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Few resort sales amid booming Phuket hotel business

By on Jul 20, 2012 in Property News

The hotel business in Phuket is booming as tourists flood the island, but sales of resort properties have failed to benefit, according to CBRE Research’s “Phuket Property Report”.

“Despite healthy increases in tourism arrivals, CB Richard Ellis is not, for now, seeing a proportional increase in sales in the resort property market. The rising tourism numbers are mainly from Asia, whose tourists have yet to become resort-property buyers,” David Simister, chairman of CBRE Thailand, said yesterday.

According to the report, Phuket welcomed 594,999 local and 730,667 foreign visitors in the first quarter of this year. Despite the global economic uncertainty, tourism continued to grow, with the expansion coming from Australia, China and Russia.

The first-quarter average occupancy rate improved to 82.7 per cent from 80.5 per cent in the fourth quarter of last year. High-end hotels were the best performers. with average achieved room rates of Bt22,835 for luxury hotels, up 6.8 per cent on year, and Bt7,425 for first-class hotels, up 5.0 per cent.

Currently 13,171 rooms are in 83 existing upscale hotels and 5,471 are under construction in 30 hotels due for completion by 2014. The new supply is not confined to the west coast, but shows a wider geographic footprint including Koh Siray, which is east of Phuket Town on a peninsula.

The overall resort residential market remains solid on values, but quiet in terms of new launches of both villa and condominium projects. Developers have focused on clearing inventory. Notable launches are the Malaiwana condos and beach club, a luxury product that is part of a larger successful villa development with an average price of Bt80 million, and the Vertigo Villa project on Surin beach with prices ranging from Bt60 million to Bt90 million.

A new residential market has emerged – non-beachfront, non-resort condos – developed by Bangkok listed developers such as Sansiri and Supalai. New off-plan projects have been successfully selling condos inland aimed at local island residents. They are mainly studios with 29-37 square metres of space and an average price of Bt1.5 million. It remains to be seen how deep demand is in this sector and what else may come to the market, CBRE says.

Based on the company’s survey in the first quarter, 60 resort villas were sold. Sales were spread across all price ranges. CBRE segments the villa market into below Bt15 million, Bt15 million to Bt35 million, Bt36 million to Bt90 million, and over Bt90 million. Villas below Bt15 million made up half of sales, but at the top end, two sales were recorded in excess of Bt120 million.

The Sava across the Sarasin Bridge in Phang Nga province has reportedly sold all seven villas at prices ranging from Bt62 million to Bt180 million, three of which were sold this quarter.

In the resort condo market, 84 units were sold. Sales were concentrated in five projects where the main sales were one-bedroom units with an average price of Bt5.9 million. There are about 3,700 completed resort condos in Phuket.

By comparison, Pattaya has 22,000 completed condos and 21,500 under construction. The main product in Pattaya is a one-bedroom condo worth between Bt2 million and Bt3 million.

“Over time repeat tourists will create fresh buying demand and new product will emerge to match their requirements. The quarterly report is essential reading for anyone involved in hotel and residential developments in Phuket,” Simister said.

source : The Nation 20 July 2012

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