With property transactions in the broader market flat and forecast to remain so into the foreseeable future,
one of the emerging trends we are seeing is the conversion of pure residential projects into alternative
investment vehicles. Condominium and apartment projects are branding and looking to sell under an
ongoing yield or lifestyle strategy. Now developers are introducing fractional (or shared) ownership schemes
with lower pricing points to entice buyers off the fence.
Timeshare or vacation ownership has been selling on the island for most of this decade at Laguna Holiday
Club, Royal Resort and Marriott Vacation Club. More recent entrants are Absolute, David Lloyd and a
handful of other developers operating independently. Thai law is well equipped to deal with these
operations. Even omnibus legislation such as the Consumer Protection Act covers relevant conditions such
as cooling off periods and complaint administration.
With the downturn in tourism the next new wave of fractional products look to be hotel residences, with the
Royal Phuket Yacht Club – now owned by the Purnavarna Group – selling residences at increments of
1/18th share in a unit. The LaTour Signature Group, which recently took over Indochine Villa Santi,
operates this way extensively in North America and is eying further expansion of these products.
Fractional ownership in most developed countries can be divided into two distinct categories. In the first,
the buyer purchases a portion of a deeded property and receives a title or deed. The transaction is therefore
regulated under property law. In the second, the buyer purchases a specific time usage of a property and no
title is provided.
Most timeshares fall into the latter category, with regulatory laws falling under consumer and civil
administration. With holiday club or points-based systems, which are becoming more popular, you can
transfer your usage into other vehicles such as airline tickets, rental cars and cruises.
What is being marketed in Phuket by many as deeded co-ownership falls into a very gray area and is hard to
regulate under prevailing property law. In the West most timeshare uses undivided interest, condominium,
co-op or trust vehicles as entities. One of the most interesting developments in timeshare recently has been
a considerable amount of litigation