PLUS supports the Phuket Sandbox initiative and notes that opening up the province will provide momentum for the tourism economy. The measure will re-attract foreigners into Thailand, thereby helping the recovery of business and employment as well as investment. Windfall is expected for the property sector, and increased opportunities will likely be at hand for letting and reselling to foreigners looking for vacation homes, tourists, professionals and businesspersons making investments in Phuket who wanted a second home. In normal times, rental yield in Phuket stands between 6-10% and capital gain stands between 5-10%. The currently reduced prices of real estate and cost reduction campaigns offered by developers may be seen as favourable. Provided that the sandbox model is properly implemented, the economic and investment climates in Phuket are expected to regain steam.
Ms. Somsakul Limsuttaphan, Deputy Managing Director - Business Development and Asset Management Department, Plus Property Company Limited, the full-service professional property and facility management agency, gave her thoughts on the 'Phuket Sandbox' initiative where the southern island province will open up to foreign tourists on the 1st of July. According to her, PLUS views the development as a positive signal that will contribute to the recovery of tourism activity in Phuket. The recovery of other businesses and employment in Phuket will pick up as a result, while the real estate sector is also expected to receive a windfall. A look at the portfolio of PLUS's property brokerage business reveals that 88% of condo tenants at PLUS-managed residential developments in Phuket were foreigners and 12% were Thais. If the Phuket Sandbox initiative succeeds and the province is able to efficiently open up and operate under the model, tenancy demand from foreigners and purchasing power for property investment for purposes of letting and reselling will improve accordingly.
Data available to PLUS points to a picture where most foreign renters opt for stays during high season - during October and February. Most choose condominium projects with attractive common spaces, a large swimming pool and full-range amenities. The renters also prefer fully furnished 29-30 sq. m rooms with good views of the outside, equipped with a complete set of electrical appliances and items such as dishes, utensils and cookware. The tendency is to choose projects located in urban areas where transportation is convenient. While professionals have been observed to rent rooms for the long term, to stay during their employment stint, they have also been looking at purchasing condo rooms for self-use and for future letting. The buyers tend to select condos close to their workplace and amenities such as convenience stores and restaurants. Most favour 29-30 sq. m rooms that are supplied with furniture and appliances and are ready for move-in. Under normal circumstances, the rental yield for condominiums in Phuket stands at 6-10% per year and capital gain stands at 5-10% per year. Although the COVID-19 pandemic has resulted in a decline in these yields, the situation is expected to gradually recover towards normalcy after the implementation of the Phuket Sandbox measure and the plan to 'open up' the country within 120 days.
Phuket's prospects are recognised by its standing within the top ten destinations in the ranking of 'The World's 30 Best Places to Visit in 2020-21', which was produced from online voting on the U.S.News & World Report website. It is one of Thailand's prime tourism cities and has a significant economic footprint. Since 2015, at least 97 billion baht has flowed into the province in the forms of public and private investment; these funds were concentrated onto development of infrastructure such as roads, airports and railways as well as on large private sector projects such as the Blu Pearl, Central Festival Phuket, Central Phuket Floresta and King Power. These developments reflect the great business and industrial potential of the province and it is believed the island will be able to reattract tourists, businesspersons and professionals.
"Phuket is a tourism city with good prospects, owing to infrastructure readiness and adequate offering of transportation options and amenities as well as its transformation into a Smart City. The Phuket Sandbox initiative will contribute to the province's recovery. Real estate investment is appealing for investors who want to let out a room or hold it for future resale. The yield is higher than in Bangkok and there are positive factors to do with cost, wherein many projects have commenced special pricing campaigns. In the part of PLUS, preparations have been made to accommodate Phuket's opening. 100% of PLUS's personnel have been vaccinated, including the juristic person staff who administer residential projects as well as the sales staff. COVID-19 prevention measures are in place for potential buyers who visit each project; these involve temperature screenings, registration spots for the Thai Chana platform, provision of health masks, cleaning and sanitisation, increasing the frequency of cleaning at frequently-touched spots, and installation of disinfecting machines to purify the air in sales offices. The measures are taken to accommodate investors and would-be buyers who are interested in the residential projects under the care of PLUS", said Ms. Somsakul