bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Competition for foreign investment in luxury condominium projects in Thailand is hot.
Bangkok has been a staple in this sector for many reasons from local demand catering for expatriate workers living in the capital to affluent retirees arriving to live in the city.
In the Thai capital, 1,836 condominiums were completed in 2004 and 3,133 more were completed last year. Forecasters point out that 6,249 will be completed this year and the 2008 estimate for new completed condominiums is 7,747.
Phuket has over the years opened up the 'tropical home' market and it has boomed. Now other regional Thai centres such as Pattaya, Hua Hin, Koh Samui and Krabi boast developments that can be compared with, if not surpass, early Phuket projects.
Resort destinations make up 30 per cent of all condominiums sold in Thailand. Price averages per square metre are 89,842 baht (HK$22,092) in Pattaya, 84,023 baht in Phuket, 85,505 baht in Hua Hin and 87,667 on Koh Samui.
Since the development of the regional cities, an often asked question by potential international property investors is: Is Bangkok a better value purchase or should I look to the beachside resorts?
Savills (Thailand) managing director Robert Collins  said Bangkok and nearby Pattaya remained the cities with the most potential for long-term gains. With Thailand's new gateway Suvarnabhumi Airport  open, central Bangkok is 40 minutes away and Pattaya is just a 90-minute drive south.
'Investors seeking initial capital gain opportunities should focus on grade A condominiums in Bangkok and Pattaya, in preference to land or long leasehold villas,' Mr Collins said.
'Resort [outside of Bangkok] villa rentals are expected to follow tourism levels and target positive revenue return growth over the short- to medium-term.
'Pattaya, which is for the most part shunned by Hong Kong-based buyers, annually attracts more visitors than Phuket and Koh Samui combined and, therefore, from a pure investment perspective offers arguably better rental income potential.'
Hong Kong buyers do not appreciate residential developments that are too close to nightlife areas and usually prefer more upmarket destinations such as Phuket. A quarter of condo buyers in Pattaya are from Britain, 16 per cent from the United States and 6 per cent from Ireland. Thai buyers take up 18 per cent.
'In addition, Pattaya has on average 107 days of rainfall per annum, compared with 171 days for Phuket, allowing for greater availability for practical use by owners and for rental generation.'
Dan Tantisunthorn, associate director, research consultancy, Jones Lang LaSalle Thailand,  said investors should analyse the Bangkok versus regional centre argument using the same investment criteria and there were more developments being completed so investment values could be better gauged.
'The recent development and completion of new supply in Phuket, Chiang Mai and Koh Samui relieves some of the speculative aspect to real estate investment,' Mr Dan said.
'The completion allows an examination of the relative position of these assets, and how they actually perform and are managed. It also allows for an assessment of any negative impact on older, existing real estate stock. What does remain certain is that foreign individuals and corporations can own up to 49 per cent of the sellable space in strata-title buildings in perpetuity.
'These types of properties exist in Bangkok and outside - for example in the resort destinations of Phuket, Koh Samui and Chiang Mai.'
Mr Collins said while Bangkok grade A property remained a solid investment, he advised potential buyers to do their homework on Thailand regional sectors because they were beginning to show signs of solid growth.
This growth is also linked to Thailand's tourism performance, especially for investors looking to get into internationally branded and managed resorts.
'Phuket remains very attractive for high-end villas, particularly developments with resort branding. Pattaya's freehold condominium market is expected to remain a good buy, and Samui is seeing the emergence of resort-branded property that might start to really compete with Phuket over the next 12 months,' Mr Collins said.
'It is important for buyers to research the market. The optimum resort property should be attractive for investors and owner-occupiers. The engine that drives the Thai resort residential property market is tourism. On the basis that Thailand remains a top global destination for tourism, the resort markets should continue to perform.'
Mr Dan said the expansion of Thailand's tourism and aviation sectors was also a factor driving demand and occupancy levels. 'The number of direct flights serving Hong Kong, not just to Bangkok, but to resort destinations such as Phuket and Koh Samui, has been increasing.'



Hot market shows no signs of cooling