Bangkok--Nov 17--CB Richard Ellis
In the closing months of 2004, all sectors of the Phuket economy are reporting a good year to date and looking forward to the months of November to April 2005 being the peak period for tourists, long stay visitors escaping Europes’ winter, and for real estate developers the peak sales seasons.
Pundits and analysts have warned of over development or a cooling of interest in Phuket, but this is an incorrect interpretation of the evidence available, according to David Simister, Managing Director of CB Richard Ellis Thailand.
In his view, Phuket is at the start of a new cycle as a premier worldwide resort. Phuket now has critical mass and will continue to draw in foreign buyers and long stay visitors.
Before Phuket Laguna, the Merridien was the only international hotel promoting five stars visitors. Amanpuri was an icon of top end boutique luxury but marketed to a limited and highly exclusive audience. The introduction of premier hotel brands such as Sheraton and Marriott with tremendous global reach has put Phuket on the destination list of more global tourists each year.
Other hotels’ brands like Banyan Tree, Trisara and Chedi reinforce the top end appeal of Phuket. The combined effect of 5 star brands, villa style resorts and wealthy visitors has created the demand for quality housing.
Laguna launched in 1991, condominiums, villas, and golf housing and established a broad acceptance of foreign ownership in Phuket through both condominium and leasehold title. The area around Laguna then saw a host of smaller estates developed providing more generous housing targeting Hong Kong and Singaporean buyers. Today the west coast boasts quality residential development from Nai Thorn in the northwest through Kamala to Kata on the southern end of the island.
Kamala headland now has the tag “Millionaires row” with minimum villa prices of one million US dollars. Development has spread from the west to the south and east coasts and also inland.
The completion of new housing and condominium projects has drawn new residents to Phuket. Hospitals, retail shops, and schools have opened and expanded to meet this demand and now further add to the international appeal of the island.
The result of development to date is to create an island with even more appeal to a wider and growing number of international buyers. Over 1,000 current foreign owners of Phuket real estate are international advocates and ambassadors at large, promoting the benefits of Phuket property ownership.
Regionally Phuket has little competition. The Philippines can offer white sand and dramatic scenery but not economic stability, infrastructure, or safety. Bali and Indonesia face similar drawbacks. Even Malaysia with the benefits of an English inspired legal framework and an established tourist infrastructure fails to deliver the same appeal.
Phuket competitors today are Krabi, Khao Lak, and Samui but are a long way behind in the range of products, market acceptance, and infrastructure. Phuket has long left behind the simple beach hut market for five star resorts, spas, tournament golf courses, and international schooling.
The future lies in more development, more tourists, more retail centres, marinas and the segmentation and maturing of the property market.
Existing villages will become towns, tourists will come to inland apartment complexes offering value for money. Well positioned and managed developments like The Plantation and Layan Estate will appeal to international owners combining ownership with the ability to rent into the growing villa rental market.
Phuket will continue to develop in a manner similar to the Mediterranean offering holidays and property to a wider and growing international clientele. The market today may be compared to Spain in the early seventies it has a long and rising development cycle ahead.
Ten years of consistent growth is quite realistic from CB Richard Ellis’ view of the market. There will be pressure on the infrastructure but Phuket can absorb 200-300 units of up market property i.e. over 15 million baht and 300-400 more affordable homes each year as its global market grows.
Coupled to this will be growth in demand for services particularly in real estate and property management hence CB Richard Ellis’ interest in the growth of a well managed real estate industry.
About CB Richard Ellis
Headquarter in Los Angeles, CB Richard Ellis is a leading global real estate services firm. With more than 17,000* employees, the company serves real estate owners, investors and occupiers throughout 300 principal offices worldwide. The company’s core services include property sales, leasing and management; corporate services; facilities and project management; mortgage banking; investment management; capital markets; appraisal and valuation; research and consulting. CB Richard Ellis is a public company, listed on the New York Stock Exchange under the symbol CBG.
CB Richard Ellis established an office in Bangkok in 1988 and in Phuket in 2004. CB Richard Ellis (Thailand) Co., Ltd. has grown to be a leading real estate services provider, offering a full range of services including sales and leasing, property and facilities management, valuation and advisory, and research and consulting. For more information, visit the company's website at www.cbre.co.th.
* Includes partner offices
For further information:
Mr. David Simister
Managing Director
02 654 1111
Ms. Khanitha Jarukirati
Phuket Sales Manager
076 239 967-9
Ms. Ngamjai Jearrajarat
Corporate Communications Manager
02 654 1111 Ext. 522 End.