‘King Of Clubs’ Talks Long Leases For Nana Tenants

Published on 14th May 2018 by Stickboy BKK

It has been almost three years since I scooped the first ever interview with Paul Hayward, King Of Clubs – the man behind Thailand’s largest entertainment and nightlife group that owns countless bars, clubs and restaurants across Bangkok and beyond.

Bangkok is the city of gossip and right now the jungle drums are in overdrive with numerous “stories” doing the rounds including several regarding The World’s Largest Adult Playground.

When I hear a rumour the first point of contact is the owner of the business and for Nana Plaza that means Paul. I had so many questions an interview seemed the logical answer and for the second time Stickboy pulls off another exclusive.

Long Leases For Nana Tenants Signed Off

Here we are again Paul, what can I say other than thanks for taking the time to answer a few questions.

In our last interview I asked you about Nana Plaza leases and you quashed the rumour that no tenant could get an extension. Right now there’s a lot of speculation flying about as renewals are due in the summer. What’s going on there and what can bar owners expect?

It’s true this summer leases are entering their final 3-year term in July.

After long talks with Axel and Supachai, Micky and I met with Fico and discussed our plans for the future of Nana Plaza.

We met with our partners at Fico and after a very short board meeting it was decided to give Nana Plaza tenants an additional 9 years on top of the next three, Fico have been world class, To be given this much trust and freedom by a billion-dollar company is rare in this day and age.

Our goal is, and always will be, to make Nana Plaza the number one party zone in Bangkok and to do that the tenants need have the tools to make that happen.

Wow so 12 year leases? I haven’t heard of a bar anywhere with over 9.

Yes, the new leases will be topped up to a total of 12 and the reasons are two-fold.

Firstly, we want to reward our tenants for their loyalty. In the last 6 years there have been 1 or 2 tough ones with political issues and such like.

You’re right about 12-year leases. No bar in Thailand has a 12-year lease. I’ve never seen that either.

Secondly, I want our tenants to feel comfortable about investing in their businesses.

I totally understand why some bar owners in Bangkok are unwilling to invest because of short leases. But the customer experience suffers and then they don’t return. Catch 22, no easy answer.

Are big rent hikes on the cards? Not that it’s any of my business but customers believe this to be the case and feel what they pay for drinks and whatnot is down to the landlord charging fortunes.

Much less than what the tenants were expecting. We haven’t had a single complaint; most people are very happy. The last two years we have given rent credits to some bars to support refurbishments and we gave millions in rent credits in year 4 and 5 as the economy was hard on the bar sector. Over the years most of the bars paid under contract but we were happy to help.

It’s not my place to talk about drink prices.

Despite the new roof and other improvements that have been made to Nana Plaza, the age-old story it’s going to become a hotel or parking lot just won’t go away. Please, kill this story off with your plans for the future.

I thought we did by adding a $500,000 dollar roof, and now extending the leases to 12 years should help with rumour killing. But I’ve learnt you can’t kill a rumour. They are too much fun for people to let go of.

The biggest one is always that the Landmark hotel is going to buy our plot.

There is more chance of us buying the Landmark than the Landmark buying us.

One thing I’ve noticed is the continued security checks at the main entrance of NP for both staff and customers with the front bars now also fitted out with fingerprint scanners for staff on the doorways out back, why such rigid measures in place?

Because we absolutely do not want underage people inside the Plaza. Our tenants feel the same way. This is the Nana Plaza belief system.

We scan the ID chips of all Thai citizens and if we find any underage people we report it to the police and blacklist the ID across our club network also.

There are legal and moral issues to this. Legally, bars could face a 5-year closure, which includes jail time for bar owners, but more important, morally it’s the right thing to do.

If anyone reading is looking for that kind of thing, you are not welcome at Nana Plaza and please jump off a bridge.

With the new roof in place what’s your plans for the lower roofs. They seem surplus to requirements now?

We will be speaking to the tenants shortly about a brilliant idea Axel has: remove the small roofs and replace them with LED straps for the bars to have interactive signage.

The tenants can change the logos and colours of the sign based on their promotions and feelings of the day.

You now have a marketing person inside Nana Plaza, how have these efforts been received by tenants?

Some tenants were asking us a couple of years back for advice on how to promote the bars online and also how to get photographers. But it never seemed to get moving. So we brought in a dedicated marketing manager to help them with both.

He has done an excellent job. Our own social media statistics for Nana Plaza have sky rocketed and many of the bars have benefited from his assistance. We don’t charge the tenants for his work too.

One last Nana Plaza rumour… Are you ditching the yellow paint job and painting it another colour?

I don’t mind what colour the Plaza is actually. The tenants, not me, chose the yellow colour. They took a vote and came back with yellow.

If they want to change it again we would be very open to give it another colour.

Moving down the road from Soi 4 to Soi 8, I’ve written a couple of times in the past regarding redevelopments and licensing issues. The latest I hear is The Kiwi, which you are a shareholder in, will be moving across the road to the small sub-soi to the location that was home to Rewind Bar in the summer?

Yes this is very true. A couple of nice Thai fellas bought the current Kiwi spot on a 30-year lease and are putting up a boutique hotel.

But we were lucky enough to pick up the Rewind spot and will open there 1st June.

Lets hop across the main road and into Soi 11 where you own a number of well-known venues as there’s lots happening down that way. My first question is a tricky one but the party people aren’t happy with going home early out of the blue. Will these crackdowns continue or are we just going through a “phase”?

Thailand closing times are just as good, if not better, than most countries around Asia.

I think as expats we have been spoiled. The more you travel the more you become aware that Thailand is a fantastic party city.

It’s been almost a year since Insanity opened in its new home, how has the relocation gone?

The move to Soi 11 had been fantastic. We couldn’t have asked for more as we have twice as many people every day. The club has L- Acoustics concert quality sound that doesn’t exist outside of Las Vegas and a UFO style lighting system that Asia hasn’t seen before.

But the real reason Insanity has done so amazingly well is because of Benjamin Baskins.

He is the best club marketing guy in the business. Rafael his assistant is also an unsung hero who is another up and coming talent in clubland.

Jeff, Mike and Joy on Soi 11 also run a very tight ship at Insanity and Pedro keeps the customers safe.

Fantastic team, very proud of them.

Your clubs have brought some big names to Bangkok in recent months including Ja Rule who performed at Sugar Club earlier this month and Insanity hosting the likes of Willy William and Paul Oakenfold. Any more world famous stars from the music world coming up that you can give us a heads up on?

I’m talking with Ja Rule to bring some big names but I don’t want to reveal the names as the contracts haven’t been signed and it will jack up my price.

The location of what was Climax in the basement of the Ambassador Hotel is still sitting empty a year on, any plans to expand your Soi 11 portfolio in what was a popular spot?

That spot has never been on our radar. Meaw who runs the Hillary Group is a personal friend of mine and has been a huge help to me over the years getting the Nana Plaza tenants to buy into our vision and changes.

Soi 11 lost something when Climax closed. We even offered them to come into our Insanity building but logistically it couldn’t work.

I was just in Hillary 4 a few days ago for a Jack Coke.

I think she is the best bar operator in Bangkok, I have so much respect for her.

Let’s talk Patpong and that infamous story about you wanting to buy it, lock, stock and barrel. Is that true?

Well that’s only partially true. One of the older sons in the Patpong family is a close friend of mine. We talked about entering into an agreement together on a 30-year deal to manage Patpong together. The deal was very close to happening but at the very last minute we couldn’t get all the Patpong family to sign it off.

I truly believed that with Axel, our Nana GM, his energy and experience, our contacts and understanding of nightlife we could have really got Patpong moving.

I hope one day it could still happen. I would sign the original deal tomorrow.

Off the top of my head I can’t think of any venues you own or operate in that part of town, any reason why? Do you think Patpong as a nightlife area has a future or will it all come down and be replaced with hotels, condos and shopping malls?

Patpong will always be there just like Nana and Soi Cowboy.

The success of Patpong is really down to the vision of the tenants and the Patpong family owners.

But with one rolling year leases it’s understandable why things look a bit behind the times in some of those bars.

Richard Da Silva is down there now running a few bars and has done a good job turning them around and getting people fired up.

I wish the very best for Patpong and its tenants as they are always very welcoming to me.

So what about the roof and can you see one in the future over Soi Cowboy? The neon alley could be doing with it.

The middle of Soi Cowboy is a Government Road. It’s just two long rows of shop houses on paper. A common area roof wouldn’t be possible for them.

We are very proud of our roof. We have been planning this for some time. It’s designed to allow the heat to escape but also keep inside cool. The idea of the roof was to ensure Nana Plaza retains as many spending customers as possible during low season. Making money in high season is easy; The hard work starts in low season. So if you wanted to have a night out and it’s raining, get down to Nana.

We’ve bumped into each other all over town but never Soi Cowboy, do you visit much?

I’m more of a club guy. I swing by once in a while after having a bite to eat with Patrick. The bar owners in Cowboy are a strange bunch, Lots of in-fighting amongst bar owners and some are very paranoid. Soi 11 is my home.

In general, do you see the bar industry as we know it changing drastically in format over the next five years or so?

I see it changing but for the better. Experienced bar owners are still holding the fort for the industry, but new bar talents have come in and have raised the game for everyone.

The future is promising.

You have been involved in the entertainment and nightlife business for some 20 years or so and surely you’ve got some regrets or missed out on a deal that’s turned into something special. Any that instantly come to mind?

I think it’s important not to live with regrets, it’s negative. We have all ballsed up in business but you have to lick your wounds and move on. The only way to really learn is to fail you can’t get that from books or schooling. If you could change the past you would lose the good people you met along the way and the lessons you learned.

On the flip side, tell us your biggest achievement that you’re most proud of?

I would say it’s our brilliant work force. We have well over 1000 employees and the best management team in the business.

Jeff and Don have done a lot of the work and deserve a lot of credit.

Can you mention your influencers’, people who have helped you over the years to put you at the top of the nightlife world?

We’ve been blessed to work with some very talented people.

For bars I would say Patrick and Graham who have so much knowledge; also English Peter who is now semi-retired in Hua Hin. These guys have forgotten more than most people know.

These are possibly my best three friends in Thailand.

For restaurants. Micky is the master and he deals with that side.

For clubland, I’ve worked with so much talent but I don’t think I could have got off to such a fast start without the knowledge I took from working with David Jacobson, the founder of Q Bar. He taught me a lot about the little details that make the world of difference.

As a business mentor I would have to say without a doubt Krit Srichawala from Fico; his brain works on another level to anyone else I’ve ever met.

Last but not least, do you have any words of advice for bar and club owners in Thailand?

No but I do have some advice for nightlife landlords in Bangkok.

1, Meet with your tenants once a month for a coffee and see how they are doing. Try to help them in any way you can because their success is your success.

2, Don’t leverage too much debt on your buildings putting so much pressure on yourselves to collect rent payments when tenants need you to be flexible.

3, Encourage your tenants to renovate every 3 years and offer rent credits for the renovation period.

4, Give at least 6-year leases to your tenants and never let them run under 3.

5, Just because your tenant is doing well that doesn’t mean you can double the rents. Their success is their success not yours. Be proud they are doing well. If you take advantage of them they will eventually go bankrupt and you will lose your income and people will lose their jobs.

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