ANALYSIS Will Phuket Tap Into French Capital Flight?
It's the dog days of May, and torrential rains on the island have turned my Golden Retriever into a soggy wet sponge.
News comes that the tribe of France has spoken and Socialist Francois Hollande has won the Presidency by a narrow margin. Part of Hollande's election platforms has been to tax the rich. For those who earn over one million Euro the tax would reportedly be 75%.
What's humming now are the financial news channels focusing on French capital flight. Over the weekend I read stories on Bloomberg and CNBC citing real estate agent's in London who have already seen rising demand and have taken on French speaking agency staff. Wealth management firms are reporting an upswing and many professionals are reportedly looking at overseas options for moves.
The fallout from the global financial crisis has had a profound effect on leadership throughout Europe. There has been blood in the political arena and there will undoubtedly be more. Certainly the message coming out of France today will create a ripple of sentiment throughout the continent.
While storm clouds gather over Phuket, a declining Australian dollar is making headline in Asia Pacific. Industry analysts take a view that further depreciation will take place over the next few months, with a key driver being reductions in natural resource prices which are an export driven commodity.
How does this all stack up for the island and the region in general. Over the past six months our experience has been that more Euro based investors in the hospitality and property sector are taking a look at returning to the market. We've seen a definite uplift in investor traffic recently and this looks set to become more of a trend given the unsettling climate in Europe.
While debt for hotel and property projects remains scarce in Europe, it's a different story in Asia. Likewise entrepreneurial investment and real estate look like sure beneficiaries.
In a world turned upside down, the region remains the world economic star for the moment. Of course for how long and how far into the future remains unclear.