Pattaya developer sees quality projects on the rise

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An interview with Kobi Elbaz

Kobi Elbaz, CEO of the Tulip Group, is a highly respected and well known business man in Pattaya and as the high season approaches we took the opportunity to speak to him about his company’s current property portfolio and how he sees Pattaya developing in the future.

Q: You and your project partner Rony Fineman have just been presented with the Best Development award for The Cliff at the Thailand Property Awards, it’s a project that was started a few years ago, but it’s obviously one that you are very proud of?

A: Yes definitely, when Rony and I bought the land in Pratumnak with the aim of creating a high rise building, people were very surprised as they thought the area was very weak and that it was populated with low-rise buildings.

Tulip Group’s CEO shares his views on the Pattaya real estate scene and talks about success with the award-winning The Cliff condominium in his partner project with Nova Group. Tulip Group’s CEO shares his views on the Pattaya real estate scene and talks about success with the award-winning The Cliff condominium in his partner project with Nova Group.

But we found it was the right time to launch it; we designed it in three or four months and we decided to launch it during the economic crisis, it was a time when everybody stopped building, even my projects’ stopped including Centara Grand.  And apparently we satisfied a niche that was not previously available.  I remember that in the first week, we sold one hundred units because the demand for this type of project was very high and then it became a huge success.

After this many other companies realized the potential of this area and this has in turn changed the skyline of Phratumnak.

Q: The Cliff was also one of the first projects to offer much more in the way of communal areas and gardens?

A: That’s right, we have four and a half rai of land for the Cliff; at one point we considered having two buildings to maximize the land, but then we decided to make it more like a five star hotel environment, not just another condo.

I feel we deserved to win the property award as the Cliff has a magnificent swimming pool, a waterfall and massive landscape, I believe it will be a very fun place to live in and during the construction we improved a lot to satisfy the demand.

I would say that for me and Rony the real winner here is not us, but rather the buyer, because they trust us and they know we will complete it and I am very proud.

Q: So you see the accolade as a form of stamp of approval from the Thailand Property Awards, which then in fact rewards those who have invested?

A: Yes absolutely

Q: I would imagine this in turn helps to build on your pedigree?

A: For me I have a different perspective, people have their own ideas about what it the right thing for them, this project is massive with four hundred and twenty eight units with blue and white exterior with blue glass, and as the owner it was our decision to go with this design, but of course that may not be to everybody’s taste.

I can tell you we were very happy with the rapid pace of sales and it seems we satisfied what people wanted at that time.

Q: When will The Cliff be completed?

A: Now we are testing the swimming pool, finishing off the landscape, we invested six million baht of our own money to hide all the cables underground and we will be ready to transfer by the end of the year (2012).

Q: How do you feel when you see many of your competitors emulating what you started with the Cliff?

A: I take it as a very big compliment to me and to Rony.  To be fair to the other developers, they may have used some of our ideas, however I see that everybody is now using better materials, better designs  and this is all about competition.  With every project that is built – the next one will be better.

Project partners Kobi Elbaz, CEO of the Tulip Group (left) and Rony Fineman, President of the Nova Group (right) pose with their ‘Best Condo Eastern Seaboard’ award for The Cliff condominium at the Thailand Property Awards Gala presentation ceremony in Bangkok, October 2012. Project partners Kobi Elbaz, CEO of the Tulip Group (left) and Rony Fineman, President of the Nova Group (right) pose with their ‘Best Condo Eastern Seaboard’ award for The Cliff condominium at the Thailand Property Awards Gala presentation ceremony in Bangkok, October 2012.

The Amari Residence is our thirty-seven story building with half being serviced apartments and the rest is residential units and it’s an amazing project.  If you look at the design and the finishes and facilities you will see that it is even better than the Cliff because it came later.

Q: Is this because of the changing needs of the customer?

A: Everything is for the benefit of the customer and the competition in the city is something I see as very healthy.  To give you an example, if you ask me if I would welcome competition near the Centara Grand in Jomtien, the answer would be definitely yes, because if someone makes a project that is similar to mine, it actually helps me anyway.

The distinctive blue and white exterior of The Cliff on Pratumnak Hill. The distinctive blue and white exterior of The Cliff on Pratumnak Hill.

You cannot be the only developer in Pattaya, there are many great developers including Matrix, Heights Holdings and Sansiri – to name but a few, and I think they are all doing a good job.

We don’t want to make something that is cheap, we all want to create better and better projects and if you follow the projects of Tulip you will see how high our standards are and how they are better than others.

Q: Has the demographic changed vastly in the last few years in terms of the nationality of your buyers?

A: Yes, in my project I now have many Thai’s buying from me, this is aided because Centara and Tulip and Amari together with Nova are Thai brands and Thai people have rediscovered Pattaya after the flooding last year.  Previously they didn’t really want to look at Pattaya, but during the flooding they discovered a new city.  With the best hotels, amazing shopping centres and the infrastructure is also improving.  We also have islands that are only thirty minutes from here; you don’t have to go to Phuket to see clear blue waters.

The Cliff project features a huge swimming pool, waterfall and outdoor landscaping. The Cliff project features a huge swimming pool, waterfall and outdoor landscaping.

The new international airport helped put Pattaya on the map a few years ago, whereby before the Russian tourists used to fly on to Phuket and Samui, we now find that they come to Pattaya.  We are also seeing a rise in the amount of Chinese & Indian visitors and we are starting to see the Americans and Europeans returning.

Q: What is your main focus now for the upcoming high season?

A: We own a fair amount of land in this city; in 2012 we announced the Golden Tulip hotel and condominium with eight hundred and twenty two units, two hundred and twenty hotel rooms with a three thousand square meter swimming pool in the heart of the city.

So far without any advertising and drawings we have sold almost three hundred units and this is because it is a prime area.  It’s the first time in my life I have paid five hundred million baht for the land, which four years ago would have only been one hundred million baht.  So yes, we see the demographic changing and that the people want to be closer to the city center.

I will not be launching another project in the near future as there are many projects in Pattaya under construction at present.  And I will keep a keen eye on how we do after the high season, if we get millions of visitors, we will launch, if not, we will wait.

Q: Apparently they are approximately thirty nine thousand units available at the moment?

A: That’s right and I think there will be a further ten thousand launched in the coming months.  As a policy we are only interested in projects in prime areas.  I can’t see how our company can have any negative effects by our projects such as Centara Grand, Waterfront, Centara Avenue, Amari, Golden Tulip.  But it’s still a lot of units and to sell a project is very difficult and to build it is even more difficult.

Q: It seems there are many challenges to building a project, how do you deal with that?

A: It’s part of doing business in any country: when I was looking for construction companies for the Cliff, I had a hundred companies tending for the business.  It requires a lot of manpower and labor and the game changed.

After the flooding, getting good labor was very hard and expensive as so many infrastructures had to be fixed after the flooding.  The government is always improving the infrastructure and there simply isn’t enough manpower.

Q: So the land prices and the labor prices have increased significantly.

A: Definitely, first of all because of the minimum wage and the skilled workers expect more and it’s very understandable.  So the construction companies can choose who they want to work with.

It’s good for the economy, but in the long term the unit prices have to be adjusted accordingly.

Q: But these are factors that apply to all the developers?

A: Yes that’s right, the price per square meter compared to two years ago is significantly higher and this also applies to landscape construction.  On top of this the processes of EIA are slowing down many projects.

There is no bad developer in the city and in the past few years the quality of projects is improving vastly, we are all facing the same challenges but as the city continues to thrive, hopefully so will we.

(NB: Interview conducted by Paul Strachan).