives them to purchase the brand’s properties.
“Up to some 4 years ago, clients have been primarily Europeans and Russians,” he explained. “In the last 3 years, we are seeing more Asians in the mix. Our latest transaction is with someone from Mongolia. Asian buyers portray themselves as being hard-nosed and more analytical, motivated by investment returns and yields. However, underneath all that, one cannot overlook the emotional factor and the ‘feel good’ that comes with owning a Banyan Tree Residence and lifestyle.” So why not launch a properties in Singapore? I asked. “We might, “ he responded. “We will announce it when we do it. The 2008 Global Financial Crisis is bleeding to the current debt crisis in Europe, which has impacted the secondary home market. Right now, we are only launching pure residential property in Phuket and China and our properties in Lijiang and Phuket have been doing relatively well with sales, though slower, still steady. You will see us moving into different segments of the market, but right now it is the wrong cycle for us to go into Singapore.”
This prompted me to ask about the Singapore luxury market as a whole.
“My general sense is that Singapore has in recent years become a distinctive investment market for luxury buyers around the world,” said Ho. “You speak of Singapore in the same breath as you speak of London, Paris, Hong Kong. It is clearly on the radar for international investors and it is also a safe haven. You will see what happens in international destinations – two markets, one priced according to the domestic market and another the international market. You see that happening in Phuket. Why are high level luxury property prices not coming down in Phuket? It is because the market is driven by demand, by the same types of people who would buy homes in the Caribbean and Singapore. When you drop prices it doesn’t mean it you will get a lot more investment. At the same time, if the domestic market is not doing well, that high- end market could still be doing well. There are two market forces at play. For the high-end market in Singapore there is domestic and international demand. The market has come down because a lot of people buying the property are international investors.”
Given the continued challenging economic climate, I next enquired how Banyan Tree has managed to maintain momentum and continue to launch new projects across the region.
“The key has always been identifying the gap in the market,” said Ho. “Also in choosing what products to build and how to meaningfully differentiate our Residences from others. This takes a great deal of research, insight and discipline, which we employ as a Group.”
As an investor into Laguna Phuket, I was interested to know how far the Lang Co project in Vietnam is based on the same model.
“It took us nearly 20 years to establish Laguna Phuket,” he said. “With what we have learnt, Laguna LangCo will probably take only about 5 years before it is establishes itself as a destination. While Laguna Phuket attracted largely foreign buyers, we think that Laguna LangCo will appeal more to domestic buyers. There lies the main difference.”
Finally, I asked KP which is his personal favourite Banyan Tree property.
“My answer has always been The NEXT Banyan Tree property,” he said. “Although, of course, I admit that Banyan Tree Phuket has the greatest emotional resonance for me personally. It was where it all started, it has evolved and continues to set new standards. Phuket will clearly continue to be a very attractive destination for property. It has continued to win awards and the quality of the Laguna property has stood the test of time.”
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