Express Overseas Property
The chances are that if you read about Thailand recently, it wasn’t the property market under discussion, but the military coup. By Ginetta Vedrikas
Tanks rolled into the capital, Bangkok, last month as the Royal Thai Army overthrew Prime Minister Thaksin Shinawatra’s government. The tanks may have gone and an interim Prime Minister has been appointed, but martial law remains throughout the country. So is it too risky to invest in property in Thailand?
Jonathan Salisbury, of international estate agents Colliers CRE, said: “People go in with their eyes open. You are not buying in Surrey – but that’s part of the adventure and part of the potential return.
“Perversely, the fact that Thailand has had 17 coups since 1983, and all of them peaceful, has in some way given the country a degree of reassurance.”
To prove this point, sales of Colliers’ two projects in Thailand have been totally unaffected. One client, 48-year-old Anne Kingsley, from Cheshire, is going ahead with her purchase of a two-bedroom thatched pavilion at a new resort in Hua Hin, two hours south of Bangkok.
Hua Hin happens to be the home of Thailand’s long-standing constitutional monarch King Bhumibol who has had a summer palace there for many years. The King is said to be fully behind recent events.
“Hua Hin is very peaceful and not overly crowded,” said Anne. “I was slightly worried when I heard about the coup, but I don’t believe that the Thais would do anything to seriously jeopardize tourism. They are also very reverent towards their King.”
Anne has family in Australia and intends to use her Thai property as an occasional halfway meeting point, but her main incentive for buying was the rental returns.
Prices at Guti Kiri range from £125,000 to £175,000, with returns estimated at 8 to 12 per cent.
Six per cent is guaranteed for five years – this is usually built into the selling price – if owners opt for the villa rental programme, which gives them 30 days use each year.
Mr Salisbury said: “We anticipate strong international demand for property at Guti Kiri. Many wealthy Thais treat the area as a weekend escape from Bangkok and want a nice place in a spa resort.”
After the tsunami of 2004, Thailand’s main tourist destination, Phuket, has now fully recovered and investors, particularly at the top end, are buying into the crop of new developments springing up on the island.
The TGR Group is marketing Barama Bay, an untouched private island development off the northeast coast. Sales manager Anthony Franklin, claims that not a single buyer has questioned the development’s future since last month’s coup. He said: “People who are investing at this level are investment driven. They spend a lot of money on legal advice and none have been advised of any untoward risk.”
Barama Bay is being touted as the most exclusive resort in Asia. Thirty-one plots are for sale, priced from £3 million and all have stunning sea views. Along with a new marina, spa and wellness centre, the island will also have a six-star hotel built by the Jumeirah Group, best known for its Dubai ventures, including the luxury Burj Al Arab hotel. Jumeirah is still firmly committed to building on the island.
The region is also seeing investment from other top hotel groups, including Raffles, Four Seasons and the Shangri-La Group. The fact that some have confirmed new ventures since the recent events is reassuring.
Mr Franklin said: “Many companies view the coup in a positive light. Before, there was some uncertainty because the people weren’t happy with the last government, but the fact that it was peaceful and that it happened with the King’s blessing was vitally important.”
Barama Bay will undoubtedly appeal to anyone seeking privacy and seclusion. Phuket has a range of golf courses, international schools and a hospital besides its own international airport.
Barama Bay is a top-end resort, but it is possible to find properties at all levels of the market.
Further south, on Phuket’s eastern coast, The Village on Coconut Island is a collection of 148 two - to five-bedroom villas, all with private pools, overlooking 500 metres of white beach. Owners will be ferried from Phuket to the island by private water taxi and the development will contain bars, restaurants, shops, tennis courts and a spa and fitness centre.
Villas range from $350,000 to $950,000. So far, 60 per cent of the development’s first phase has sold and the recent opening of a new airport at Bangkok is expected to boost tourism and the property market.
The opening of the airport is momentous. It will improve Thailand’s accessibility and increase cargo handling to three million tons a year. It will also help secure the country’s position for tourists with a capacity for 76 new flights an hour and in turn it will almost certainly encourage further overseas investment.
