Phuket’s once-quiet beachside west coast community of Bangtao is experiencing an unparalleled surge in real estate development. According to new research from C9 Hotelworks, there are currently 7,842 condominium units (click to see upcoming project map). Added to the supply influx are just over 2,400 upscale and luxury homes, which equate to a pipeline of more than 10,000 residential units in the market.
In what is a fragmented neighborhood of Bangtao, Laguna, Cherngtalay, and Layan, these areas traditionally formed what is a tourism-oriented district. All of this is now changing, and the influx of real estate projects looks to recast the area as Phuket’s ‘Gold Coast’ in what is an emerging metropolitan area.
Despite a methodical pace of property growth over the past two decades, the post-pandemic inward migration onslaught of expatriates has been nothing short of phenomenal. Inland land prices in the area have more than tripled over the past 24 months, where land that had been THB8-10 million a rai is now THB25-30 million.
One of the key triggers of the property boom has been the Russian-Ukraine conflict, which has supercharged what was already a growing geographic source of business for tourists and real estate. Russian buyers now account for the lion’s share of properties, though there continues to be diversity in broader terms. Coupling with the incoming Eastern European growth is a steady stream of lifestyle buyers who are jumping onto the urban flight trend to work from home and focus on quality of life away from highly populated cities.
There is a rapid rise in new residents from the US, Singapore, Hong Kong, China, and Europe. Key to the migration storyline has been the widely popular Thailand Elite long-term visa program as well as the government-initiated retirement visa. A secondary demand generator has been the strong growth of international schools, which are now in double digits in size and expanding. These offer access to dependent and/or guardian visas.
Moving back to the makeover of Bangtao from a tourist area into an international community, there is an escalation of residential properties in size versus hotels. C9’s research shows there are 2,837 rooms/key of international standard properties in the expansive area. These are now being dwarfed by property development, which creates challenges and a potential problem of unlicensed tourism accommodation.
Thailand’s Hotel Act, as it stands now, makes it difficult and in many cases impossible for residential condominiums or villa estates to obtain hotel licenses. For condominiums, the conversion from residential use to commercial use that is required for a hotel license has been stymied at local approval levels and remains a contentious issue.
What is apparent with over 10,000 new properties coming up is that not all buyers will be end-users or owners of holiday/second homes. In many cases, residential buyers have expectations of high rental yields from a flourishing Phuket tourism market, yet they might face problems in the future as projects lack hotel licenses. For the traditional hotel sector, there is concern over unfair competition from the informal rental market.
Realistically, the lack of a licensing mechanism for residential properties is putting the government at a substantial tax disadvantage, and funds that could be earmarked for badly needed infrastructure are an opportunity missed. Safety in non-licensed accommodation should also be a critical area of concern.
As to who is developing the upcoming projects, these are comprised of three main groups. Laguna Phuket remains the largest land bank in the Greater Bangtao area, and it has shifted focus from tourism to real estate as an economic necessity. With more projects within the main destination resort area, the company will also push into a new mixed-use community north of Laguna Village.
On the Thai development front, post-COVID19 has seen Bangkok developers active, such as CPN (Central Pattana), One Origin, AssetWise, and Sansiri. Local groups include Boat Pattana, Botanica, and Anchan. Given the escalation of land prices, the current state of play favors mid-rise condominiums as the only way developers can make an economic case with underlying land costs.
For the third group, Eastern European, or mainly Russian developers have flocked to the Bangtao area as market sentiment is at its highest level. These projects account for at least half of the total condominium units coming to market, due to the greater density of development. At the end of the day, rising land acquisition costs are spurring this trend.
Another change for Phuket property is the escalation of commissions which remain unstandardized. In many of the new Bangtao properties that lack brand or strong customer bases, commissions have risen to 7-10 percent. In certain cases, even a cash bonus of up to THB100,000 has been added to the incentive.
Whereas more traditional projects would have seen lower commissions and higher marketing costs, developers are now becoming massively reliant on a growing brokerage base. A growth spurt of Russian and Eastern European agents now sees projects chasing them for prospective buyers. Certainly, brokerage has taken center stage for the moment, though there remain questions as to the depth of their customer base longer term. One good example of underlying growth in brokerage is the leading portal FazWaz, which has established a strong base for online buyer generation.
Lastly, larger property groups are closely watching the formation of new Phuket development regulations. This is regulated by the Phuket Department of Public Works and Town and Country Planning together with the Bangkok-based Ministry of Natural Resources and Environment which oversees Environmental Regulations.
In C9’s discussions with experts on the draft plan which is expected to formalize in 2024, there will be a greater alignment to Bangkok-type rules that focus on FAR (floor area ratio) and higher minimum-road width for mid-rise development. It’s likely that given Phuket’s growth, certain areas will be zoned for high-rise development.
These changes, while needed, will come too late to address growing traffic concerns. The addition of over 10,000 new residential properties to the Bangtao area will see an uptick of large construction vehicles, a large-scale growth in private vehicles, and is a serious situation that has to become a government priority. Sadly, there is no blueprint structure for an expanding Bangtao metropolitan district that crosses many local jurisdictions. The most glaring immediate need is a traffic study and action plan by the municipality and highway department.
As a final point, one missing link in the growth of residential units is the lack of diversification of larger demand generators such as a full-service hospital, central parking structures, commercial buildings, international convention center, public parks, and pedestrian-friendly access. This, of course, is at odds with sky-high property prices that dictate highly dense projects to make economic sense. What is desperately needed is a Phuket Master Plan and acceleration of transportation infrastructure.
Bangtao’s journey into a metropolitan, ‘Gold Coast’ community is well underway, and we do expect cyclical growth to continue into the high season, but there is also a tendency to wonder: when does the market peak, and what comes next?
To view C9 Hotelworks Latest Phuket Hotel Market Update 2023 CLICK
C9 Hotelworks has released an exciting new market research report Habuba Tourism and Property Market Review.
Hakuba, renowned for being part of the 1998 Nagano Winter Olympics, has evolved from a seasonal Australian-focused skiing destination into a year-round getaway. It is located within a three-hour drive from Tokyo. The valley has witnessed increasing development, attracting emerging markets from Asia, notably Taiwan, Hong Kong, and Singapore. Furthermore, the COVID-19 pandemic rejuvenated the appeal of high-quality ski destinations in the domestic market.
The robust growth extends beyond tourism to the property market, driven by a rising demand for holiday rental homes. Traditionally, Hakuba focused on the development of ski chalets with classic alpine designs, which remain prominent. Nevertheless, the market is now witnessing an influx of condominium projects, exemplified by the successful ROKA Residences development. Offering units ranging from two to five bedrooms with ski-in/ski-out access, this luxury project by Hakuba Mirai experienced strong sales during the pandemic.
A noteworthy development generating excitement in the market is the debut of the Banyan Tree Resort and Branded Residences in Hakuba. This represents the first entry of a hotel and branded residences into the market. Situated in the Wadano and Happo areas of Hakuba, the project encompasses 105 hotel rooms and 32 condominium units available for purchase, all providing convenient ski-in/ski-out access to the Happo-one ski resort.
In line with the Niseko market, ski-in/ski-out access on prime land continues to be the preferred choice. Given the presence of undeveloped, affordable land in Hakuba, we view the market fundamentals favorably.
To read and download the full report CLICK
Standard International is set to launch two new hotel branded residence projects in Thailand.
According to the Bangkok Post the project is being developed by a Central Group affiliate and will be launched later in the year.
Units will range from one-bedroom units, 55 square meters up to large duplexes.
The mixed-use project will also include a 150-key Peri Hotel which is one of Standard’s brands, along with other lifestyle commercial components.
Sansiri will also develop a 258-unit Standard hotel branded condominium in Hua Hin.
Thai-listed group Sansiri is the major shareholder of the global Standard International hotel group.
On the Thai resort island of Phuket, the Chergtalay, Laguna, Bangtao area is rapidly attracting institutional real estate investment with Sansiri and Central bringing a new set of property projects to the booming property landscape.
The resort island of Bali continues to be one of the world’s most desired holiday destinations. Over the past three decades, its resort real estate market has continued to evolve and change. Though, for branded residences, both in the lead-up and period after the global pandemic it has lagged behind other key Southeast Asian leisure markets such as Thailand and Vietnam.
Reflecting on legacy, economic transmigration, and the Zoom Boom, C9 Hotelworks has taken a dive with their new joint report with Horwath HTL titled Bali Hotel and Branded Residences 2023 report. To read and download the report CLICK
Be Well Medical Center is set to open a new facility in Blue Tree Phuket.
The Be Well brand has established an operation in Hua Hin already, it will be family oriented and serve the growing nearby Cherngtalay, Laguna, Layan, Surin, and Thalang areas.
Limited emergency care will be available and will be open daily.
With a rising population in Phuket and growth in real estate and tourism, accessible quality medical care is a key demand driver, close to nearby growing residential and tourism areas.
The project will feature a hotel with 432 rooms and 131 luxury villas and is set to open by 2026.
A management deal has been inked with La Vie Hotels and Resorts as white-label operators for the YOO2 Hotel and YOO villas.
In a notice to the Thailand Stock Exchange (SET) World Corporation received approval for the land acquisition of 52 rai (8.3 hectares) for THB1.8 billion.
The search for the next big resort destination in Thailand is an absolutely big ask. An expansive country with 77 provinces and an amazing array of diverse geographical locations, Instagram-worthy aspects, and distinctly different nuances. Out of this brazen travel chaos, the endearing term ‘same same, but different’ was born and remains highly relevant.
Yet, one of the simple truths of emerging destinations remains the adage “you can’t stay there if you can’t get there”. Potential is one thing but reality bites when getting to it is just too painful for words. Here in Thailand, one of my favorite places is Koh Samui. It marches to its own drum beat, and the vibe is undeniable. Still, access is never easy, the cost to get there is on the high side, and options for access are limited.
Scanning the Gulf of Thailand, other bohemian beach islands including Koh Chang, Koh Tao, and Koh Phangan all are lovely but suffer a similar challenge, limited transportation access. The search for a modern-day Robinson Crusoe can’t be this hard? Or can it?
The search for azure blue seas stretches of long white sand, and coconut-lined beaches brings me to Khanom. For so many travelers the mention of the name draws a blank stare and the perfunctory ‘where’? Set on the Southeastern Coast of Thailand’s mainland between Surat Thani and Nakhon Si Thammarat. On a clear day, you can see Koh Samui and the famed five islands on the horizon.
Perhaps the cherry on top for Khanom, is that it offers the same stunning beaches as Koh Samui but being on the mainland is a far simpler proposition for a holiday or second home. Drive-to destinations in Thailand during the pandemic and after have been a boom for travelers, and are now an even stronger draw card for hotel and real estate developers. Look at the success of Khao Yai and Hua Hin where nature, space, and accessibility are key ingredients in the mix.
One of preferred demand generators when evaluating resort destinations is airlift. Simply put, the magic carpet effect. Khanom is easily accessible to Surat Thani International Airport and Nakhon Si Thammarat Airport where Thailand’s Department of Airports (DoA) has upgraded infrastructure to double capacity.
Stepping back and looking at property in the area, there is still access to larger land parcels. According to leading Thai property portal FazWaz, investment-grade real estate opportunities with reasonable land cost basis reflect pricing of early stage development.
Based on C9 Hotelworks’ ongoing analysis of Thailand’s resort residential markets, a defined shift back to end-users and urge in second or holiday-home buyers has pushed the sector to the beginning of a new cycle. This signals an uptick in growth but unlike more developed markets like Phuket, Hua Hin, or Koh Samui with prime land parcels soaring, Khanom offers an accessible beach destination with considerably lower underlying land costs. It has airlift, and a well-developed road network.
Taking a final look at Khanom, one of the key success factors in a resort location is DNA and aspect. The memorable views of the nearby outer islands in the Gulf of Thailand give a strong sense of place. Moreso, the nature in the area is amazing, highlighted by an abundance of pink dolphins. If you want wow, you got it. Coming out of the pandemic the pick-up in demand for lifestyle properties is going in a single direction and that’s up. If you haven’t been to Thailand’s Southeastern coast, there is no better time to visit than right now.
One of the most notable transformations for both domestic and international travelers in Thailand post-pandemic has been the realization that the old-school beach holiday stereotype is out the window. Rivers, mountains, farms, or even a jungle trek are now the hot ticket. For those who went to the just-wound-up Wonderfruit, you’ve already caught the vibe, and it won’t go away.
One of the latest destinations in Thailand that are buzzing is Khao Yai. A quick two a half hour drive from Bangkok, it can best be summed up as a ‘drive in’ getaway. Moving into the adventure zone, or going back to nature is also about escaping the four walls of a traditional cookie-cutter hotel, complete with those miniature umbrella-topped welcome drinks.
Set to the tune of a road trip soundtrack, it’s high time to admire the great outdoors with a visit to Marasca Khao Yai. This is a new boho-chic getaway with a tasty collection of 18 glamping tents, glamper suites, villas, and one very, very cool glamper van.
If you want space, you got it. Nature, a posh little bolt hole in the woods and next to the stunning World Heritage registered Dong Phayayen–Khao Yai Forest Complex. Complete with hiking and biking trails, it’s a place to try and get lost in (and hopefully found). Wander by a waterfall and, indulge in the cool weather. So cool in fact, you might want to light up that personal firepit or dive into your wooden hot tub at the Marasca.
Meanwhile back to the mountain chatter, another red-hot escape is the spanking new Intercontinental Khao Yai Resort which was designed by the creative icon Bill Bensley. This is a thematic-styled outing and homage to travel by rail. It’s romantic, has flair with all the mod-cons, and definitely goes over the top as only Bensley can.
Taking a step ahead is a fast-developing trend in the area, the country home property market. Bolstered by the ‘Zoom Boom’ and work-from-home shift, city-weary Bangkokians are increasingly buying or building estate homes in the area at a frenzied pace according to leading Thai online real estate marketplace FazWaz.
For Thailand’s adventure set, another top journey out of the box and into the tent is the 9 Hornbills Tented Camp on Koh Yao Yai Island in Phang Nga Bay. A quick trip from Phuket International Airport to the Ao Po Grand Marina and a chance to unwind on a scenic boat trip lands you at one of the country’s most picture-perfect locations. Small, intimate, and stunning views of the famed Bond islands create a fine opportunity to reconnect with nature.
With glamping now coming into more and more Thai holiday destinations, one of Asia’s best glamping tent and fit-out suppliers is Bali’s Escape Nomade whose motto is aptly summed up as ‘Living Without Walls’. Their designs, quality, and attention to detail are world-class.
With that, I have to get back to tending my firepit at Marasca, a name that means ‘cherry on top’, Now if I can just find a bottle of single malt scotch, I have a sky full of stars to gaze up at, and no box in sight.
This article also appeared in TheThaiger