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Work remotely from Phuket at $850 a month? S’pore start-up offers digital nomads furnished spaces

Singapore-based Homa completed the 506-unit building in Phuket town at the end of 2021, during the height of Covid-19. PHOTO: HOMA

SINGAPORE – Entrepreneur Robert Biter looks to have solved the work/life balance when he moved to the resort island of Phuket to take on the life of a digital nomad.

Dr Biter, the founder and chief executive of Dando A Luz Birthing Centers, rents a fully-furnished rental studio apartment in Phuket town for the princely sum of $850 a month.

That buys him facilities such as co-working space, a rooftop pool, a gym and a restaurant with a weekly cleaning service.

“The amenities are beyond anything I have experienced during my three years in Thailand,” said Dr Biter, a 52-year-old American doctor who is bringing the first natural birthing centre to Phuket with the hope of replicating it across Asean.

“The energy is a mix of fun and opportunity to get work done before a nice dinner and swim in an amazing rooftop pool.”

No one will need reminding that rent for a similar sized condo-unit in Singapore would cost at least double and there is no beach resort in sight.

Singapore-based Homa completed the 506-unit building in Phuket town at the end of 2021, during the height of the Covid-19 pandemic.

Unsurprisingly, the apartments attracted steady demand from around the region, particularly professionals who worked remotely.

Homa founder and managing director Blake Olafson, who has lived in Asia since 1992, said the pandemic had helped create this demand.

However, the trend of renting apartments had already been a growing in core Asian cities, such as Singapore and Hong Kong, as young professionals were being gradually priced out of the housing market.

“What Homa provides is neither fancy nor high end,” he said, but noted that privacy was a key selling point: “We offer community living without the inconvenience of co-living.”

The self-contained units are about 350 sq ft, the size of a one-bedroom apartment. They come with everyday conveniences, while housekeeping spruces up and the unit with fresh towels and sheets weekly.

Occupancy has averaged above 90 per cent over the past six months, with tenants consisting of 40 nationalities. Most are young couples, along with more than 80 children. The tenants are also allowed to have pets – all 150 of them – which are not usually welcomed in Thai apartments.

The firm has had to double its co-working space – initially comprising 75 seats – because of high demand.

“We will need to double that number again at our new project to cater to tenants who are from a vastly different profile and demographic,” said Mr Olafson.

Corporate leases make up only about 20 per cent of Homa’s Phuket apartment, while this is close to 80 per cent at its newer one in Si Racha, about 30km north of party town Pattaya.

This is because the 100-unit building, which opened in April, primarily caters to Japanese professionals working in the large foreign-owned industrial estates and factories close by.

Mr Olafson said Homa also works in tandem with local companies, which helps determine the level of demand from corporate leasing.

He cited the upcoming development in Cherngtalay that is being built to cater to a large pool of higher paid hospitality workers in the immediate area. The 423-unit block, about 19km northwest of Phuket Town and near BangTao beach, will be ready this year.

Separately, a 125-unit apartment building is being built at Chalong Bay, about 7km south-west of Phuket town and on the island’s west coast. It will be ready in two to three years, along with another two new projects in Bangkok that will begin construction this year.

Ultimately, Homa aims to grow its portfolio to around six or seven apartment buildings over the next 24 months, in Bangkok and along Thailand’s eastern seaboard. That is where Homa sees the greatest opportunities because of the government’s focus on creating jobs there.

A key reason why Homa has been able to expand this quickly is because of Mr Olafson’s other role as managing partner at global real estate private equity firm Acre Management, which he co-founded in 2012 with two partners.

“We already have a tried and tested template at Acre, the only difference is that Homa’s will be localised,” Mr Olafson quipped.

Acre’s investment focus is on creating institutional-quality rental-housing assets in the United States, unlike in South-east Asia where the concept is still fairly new.

However, such assets have been around for more than half a century in the US, Europe and even in Japan, where they are widely sought after for their stable returns.

This stability stems from a lack of supply of alternative rental housing in the mid- to lower-price band, while an astute pricing structure also plays a significant role.

Rates for a short-term stay in the Phuket apartment block are similar to hotel prices, whereas leases of a year and beyond are priced at 20,000 baht (S$850) a month. “This helps to keep cashflows predictable,” said Mr Olafson.

The third part of the equation is the company’s strategy of encouraging social cohesion. “When tenants become friends, the building transforms into a home, creating resilience and stickiness, which in turn, improves the return on investment,” he said.

From Acre’s experience in the US, the return on investment averages around 17 to 18 per cent and Mr Olafson expects Homa’s growing property portfolio to do the same.

Even at this early stage, Homa has gained sufficient backing from investors drawn by the returns. This has allowed it to fully fund the portfolio’s construction cost amounting to around US$110 million (S$149 million), with more than half in equity and the remainder in borrowings.

Some of the backers include US insurer Starr, institutional players and sovereign wealth funds from around the region, as well as family offices from Hong Kong and Singapore.

Mr Olafson said the business is highly scalable and Homa is in discussions to develop similar projects in countries such as Indonesia and the Philippines.

“We aim to expand into markets where the economy is doing better, and where government policies are favourable to foreign investors and owners of long-term rental housing,” he added, noting that the end goal was to either contribute the entire portfolio to a real estate investment trust (or REIT) or eventually sell it to institutional investors.