Villa Sales Issues:

When compared to Phuket, the Samui real estate market is still in its infancy but it is rapidly catching up in terms of product variety and robust pricing levels. The Samui Estates villa project (adjacent to the Four Seasons), was the first large scale project in Samui priced in excess of THB100m. However, the W Retreat and Conrad randed luxury villa projects are also testing pricing levels in the market as are a variety of smaller boutique luxury villa developments.

With the newness of many of the high end developments, it remains to be seen how the market
tolerates current asking prices. However it needs to be acknowledged that current and upcoming supply in the top of end of the Samui property market is very limited and few prime parcels remain available for future development. As such it is likely that in the medium term, upper tier property will remain a small but exclusive segment of the wider Samui property market, adding support to the price premium.

Another change is location of new upper tier projects. The bulk of development in Samui has always clustered on the northern and eastern coasts, which have become increasingly built up. As such, with a growing array of high end developments clustering along the south west region from Taling Ngam to Thong Krut and the last few remaining coastal parcels in the area being bid up, it appears that Samui is in the process of creating a new luxury enclave.

Looking Ahead:

Change In Demographics: Due to increased accessibility to key regional and international markets, it is likely
that Samui is likely to see a change in the make up of its visitor groups. New direct air routes announced recently will open up access to Samui for high net worth individuals, particularly from the Middle East, Russia and China.

Smaller Boutique Developments: The shortage of developable land (or contiguous land parcels) in prime
areas has led to an increase in the number of small scale high end developments, with 10 or fewer units. Examples of this include Naissance Villas. While new areas opening up in the less developed south and west of Samui have afforded investors the opportunity to purchase parcels of land suitable for larger projects, the overall shortage of land on the island will not make this trend sustainable.

Infrastructure: Appropriate infrastructure is being developed in support of the sustained growth of the tourism market. This includes the new terminal, which became operational at Samui Airport in 2007, more than quadrupling handling capacity to 16,000 passengers. This is complemented by planned additional air routes into Samui, which will provide access for new tourism segments. Other works underway include the expansion
and improvement of essential access roads, including projects to widen key roadways.

Local Power Shifts: The recent decision to declare Samui a “town” in its own right as opposed to a sub-district of Surat Thani, has resulted in some administrative changes which may have positive effects on the island and it’s future development. The island will now be able to deal directly with the central government in Bangkok, rather than petitioning Surat Thani to do so on its behalf and ought to have a greater say in its financial affairs and infrastructure planning going forward.

Samui Marinas: While Samui has very little infrastructure in place for the boating market, this may be set to change. A public meeting was held in October 2008, to discuss the possibility of building a small public marina on the island. While different locations have been discussed, it appears that the current front runner is the Big Buddha area. In addition, it has been suggested that the upcoming Park Hyatt will have yacht berths on a neighboring island.

Green Island Project: Samui’s development has been rapid and the current pace is not sustainable. As such it has been recognized that certain aspects of infrastructure planning have lagged behind tourism growth causing stress on natural resources and local culture. The aim of the project (a collaboration between public and private sector interests as well as tourists), is to protect and restore the local environment and local culture as well as to create a tourism business that is sustainable in the long term.