Krabi â€“ On The Cusp of a Boom
Krabi, by all reports, is about to experience a boom in the property market. Out of curiosity I set out with a map, a small list of developments, and three days to find out more.The search was not an easy one. Unlike Phuket, there are no offices of internationally affiliated property agents such as CBRE or Knight Frank, or any large local agencies.First stop was Robert Reynolds of Krabi Consultants, who, with 12 years in the area, proved to be a great resource.
Tourism is an excellent demand generator for property so I checked out two of the newest branded resorts in the area: Central's Krabi Bay Resort, which has been open a year, and the newly opened Sofitel Phokeethra Resort.Together with the Sheraton Krabi Beach Resort, which has been operating five years, these are the only brand-managed properties in the area, as the longstanding, up-market Rayavadee, formerly a Dusit, is now independently operated.
According to General Managers of hotels in the area, annualized occupancies are now around 60%, with average room rates at upper-tier hotels surpassing similar products in Phuket.
While Ao Nang and Railey Beach are well established with the heaviest concentration of hotels in Krabi, Klong Muang and Tub Kaek are emerging with a number of up-market boutique hotels such as the Tub Kaak Resort and Nakamanda Resort & Spa.There are also new entries opening this year, such as Phulay and the Vogue Pranang Bay Resort & Spa. The Phulay, designed by renowned Thai architect Lek Bunnag, is reputed to be in the same league as the Amanpuri and Trisara.
Major investment in this area is with significant groups such as MBK and Boon Rawd Brewery. Talking to hotel owners and managers, I heard two overriding themes. First is the desire to learn from Phuket's mistakes, which is evident in the underground power lines along the beachfront, the ban on jet-skis and sun loungers on public beaches, and the emphasis on maintaining a natural environment.
Second is the sense of pride you hear in discussions about assets that make Krabi a unique destination. Among them is the new airport. It's modern, well planned and in many ways superior to Phuket's. With direct international flights from Singapore on Tiger Airways, along with THAI and a variety of low-cost carriers, the facility will significantly enhance demand for the destination.
Reviewing my list of property developments turned out to be no small task. Roads are not well marked; developers have yet to use directional signs; and in most cases even projects underway do not have signs or sales offices.In Klong Muang, Phulay Heights' 52 villas look out over Phang Nga Bay. On the beachfront at Nammao Bay, near Fossil Beach, is Amatapura with its 29 pool villas.
At Haad Yao (Long Beach) lies Krabi's most touted project: The Cove, where more than 1,000 rai is being developed to provide more than 1,200 residential condos and villas, branded hotels and an 18-hole Colin Montgomerie-designed golf course.With long stretches of beachfront and stunning views of distant islands, this is one of the Thailand's largest developments. Located nearby is Le Kiri, a boutique beachfront development of eight villas.
While there are a few smaller, mid-range projects in the 2-4 million-baht range focusing on buyers from Scandinavia and the UK, Krabi, in terms of residential product, is where Phuket was 15 years ago.
But despite the limited product range and lack of international agents – although it is rumored that CBRE will open an office there soon – land in Krabi is not cheap.Large lots of prime land were snapped up years ago, mainly by wholesale buyers from Bangkok, so this may explain the lack of smaller developments. For golf courses, there is only the Pakasai Golf Club, which recently upgraded to 18 holes, and there are no major marinas to speak of.
Given the rise in tourism, hotels, and ease of access, Krabi appears to be on the cusp of great things. Property development will most likely follow the branded hotels in Klong Muang and Tub Kaek and will evolve over time in the Haad Yao area simply because this is where the undeveloped land is.
Thalen Bay, with its proximity to the new five-star hotels and stunning views would seem a likely candidate for longer-term development. It's going to be an interesting ride to see how Krabi's tourism visionaries stick to their plans and integrate with the property market.
In the meantime, if you head off to Krabi looking for real estate, take a good map and lots of patience and time. The market is pretty much a blank page at present, but that looks set to change rapidly in the very near future.