Phuket lures foreign investors

He has plenty of reason to back his saying, given Formula One champion Kimi Raikkonen's recent purchase of a villa at the Outrigger Serenity Terraces Resort in Phuket, which has been co-developed by Serenity Terraces and Outrigger Enterprises Group.

Serenity Development Group specialises in residential-resort development and has executed projects in North America, Europe, Asia, the Middle East and Africa. Serenity Development Group has brought together its experience, knowledge and funds along with top local and international consultants to develop the Serenity Terraces project in Phuket.

Hawaii-based resort operator Outrigger Enterprises has developed and currently operates 47 properties with about 12,000 rooms located across Hawaii, Australia, Guam, Fiji, Bali and Phuket. The company also operates and develops hotel properties and hospitality-related retail and real-estate opportunities for partners in Hawaii, the Pacific, mainland United States and Asia.

Phuket has been the destination of choice for foreign developers and investors. Research shows that more than 44 residential projects, where the average unit value is more than Bt2 million, have been launched in Phuket in the past five years, with 26 still in the planning stage or under construction.

According to the Lands Department, property transactions on the islands rose 32 per cent from the third to the fourth quarter last year, with a 59-per-cent increase in value.

Despite thier rising values, properties in Phuket are still only 25 to per cent to 40 per cent of the price of similarly styled properties in Europe, the US, Singapore or Hong Kong, according to Kasikorn bank.

Kasikorn said the prevailing global real-estate slowdown will only have a limited effect on the Thai property market.

Outrigger Serenity Terraces' developers estimate that about 70 per cent of units purchased so far have been bought primarily as investments, with 30 per cent being bought for personal residential use. Buyers have come from Finland, Denmark, Norway, Australia, the UK, South Africa, the US and the Middle East, with regional expatriates based in Thailand, Singapore, Hong Kong and China making up the rest.

The sector appeals to second-home buyers and retirees as well as those with an investment agenda.

Outrigger Serenity Terraces also offers a rental programme, guaranteeing investors 6-per-cent return a year on initial capital outlay, for three years. Under the scheme, owners will have 60 days usage of the property every year.

Research by Jones Lang LaSalle shows that Bangkok properties generate 4.8 per cent to 5.1 per cent of the initial purchase price per year, compared with 3.1 per cent in Hong Kong and 2.7 per cent in Singapore.

Apart from Outrigger, globally respected hotel and residential management companies such as Four Seasons, ShangriLa, Taj, Park Hyatt and Movenpick have also become part of the property scene in Phuket. All of them are currently involved in developing, selling and managing condominiums designed for the international market.