Samui Residential Market Report H1 2010


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Samui Residential Market Report H1 2010. Supply, new launches, trends in Samui market.

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Samui Residential Market Report H1 2010

  1. 1. 1h 2010 | residentialthailandSamui ReSidential RepoRt Condominium & Villa ExEcutivE Summary Condominiums are fast becoming part of the landscape in Samui after the first units were supplied in 2007. there are now nearly 340 units as of H1 2010. most existing and future condominium developments mostly cater for the high end market, although others are more modest in scale and affordability.markEt indicatorS the majority of residential units are used in one way or another to cater to the hospitality industry as the nature of the island makes this an attractive option for buyers seeking to generate income. 2h 2009 1h 2010 many villa projects remain on hold for financial reasons after the global downturn and thailand’s Supply domestic political woes over the past eighteen months. launchES Villa developments are expected to continue to be supplied in the next few years, especially in the pricES Bo phut and Cheong mon area.
  2. 2. saMUi residential rePOrt | 1H 2010 | Condominium & Villa Zoning bungalows. nightlife in Chaweng is very popular Bang Po: Bang po beach is located on the due to the wide assortment of restaurants and northwest of Samui and contains very limited bars. there are a limited number of residential accommodation, however this is set to change projects in the area, as it is mostly occupied by over the next few years. there are few tourists hotels, restaurants, bars and shops. and shopping facilities in this area although a number of restaurants operate. lamai: this area is comprised of lamai beach and Hua thanon beach. lamai is the second Mae nam: mae nam beach is located in the longest beach on Samui, and although lamai is north of Samui and there are many 4 - 5 star smaller than Chaweng it also has a number of hotels and restaurants along the road and luxury hotels and high quality eating and beach. drinking establishments as well as guesthouses for backpackers. Bo Phut: this area contains the widest variety of facilities and real estate on the island. Visitors south Coast: the South Coast beaches are can find the fisherman’s village, mid-range to amongst the least developed part of Samui with upmarket restaurants, cafes and bars, luxury only a few resorts along the beach, so these hotels to budget guesthouses and residential places are peaceful and suitable for relaxation projects. and where you can find local seafood restaurants. Cheong Mon: Cheong mon is located in the northeast of Samui. this is the most popular West Coast: this area is comprised of nathon area for residential projects on Samui. this beach, lipa noi beach, taling ngam beach to area is not far from airport, and many foreigners thong tanote beach. the Ferry pier and local choose to live here as it is a relatively tranquil government offices on Samui are located in location nathon beach, so this area is very busy in the day time; meanwhile in taling ngam the area is Chaweng: Chaweng is the most well known very quiet. and longest beach on Samui, and accommodation ranges from 4 – 5 star hotels to budgetCOLLIERS INTERNATIONAL | P. 2
  3. 3. saMUi residential rePOrt | 1H 2010 | Condominium & VillaSamui condominium markEt currEnt Supply, h1 2010 Source: department of land, Colliers international thailand Researchmany residential projects on Samui are small in project in Samui was registered in 2007, andnature and some of them are not officially since then the figure has grown every year,registered at the department of land, due to a especially in 2009 with around 150 unitsnumber of them planning to change from completed and registered. For the first half ofresidential use to that of hotel. therefore the 2010 around 60 units were supplied andnumber of condominium units listed here may approximately 330 units are scheduled to bebe slightly less than the real figure. completed for the whole of 2010.the average unit per project on Samui is just30, due to some projects on the island onlyhaving 7 – 8 units. the first condominium By location Source: Colliers international thailand Researcharound 64% of condominium project units on in the next few years condominium projectsSamui are located in the Bo phut area; Bo phut will pan out from Bo phut to the surroundingis not far from the airport and has its own beaches, such as mae nam, Cheong mon andnightlife area as well as being close to Chaweng. Bang pothere are also many retail outlets in this area. COLLIERS INTERNATIONAL | P. 3
  4. 4. saMUi residential rePOrt | 1H 2010 | Condominium & Villa FuturE Supply cumulativE FuturE Supply SchEdulEd to BE complEtEd during thE yEarS 2010 – 2012 By location. (aS oF h1 2010) Source: Colliers international thailand Research Cheong mon is the new area for condominium for new condominium projects in the Bo phut projects in the years 2011 – 2012 with area therefore no new supply is due in the next approximately 230 units scheduled to be couple of years. lamai and the West coast will completed by 2012. Bang po also has 140 new see the first condominiums rising this year. units that are scheduled to be completed in 2012. there is a lack of supply of land suitable takE up ratE takE up ratE oF all projEctS in thE markEt, aS oF h1 2010 Source: Colliers international thailand Research the take up rates in Bo phut and Chaweng are phut area there are nearly 220 condominium higher than in other locations, this is due to units, while Chaweng has around 60 units. these areas being not far from the airport and although Cheong mon is not far from the equipped with various facilities, such as airport; due to limited facilities and high prices restaurants, hypermarkets, convenience stores, for units here, the take up rate is considerably hospitals and entertainment. However in Bo lower.COLLIERS INTERNATIONAL | P. 4
  5. 5. saMUi residential rePOrt | 1H 2010 | Condominium & VillapricE SElling pricE oF total projEctS on Samui SElling pricE (thB / Sq m.) ZonE min. max. avg. Bang po 33,500 146,000 113,375 maE nam 39,500 80,000 59,750 Bo phut 40,000 67,000 53,500 chEong mon 52,000 130,000 80,717 chawEng 55,200 99,000 77,100 lamai 34,500 35,800 35,150 South coaSt 120,000 125,500 122,750 wESt coaSt 154,500 156,500 155,500 average PriCe 69,886 110,400 92,049Source: Colliers international thailand Research avEragE SElling pricE oF total projEctS on SamuiSource: Colliers international thailand Researchprices differ based on location in terms of units by the beach while lower rates can bebeach access, road access and attractiveness found in other zones due to the units beingof the area. the West Coast is based on limited located some way from the so may not be a good indicator. themore expensive locations contain condominium COLLIERS INTERNATIONAL | P. 5
  6. 6. saMUi residential rePOrt | 1H 2010 | Condominium & Villa Samui villa markEt note: this report consists of research in regards to multiple villa developments. individual villas are excluded. currEnt Supply By yEar, h1 2010 Source: department of lands and Colliers international thailand Research Samui is a newly emerging residential location cases the data is not included in the report. in thailand. the first residential projects in Samui, especially in the housing or villa market Some developers sell off plan and then base started in 2004. Before that time development their financing on payments from buyers. Some consisted of only individual villas. have little experience in real estate and there have been examples of projects being suspended the average number of units per project is less due to poor project financing and planning. this than 20 and some consist of only 2 – 4 units. has plagued the residential market in the past the villa market is still in its infancy and appears but there are signs of growing maturity. quite volatile to the fluctuations of the market. Some developers build only one villa at a time additional supply in H1 2010 amounts to nearly and future building has been put on hold, others 100 units, so the total number of villa units in consist of one villa only but the size is usually Samui is approximately 350 units in the first so substantial that the developer will give it a half of 2010. name in order the market the product. in theseCOLLIERS INTERNATIONAL | P. 6
  7. 7. saMUi residential rePOrt | 1H 2010 | Condominium & Villa currEnt Supply By yEar, h1 2010 Source: department of lands and Colliers international thailand ResearchBo phut is the most popular location for the taken hold in relatively sparse locations such asresidential market although more in terms of mae nam, Cheong mon and the West Coastcondominiums than villas. this is due to compared to the relatively small condominiumrelatively convenient transport and access to a growth. these areas have significant landwide range of restaurants and family available for landed property compared to theentertainment facilities. Villa development has busier Chaweng zone for example.FuturE Supply cumulativE FuturE Supply SchEdulEd to BE complEtEd during thE yEarS 2010 – 2012 By location. (aS oF h1 2010)Source: Colliers international thailand Researchmore than 440 units are scheduled to be 100 units or approximately 25% of total arecompleted in 2012 and 165 units or around scheduled to be completed in 2012.37% will be completed in 2011.the developers are interested to develop villaprojects in the Cheong mon area, more than COLLIERS INTERNATIONAL | P. 7
  8. 8. saMUi residential rePOrt | 1H 2010 | Condominium & Villa takE up ratE thE takE up ratE oF all projEctS in thE markEt, aS oF h1 2010 Source: Colliers international thailand Research the take up rate in the West Coast area is the north part of West Coast area as these around 60% higher than in other locations, areas are not far from the airport and close to followed by Cheong mon and Bang po areas various facilities, such as restaurants, with approximately 48% and 32% respectively. hypermarkets, convenience stores, hospitals Villa projects in the West Coast area shown the and entertainment venues. highest rate, but most of the units are located in rESidEntial dEmand drivErS Flights most people enter Samui from the air. it is transferred. this makes the island more possible to take a ferry but this is time consuming susceptible to the political dramas in Bangkok for all but budget travelers and they are more as evidenced by the airport blockade and april likely to use Samui as a springboard for Koh /may riots in 2010. it also deters travelers from phangan. Samui suffers from a limited number visiting from Bangkok and using Samui as a of direct international arrivals and domestic second home due to the high ticket prices. this flights from Bangkok are prohibitively expensive means that developments are more focused on when compared to those of other resorts. the high end market. the upshot is that many international visitors will have first arrived in Bangkok and then internal transport Great strides have been made in the road making navigating the roads difficult. the recent system on Samui over the past few years but improvements to the road have also had an the island still suffers from a lack of adequate adverse effect in that car drivers and motorbike infrastructure especially during the rainy riders are going much faster and accidents, season when flooding can seriously effect often fatal, are commonplace and negatively traffic. also the island suffers from poor signage affect the image of the island.COLLIERS INTERNATIONAL | P. 8
  9. 9. saMUi residential rePOrt | 1H 2010 | Condominium & VillaGrowth of retailthe emergence of a strong retail sector on the destination due to the handiness thatisland has meant that Samui has become a hypermarkets down to the convenience storesmore attractive residential and holiday provide.entertainmentthe Samui experience is one of chilling out and its growing focus on family style theme parks.relaxing during the day and enjoying the However from a western perspective this is torestaurants and partying at night. this is its advantage as many are repelled by a moreappealing to western travelers but less so to the disneyland approach and will seek out a laidasian market where daytime entertainment back resort area. this means that the Samui’sfacilities are a more significant attraction in a growth is taking another direction to the otherholiday. this puts Samui at a disadvantage resorts.compared to phuket but especially pattaya, with COLLIERS INTERNATIONAL | P. 9
  10. 10. saMUi residential rePOrt | 1H 2010 | Condominium & VillatouriSm viSitorS BookEd into hotEl roomS in Samui By quartEr Colliers international thailand Research Source: office of tourism developmentin Samui, tourism is the key driver of residential again at the end of 2009. although the last are prohibitively expensive compared withreal estate in terms of buyers often being quarter was relatively tranquil for thailand as a flights to phuket and deters less well heeledreturning tourists wishing to invest in property whole, Samui was affected as many travelers visitors. this means more development in theand the end users of these products utilizing the book their holidays months in advance and so luxury end of the market and the lack of masshotel function. the effects of traumatic events are felt a long tourism bestows Samui with a more exclusiveCondominium and villa usage is different from time after. this can be seen by the sharp appeal, reinforced by the limit on high risethat of Bangkok in that the majority of units reduction of tourists from mainstay markets in construction. it is partly for these reasons thatfunction as hotels or even serviced apartments europe during this time. the island hosts a number of specializedand as such developers have sometimes altered wellness resorts such as Kamalaya Koh Samuithe design to reflect this with facilities expected there are few countries that dominate the while other resorts offer a strong wellnessin a hotel or serviced residence. owners often market as visitors come from a wide range of component. this is a growing and lucrativecan offer their units into a pooling system with countries and the thai market is relatively small niche which could also be developed to take intoapportioning of revenue based on unit size. as compared to other resorts, although this group account the burgeoning number of retirees frommany owners use their units infrequently this has bucked the trend in Q2 2010 by actually europe, Japan and the uSa.system offers flexibility and a good potential increasing from the previous quarter. this wasrate of return. However the residential market is due to Bangkokians escaping the disturbingtherefore dependent on the vagaries of the events in their city and time will tell if this growthtourism market and the recent protests and can be sustained.rioting in Bangkok have affected the market. Samui is also limited by the number of flightsthe airport blockade brought tourism to an allowed in at the airport and its reliance onalmost standstill at the end of 2008 as most domestic flights. the short runway means thatvisitors use a plane to come to the island and so large wide body jets cannot be accommodatedthis event dramatically affected arrival numbers. thus restricting direct flights from europe whichRecovery was strong after the blockade but fell use such longer range aircraft. domestic flightsCOLLIERS INTERNATIONAL | P. 10
  11. 11. saMUi residential rePOrt | 1H 2010 | Condominium & Villaoutlookdue to it being an island and an expensive one to reach, the opportunities for the development of Samui are limited compared to other resorts inthailand. this may be no bad thing as many living in Samui are there for that very reason and do not wish the island to be awash with new projects.there are also concerns about the water supply being adequate for future supply. these limitations mean that Samui can grow not necessarily interms of quantity but rather quality with the emergence of higher end projects with eclectic designs that fit into the natural structure of the islandrather than deflect from it.the residential market in Samui is greatly dependent on the tourism market as most projects have a hotel/serviced apartment component. potentialbuyers will be keenly aware of the ups and downs in the Samui tourism market as visitors provide the mainstay of income on most properties.therefore the market is likely to remain volatile while thailand is mired in political uncertainty and the global economy teeters towards anotherrecession. COLLIERS INTERNATIONAL | P. 11
  12. 12. saMUi residential rePOrt | 1H 2010 | Condominium & VillacolliErS intErnational thailandmanagEmEnt tEam 480 offices in 61 countries onpRoJeCt SaleS & maRKetinG 6 continentsWasan Rattanakijjanukul | manager united States: 135 • $1.6 billion in annual revenuenukarn Suwatikul | manager Canada: 39 • 672.9 million square feet under latin america: 17adViSoRY SeRViCeS management asia pacific: 194napatr tienchutima | manager emea: 95 • Over 10,000 professionalsoFFiCe & induStRial SeRViCeS / Retail SeRViCeSnarumon Rodsiravoraphat | Senior manager COlliers internatiOnal thailand:Real eState manaGement SeRViCeS Bangkok OfficeViroj piromthong | management advisor 17/F ploenchit Center,Bandid Chayintu |associate director 2 Sukhumvit Road, Klongtoey, Bangkok 10110 thailandadViSoRY SeRViCeS | HoSpitalitY tEl +662 656 7000Jean marc Garret | director Fax +662 656 7111 Email SeRViCeS Pattaya Officenukarn Suwatikul | Senior manager 519/4-5, pattaya Second Road (opposite Central Festival pattaya Beach), nongprue,ReSidential SaleS & leaSinG Banglamung, Chonburi 20150patima Jeerapaet | managing director tEl +6638 427 772 Fax +6638 427 772ReSeaRCH Email info.pattaya@colliers.comantony picon | Senior managerSurachet Kongcheep | managerValuation & adViSoRY SeRViCeSnicholas Brown | associate directorphachsanun phormthananunta |managerpattaYa oFFiCemark Bowling | Sales manager rESEarchEr: rESEarchEr:Supannee Starojitski |Business development manager thailand thailand antony picon Surachet Kongcheep Senior manager | Research manager | Research Email Email this report and other research materials may be found on our website at Questions related to information herein should be directed to the Research department at the number indicated above. this document has been prepared by Colliers international for advertising and general information only. Colliers international makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. any interested party should undertake their own inquiries as to the accuracy of the information. Colliers international excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. Colliers international is a worldwide affiliation of independently owned and operated companies. accelerating