Resort property market builds on firm foundation

CB Richard Ellis

CB Richard Ellis

CB Richard Ellis’s experience with selling resort properties started in 1990 with Laguna Phuket, where we were involved in the master planning, launch and ongoing sales of its residential condominiums. The project not only transformed the former tin mine into Thailand’s most successful resort development but was also pivotal in the emergence of Phuket’s property market.

The strength of Phuket is reflected by the continuous increase in land prices. Prime areas for transactions include Kata, Patong, Bangtao and Surin. A beachfront plot in Karon, on Phuket’s west coast, recently sold for 40 million baht per rai, while inland plots in Patong are currently fetching 45-60 million baht per rai. Across the Sarasin Bridge in Phangnga, beachfront land prices have risen to approximately 15 to 20 million baht per rai, depending on size and location.

We are seeing a new breed of luxury developments in Phuket, notably branded luxury resorts with integrated private residences. The financial viability of this model, which allows developers to fund resorts through the sale of private residences, has led to an increase in the number of such projects. The Yamu (a GHM-managed hotel) and Jumeirah Phuket Private Island are two successful upcoming projects on the East Coast, while others in the pipeline include prestigious brands such as Four Seasons, Park Hyatt and TAJ.

New price points are still being achieved in line with improvements in quality and design. Luxury oceanfront villas in Phuket now start at $5 million and have hit over $10 million. While prices are constantly reaching new heights, a segment of the market has also become more investment-driven and buyers are looking for properties with potential for both capital appreciation and good rental yields.

The Samui real estate market started in the 1990s with Bangkok Airways’ opening of Samui Airport. It began with individual owners who bought plots and developed their own villas, later growing into small-scale beachfront and hillside villa projects. Samui’s slower development pace when compared to Phuket allows the island to be positioned as Asia’s boutique resort destination.

Today, Koh Samui is seeing the emergence of a luxury villa market that caters to an expanding segment of sophisticated travellers. An increasing choice of residential and hotel developments is available. Adjacent to the new Four Seasons Resort Koh Samui is The Estates, Samui’s first branded villa development of 14 units managed by Four Seasons, where more than 60% of the villas have been sold.

Soon to launch, W Koh Samui Retreat & Residences is the island’s next branded residence development, and a flagship of CBRE Koh Samui. It offers 17 private residences set within the 75-room W Retreat. A number of international hotel chains are also under planning in Samui, including Conrad, Banyan Tree, Dusit, Park Hyatt and Intercontinental. The island is rapidly transforming from an offbeat beach destination into an established luxury market, with prices comparable to those in Phuket.

While Phuket remains the most mature resort property market in Thailand with the widest range and highest prices, Pattaya is undoubtedly the most popular destination, with more than 6.6 million visitors last year. Tourism is a main factor in the growth of resort real estate, and Pattaya has attracted a mix of foreign and Thai interest. The majority of recent developments are high-rise condominiums where prices have quickly progressed from below 100,000 to more than 125,000 baht per sq m. In high-end villa projects such as Baan Talay, prices of typical two-bedroom villas with partial sea views range from 15 to 30 million baht, depending on size and view quality, while premium first- and second-row beachfront villas have sold for between 50 and 100 million baht, though these are in limited supply.

While other markets are led by foreign buying, Hua Hin has traditionally been led by Thai buyers, with limited overseas interest. Yet prices have increased over the past year as more quality developments are being launched. Pricing in new luxury condominiums, such as Major Development’s Marrakesh Hua Hin, a Moroccan-themed low-rise development, averaged more than 130,000 baht per sq m. The project is located on a prime beachfront site right at the centre of Hua Hin beach.

We see an important government role in stimulating the Thai resort property markets, and some positive steps, such as tax incentives, have already been introduced. We believe ownership structures that encourage foreign ownership will be critical, particularly for Samui and Phuket, where demand is mainly foreign. An extended lease term for land (from the current 30 years) will encourage villa markets in key destinations, while resort condominium markets would benefit from raising the foreign ownership quota above 49%.

I believe Thailand’s resort markets have the potential for further expansion as buyers continue to seek new locations such as Phangnga and Krabi, or even private island destinations in the Andaman Sea (Yao Noi, Maiton, Naka Yai) and Gulf of Thailand (Koh Kood, Koh Chang). However, if no improvement in tenure is offered, opportunities may be lost to regional competitors such as Malaysia, Vietnam and Indonesia, which offer a more convenient ownership structure and longer lease terms of 70 years (Vietnam) and 99 years (Malaysia).

David Simister is chairman of CB Richard Ellis Thailand. This article is part of a weekly series examining the evolution of the Thai property market to mark the 20th anniversary of CBRE in Thailand. For more information, please visit

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CB Richard Ellis CB Richard Ellis
CB Richard Ellis Thailand operates throughout Thailand and covers all aspects of Thai Real Estate from offices in Bangkok, Phuket, Pattaya, and Koh Samui.
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