Given the economic and financial markets landscape worldwide, buying a villa in Bali is almost certainly the last thing on most peopleÆs minds. But the world doesnÆt stop turning because of the turmoil on Wall Street. So Richard McCandless, co-owner of mc2 Tropical Property, goes about his business of selling the companyÆs latest upscale villa development.

mc2Æs latest project is the $70 million, four-hectare Outrigger Panorama Bali Resort & Spa. This resort development was launched in June 2007 and groundbreaking took place in July this year. It is scheduled to be completed by the first quarter of 2010 and will be managed by US-based hotel and resort operator Outrigger Enterprises.

Outrigger Panorama Bali Resort & Spa is located at the Bukit southern peninsula in Bali, home to the upscale resorts of Four Seasons, Banyan Tree, and Bulgari (which is the mc2 propertyÆs next door neighbour). So far, mc2 has sold 121 units out of the total 176.

Hong Kong-based AAA Venture Fund of the Asset Allocation Advisors Group is among the resort developmentÆs key investors, taking up 54 units or close to 30% of the total. mc2 itself û which is co-owned by McCandless and Grant McArthur û and Outrigger have taken up some of the units. The rest have been bought by affluent investors from Asia (particularly in Hong Kong, Japan and Singapore) and Europe.

Investing in this mc2 property gives an investor a luxury apartment-style villa at his or her disposal for 28 days per year and a share of the resortÆs financial performance. The property will have apartment-style villas ranging from 54 to 221 square meters in size and $265,000 to $1.2 million in price tag. Out of the 176 villas, 136 will have individual pools ranging from 6.4 to 9.4 meters in size by the terrace. Space, privacy, and service are what the resort hopes to offer.

The search for real assets amid the current market turmoil may actually work to mc2Æs advantage.

Prospective buyers ôeasily fall in love with the resort and the plans for the individual villasö, but once the romance of owning a villa fades, the mathematics of the investment takes over, says McCandless.

ôThe market now is such that money is tight and people tend to make more thoughtful decisions,ö he says. ôBut Asia still has an enormous amount of people who have the financial wherewithal to buy this product.ö

According to the latest World Wealth Report released by Merrill Lynch and consulting firm Capgemini, the population of high-net-worth individuals in the Asia-Pacific rose 8.7% to 2.8 million last year and they had a combined wealth of $9.5 trillion.

As is the case with any property development, buying a unit at mc2Æs latest resort at around $2,600 per square meter is a discount compared with the prevailing market price of a similar but completed unit in other developments, which tend to go for around $4,000 per square meter at the moment.

The risk involved, however, includes failure to compete the project or lack of occupancy once the project is completed. For that, mc2 offers investors a guaranteed 6% net return for the first two years (thereÆs a clause that excludes extraordinary circumstances such as disasters or other events that are beyond mc2Æs control). Beyond that two-year period, investors will get a proportional share of generated income of the resort regardless of the occupancy rate of their unit. In addition, mc2 offers a buy-back guarantee upon completion û if you donÆt like what you see upon completion, the company will buy-back your unit.

After doing his pencil-pushing, McCandless is confident that the resort will prove to be profitable from its third year of operation and onwards to the point that he has underwritten the 6% guarantee himself.

This is, after all, the seventh resort that mc2 has developed, he says. This is the companyÆs biggest and most ambitious project to date, however.

McCandless was not always a property developer. He was previously based in Hong Kong as a regional director at advertising firm Foote, Cone, and Belding. Prior to that, he was based in London as group CEO of Publicis Financial. In 2000, he intended to retire and sail around the world, an endeavour that was cut short when he found a business opportunity in Bali and set up mc2 eight years ago.

ôWe bring to this project everything we have learned from our previous developments,ö McCandless says.

ThatÆs why Outrigger is a prominent part of this development. McCandless says that a resort development of this proportion is best left under the management of seasoned professionals. Outrigger is operating and developing 47 properties with a combined 12,000 rooms in Hawaii, Australia, Guam, Fiji, Palau, Bali and Phuket.

mc2Æs other properties in Bali include Kupu Kupu Barong, Jempinis Villas, Cahaya Mentari, Alu Bali, and Sesari Bali. The company, which is headquartered in Bali, is planning to launch new development projects on the Thai islands of Phuket and Koh Samui by December this year. Earlier this month, it opened a regional sales office in Singapore.