Real estate investment on the island of Koh Samui
Koh Samui, Thailand’s number one tropical island destination with its own international airport, creates an ideal platform for any property investor. Renowned for being an internationally known world-class vacation destination, it not only provides a plethora of nationalities, but also opportunities for lucrative real estate investments.
While most interest has traditionally been from European countries such as the UK, Germany, Russia, the Netherlands, France and the Scandinavian countries, a new market of investors is emerging from countries in Asia and the Middle East, including Singapore, Vietnam , Korea, China and the UAE The recent increase in interest from Asian investors is due to an increase in disposable income levels, recent deregulation of foreign investment laws (Korea), as well as new direct air links to/from from Ko Samui. Discounted flights within the region also offer great value to tourists wishing to holiday on Koh Samui and the surrounding islands.
Koh Samui’s real estate profile includes many big brand hotels and exclusive luxury villa developments.
The market here is firmly established due to the fact that almost all property purchases are made without financing. In fact, local mortgages are not readily available, making property prices much more resilient to the global financial meltdown. What has been seen in recent months is the discounting of certain properties, where the owner has the need to sell quickly due to financial losses suffered in other parts of the world. This has created several buying opportunities, although these are usually quickly passed on to investors with cash.
Therefore, recent activity in the Koh Samui real estate market has been mainly driven by cash investors, looking to move funds into properties where good discounts have been offered. There is activity both in resale properties with price reductions of 10% to 30% to move property quickly to free up cash and also in certain developers looking to manage their working capital and liquidate property stock. As of early 2009, developers have been finishing partially completed properties and selling them at a discount for cash. At this time, there are still several opportunities to win and buy luxury properties, before the local market shows full signs of recovery and begins its expected growth path.
After understanding these current local climatic conditions, the Koh Samui market has undergone a change of emphasis with the arrival of a new generation of creative developers aware of the great potential of the planned increases in the number of luxury travelers and investors seeking investment. of lifestyle.
Focusing on two innovative developers, both anticipating this demand for lifestyle investment properties, both focusing on the area surrounding Plai Laem and Cheong Mon. They reason that with the area’s fantastic beaches, close proximity to the airport, and no signs of overcrowding, this makes it an ideal location for a lifestyle investment. In fact, the area still exhibits a traditional Thai feel with small beach resorts mixed with more luxurious properties, 5 star spa resorts and hotels.
Both have strong ideas on how to create lifestyle properties, acting as an exciting investment and lifestyle vehicle for those looking to experience life on the tropical island of Koh Samui in luxury packages.
The Mandalay Gardens apartment project is located not far from Cheong Mon on the hillside. It is only 800 meters from the beach, with many of the apartments having spectacular sea views. In fact, it is a totally flexible vehicle and, as an investment in a lifestyle, it offers its owners the best possible benefits, with the special feature of Astudo-branded hotel management. The project launched in May this year, with an active investor-ready display unit already on the hillside site. There are 9 different types of 1-bedroom units ranging from 50 m2 to 90 m2. Prices start from 3.49 million Thai baht. Return on investment is not guaranteed, but at 35% occupancy it is expected to reach 6-8% at an average nightly rate of 3,600 baht. Most homeowners are expected to participate in the rental program and by doing so are granted up to 60 days of free use per year. There is the possibility before construction begins to combine 2 or more units to create 2 or 3 bedroom apartments. After his successful first project, Mandalay Villas, Tibor Szedlak, CEO of Mandalay Samui Developments, stated that the company was founded with private financing, with no loans or other outstanding commitments. The legal status of this current project gives its owners a 30 + 30 + 30 year leasehold property. Land ownership is secured by the fact that each unit owner is an equal shareholder in the company that owns the land. Payments after the initial 35% deposit are based on monthly installments due as work is completed. Sterling has been appointed as Project Manager with DFDL Crawshaws acting as legal advisers. The entire project is located on 5,600 square meters of land and construction will begin in September 2009 and Phase 1 will be completed in the third quarter of 2010.
The Samui Emerald Condominium represents another attractive option as a lifestyle investment, with construction already underway, now is the time to take advantage of the remaining units on offer. Completion of the entire facility is contractually scheduled for December 2010 at the latest. Located next to Plai Laem Beach, it offers easy access to Cheong Mon and back along the coast to the elegant Fisherman’s Village resort. This area is home to the high-end resort, Six Senses-Hideaway, and the Giorgio Armani-branded villa development is also nearby. Other nearby attractions include the Big Buddha, Turtle Island and Koh Som. Samui Emerald units give their owners access to elegant facilities including a large swimming pool, restaurant, fitness center and multilingual reception. Units range from 1 to 3 bedrooms, including 4 Penthouse apartments with standard units from 44m2 to 109m2 with prices starting from 3.05m baht. Units come fully furnished with modern designs, including all loose furnishings and electrical items. Again, there is no guarantee on investment returns, but expect 8% with average rental rates estimated at 2,700 baht per day for a standard studio room at 30% occupancy. Samui Emerald will function as a hotel. Guests will be met at the airport, transferred to the site, deposits will be taken, guests will be shown to their rooms to find a welcome basket and toiletries waiting.
The owners who take advantage of the rental system will be able to benefit from up to 167 days a year of free use, obtaining income the rest of the year. Given its legal status as a Condominium, it also provides foreign investors with the opportunity to obtain a foreign title.