INVESTMENT

Beachside and resort properties in Asia have 'enormous potential'

Bali is the only regional representative in the top 10, writes Peta Tomlinson

PUBLISHED : Wednesday, 30 September, 2015, 1:12am
UPDATED : Wednesday, 30 September, 2015, 1:12am

Every beach worth its salt has sun, sand and surf. Most are good enough to visit, but you wouldn't necessarily want to invest there without a compelling argument.

So where are the beach resort hot spots that tick enough boxes to convince an overseas property investor? We looked around the region to find out.

Bali, the leading Asian second-home market, was a standout performer of 2014, with luxury prices up by 15 per cent year-on-year, according to Knight Frank's Wealth Report. Its methodology shows the resort island is going against the tide of a region-wide slowdown: Asia had four top-10 markets in last year's rankings, now Bali is the solitary regional representative.

Based on last year's online viewings of island-based properties via Knight Frank's website, Bali was one of the top three globally - alongside Ibiza and Barbados. The report found that buyers appear increasingly attracted to tight planning restrictions, "and even some outright building moratoriums, which is making an island property in many locations a rare commodity".

For foreigners, buying property in Bali might be about to get a whole lot easier. The Indonesian government is reportedly close to finalising a regulation that would allow foreigners to own apartments after President Joko Widodo approved the proposal in principle.

A list of uber-luxe resort locations, produced late last year by Savills and Candy & Candy, ranked Pangkor, Malaysia, Koh Samui in Thailand, and Australia's Whitsundays among the top-10 leisure islands where ultrahigh-net-worth individuals (UHNWIs) own a second home.

Tony Smyth, marketing manager of ALFA Investors, a luxury resort and city property specialist based in Hong Kong, says the company is fielding the most interest in resort properties in Thailand and the Philippines.

According to JLL, Koh Samui, where ALFA is marketing The Beach Samui by Absolute World Group, a private residence club of luxury beachfront suites designed by YOO, is set to receive a tourism boost. This follows last year's decision by the Civil Aviation Department to raise the daily quota for Samui Airport flights from 36 to 50.

The political turmoil that affected the Bangkok hotel market last year did not have a significant impact on the Samui hotel market, says Andrew Langdon, executive vice-president of the hotels and hospitality group at JLL, citing STR Global data showing above-average occupancy of 70 per cent for Koh Samui hotels last year, compared to 57.8 per cent in Bangkok.

Research from C9 Hotelworks shows a 4 per cent year-on-year growth in arrivals at Samui for the first half of this year. With the exception of budget and economy hotels, all tiers on the island logged improvements.

Smyth says foreigners can own property in Thailand under Foreign Freehold and Leasehold ownership. "Both these methods allow foreigners to own property in their own name or through a company incorporated in the UK, Hong Kong or British Virgin Islands, for example, in which the foreigner owns shares." The Philippines is noted by Colliers International as a location which international hotel brands have included their expansion plans.

That nation's popularity led the developers of Aqua Boracay by YOO to release more units in Hong Kong this month, following the successful first launch last year. Marco Biggiogero, chairman of Aqua Boracay, says the first phase was 30 per cent sold within weeks of last year's launch "which exceeded our expectations".

While foreigners cannot own land in the Philippines, they can purchase units in condominiums, as long as foreign ownership in a project does not exceed 40 per cent.

Tropical Sri Lanka has gained prominence on tourists' and investors' radar since the endof its civil conflict in 2009, with the beach resort town of Gallein demand.

Forbes has reported that, from an investment perspective, "the case for Sri Lanka is getting strong", but although international money has begun to flow - UAE-based JA Resorts & Hotels announced plans to develop JA Eclipse Beach Resort, a premium property in Kathiraveli on the east coast - there are still barriers to ownership.

According to the Sri Lankan embassy website, foreigners can freely buy properties, but they're required to pay 100 per cent land tax, based on the property's value. An alternative is to lease the land for 99 years, bringing the tax down to 7 per cent.

In Australia, business research and forecasting company BIS Shrapnel predicts Queensland's Gold Coast will be a star performer over the coming three years, with a 13 per cent price rise predicted, compared to a softening in the prime Sydney and Melbourne markets. According to Chinese property website juwai.com the Gold Coast "is now the place to be" for foreign buyers, with purchasing intent up 161 per cent in the first quarter of this year, and 1,120 per cent on the same time last year.

Chinese-invested Jewel, a A$1 billion (HK$5.6 billion), three-tower Gold Coast beachfront development by Dalian Wanda Group, is indicative of the projected demand.

Announcing the presales launch on September 19, Jewel's director of sales and marketing Andrew Bampton said the property offered "an unprecedented opportunity to live an extravagant life while also being able to walk from your apartment directly onto the world's most celebrated beaches". Foreigners can buy new properties in Australia under Foreign Investment Review Board rules.

Wherever they are, these popular beach markets are tipped to get hotter. Yolande Barnes, director of world research, Savills, says that beachside and resort properties have not been a major marketin Asia "but their potential is enormous".