Cover story in Property Report Thailand in which I am included.

1. Enduring appeal http://www.property-report.com/thailand-property-magazine...
Latest issue Property Report Thailand - January 10 - Features
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Greg Lowe discusses the present state and future prospects for the property market in the
resort tow Bed : Any or more
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While Phuket and Pattaya´s property markets have boomed over the past few Country: Any
years, with high-rise condominiums and luxury villas projects dotting the Region: Any
respective landscapes, something more moderate has been taking place along
the Gulf of Thailand´s western coast. Area : Any
>> Digital Magazine
Hua Hin, which was established as the country´s first beach resort by King Rama
VII in the 1920s, has been undergoing its own cycle of growth. But unlike the
Property Report TV breakneck pace of construction at the more popular, better-developed seaside
destinations, on the surface the town´s property sector appears to be something Luxury Property Search
of a slow-burner.
Country:
Property experts say this helps create a more sustainable market. While the
Anywhere
town has not experienced the boom of its cousins, the risk of any corresponding
bust is much reduced. A less developed infrastructure and longer travel times
from Bangkok has created a smaller but more loyal stream of tourists and Area / City:
buyers. Anywhere
Thailand Property Awards 2009
Archive VDO Hua Hin´s royal connection, first established by Rama VII and cemented by the City:
current King Bhumibol Adulyadej, brings with it not only a certain cachet but also
greater security and building restrictions that effectively preserve the town´s
Asia Photo Gallery beach front and overall ambiance.
Price:
“Hua Hin has seen a boom in terms of new supply and overall growth in the last USD
four to five years,” says Robert Collins, Managing Director of Savills Thailand.
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“When compared to Pattaya, Hua Hin has not witnessed an equivalent level of new
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supply or project delays, which ensures Hua Hin has a consistently more positive
outlook.
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“All of the resort markets in Thailand were very subdued during 2009 without
exception, so the relatively slow trading conditions at present in Hua Hin are in
line with the current trend.”
Hua Hin lacks the offerings of well known international schools and world class
hospitals and medical facilities that can be found in Bangkok, Phuket and Pattaya.
Singapore clarifies chan... This impedes foreign interest in the destination to a great extent, but it also adds
Malaysia’s Optimis... to the town´s provincial appeal, says Antony Picon, Senior Manager for Research
In Retrospect: 2009... and Advisory at Colliers International Thailand.
Malaysian expansion for ...
Australian property mark... “Foreigners are attracted to the alternative attractions this more sedate town
offers and there is increasing activity in the condominium and hotel sectors from
both Bangkok residents and foreigners,” he says. “In fact, from 2002 to 2008
eNews Sign-Up tourist arrivals have nearly doubled to about 1.43 million visitors, with Thai
visitors making up 60 per cent of that figure. This represents a greater percentage
increase than Pattaya, where tourism numbers grew by 62 per cent from 2002 to
RSS FEED 2008, albeit from a far larger base.
“Phuket’s tourism figures have declined due to the tsunami and Hua Hin has likely
been a beneficiary of ongoing concerns of holidaying in the Andaman Sea, despite
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Phuket still having a greater number of visitors.”
Please Select Europeans are the dominant foreign contingent in Hua Hin. Scandinavian visitors
accounted for nearly 44 per cent of all foreign visitors to the town in 2008, he
says.
Conference & Events Despite, or perhaps because of, this influx of both Thai and foreign tourists and
buyers, local authorities have acted to prevent the proliferation of eyesores and
towering beach front developments.
No property can be built within 20 metres from the beach. Only six-metre-high
structures can be built in the next 30 metres. This doubles to 12 metres with a
maximum gross floor area of 2,000 square metres in the next band that extends
back 150 metres. For the next 150 metres the limit is less than 12 metres high
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2. Enduring appeal http://www.property-report.com/thailand-property-magazine...
Phuket Internaitonal Boat Show and below. Within 700 metres from the beach, no building should be above 23
07/01/10-10/01/10
contact metres, typically about seven to eight storeys.
22nd House & Condo
18/01/10-21/01/10 “The upshot of these restrictions is the development of small but spacious luxury
contact condominiums and villas along with low-rise luxury boutique style hotels with an
International Property Show - emphasis on high quality and original design features spread out along the beach
Dubai front, targeting wealthy Thais and Europeans,” says Picon. “The second market
02/02/10-04/02/10
contact falls outside the 700 metre restricted zone with higher-rise condominiums
targeting the mid-end market of middle class Thais looking for a weekend retreat
Fractional Summit 2010 (UK)
18/02/10-19/02/10 as well as European retirees.
contact
Asia GRI 2010 Singapore “In many ways the beach front of the Hua Hin corridor has emerged as a niche
03/03/10 resort market.”
contact
Collins says the town´s geography – a deep oblong shape –is another key factor
Green Buildings China 2010
23/03/10-24/03/10
that has influenced development. “This design configuration has led to the
contact common theme for new developments and is one of the main factors shaping
Malaysia Law & Property Law 2010 development in the area,” he says.
23/03/10-24/03/10
contact The town is home to a number of high-end resorts such as Chiva Som, Six
Shorex Wealth Management Forum Senses, AKA, Hilton, Anantara and Centara. The InterContinental Hua Hin Resort
21/04/10-22/04/10
contact
opened in December 2009 and is the latest addition to the local luxury hotel
market.
The number of hotel rooms has risen by nearly 56 per cent from 2002 to 2008,
according to Colliers International Thailand. An additional 500 hotel rooms will be
added to current supply in 2010. But the surge in new rooms will further pressure Property Awards
occupancy rates, which fell to about 50 per cent last November, in the near term,
says Picon.
The distance to Bangkok effectively nullifies the chance of any meaningful office
development in the area, says Picon. Prospects for commercial property also
remain limited – the town only has a population of about 85,000. The opening of
Hua Hin´s first large-scale mall development, Market Village, in 2006 leaves little
scope for other players. But community malls are expected to spring up in the
Cha-am and Pranburi areas, satisfying the needs of condominium residents and
tourists alike.
However, both major and independent developers have been increasingly drawn to
Hua Hin in recent years, building projects ranging from small boutique villas to Latest Issues
massive estate and condominiums.
Listed developer Sansiri has been one of the most active players in the local
market over the past two decades.
“Hua Hin is another locale that has gained in popularity in terms of a resort
destination,” says Uthai Uthaisangsuk, Executive Vice President for Business
Development and Project Development (High Rise). “This is evident in the town´s
rapid development and growth. Sansiri was the first developer to enter the >> Digital Magazine
market with the first condominium project called Baan Kaimuk about 20 years
ago.
“Today, Sansiri and its affiliated companies have more than ten different projects
in the area. For other developers who have started to enter the market in the past
one to two years, Hua Hin is not only a target for property development; it also
boasts many exquisite hotels and pool villas, as well as modern trend or lifestyle
indicators such as Villa Market and Index Living Mall, confirming its status as an
established resort town.”
>> Digital Magazine
Of the firm´s 10-plus local projects, seven are condominiums and only two, Baan
Nub Kluen and Baan Sansuk, are in the sales and construction stage. Baan Nub
Kluen targets A-grade customers in the second home segment, most of whom
are buyer-occupiers. The project is now more than 95 per cent sold, says Uthai.
While the town´s building restrictions makes the game tougher for developers,
the end result is a destination that offers an enduring appeal for a more discerning
buyer, he says.
“For beach front properties, we have to maintain a setback of about 200 metres
from the beach. This is required by law to maintain the beauty of the seashore.
We don´t see this as a restrictive or problematic because it is a well-accepted
regulation.”
The fact that the town cannot compete with Phuket and Pattaya in terms of beach
front condo and infrastructure is positive, says Sam Sheriff, Managing Director of
Manor Park One Co.
“Hua Hin is the Jack in a deck of cards, having maybe not the best of any one thing
but definitely having more than a fair share of everything when put together
makes it for those who live here or are regular visitors.”
To attract more foreign buyers, some developments such as Manor Park are
offering rental guarantee schemes for investors.
“Manor Park is a unique condominium project, where the idea from planning has
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3. Enduring appeal http://www.property-report.com/thailand-property-magazine...
been to build and operate it as a 5-star property," says Mr Sheriff. "The
apartments are furnished as such and the facilities provided by Club Manor are
unmatched even by the 5-star hotels.
"We offer a 7 per cent guarantee on the price of purchase and the owners get to
stay 30 days of the year for free. However, we are very flexible with our
contracting and owners can be accommodated if they wish to stay longer and in
different periods of the year."
The 112-unit development is scheduled for completion in late-2011. Scandinavia is
the target market, followed by the U.S., England, Germany, Hong Kong, India,
France and local Thais from Bangkok.
Sheriff says 46 units have been sold so far, with a few sales made in the past two
months, but the impact of global recession still weighs heavily on buyer
sentiment.
“It is difficult at the moment, but we are hopeful that the start of the high season
will bring more tourists and will improve sales,” he says.
The developer is currently engaged in another project nearby, the Rachawadee
Beach Resort, but the current economic slump has delayed construction.
“We have just started a beach front resort in Khao Tao, 12 kilometres south of
Hua Hin,” says Sheriff. “We are building nine beach-front villas, 150 apartments
and a 5-star hotel with 100 rooms.
“Construction on villas has already started but we have delayed the start of the
apartments and the hotel for a year due to the market situation. Once we feel
that the market is improving, we will start with the construction immediately.”
In terms of other development in the area, brokers say all the prime land plots in
both Hua Hin and Cha-am to the north have already been bought and developed.
Other areas, such as Khao Tao and Khao Takiab, offer more affordable
development opportunities and are near enough to Hua Hin town to remain highly
attractive to foreign buyers.
But in the medium- and long-term, any major development will need to push
further south, says Collins. “Cha-am has a mature development community and
will continue to develop alongside Hua Hin over the next few years,” he says.
“Pranburi shows huge potential, however until the backlog of unsold property is
realized, any new locations will take time to gain momentum.”
Hotel and resort developers share the view that Hua Hin´s popularity is now
fuelling a fledgling market further down the coast.
“Hua Hin is just one of many districts in Prachuab Khiri Khan province such as
Pranburi, Kui Buri and Thab Sakae,” says Supakorn Kijkanakorn, Managing
Director of Kij Development Group, the developer of the Aleenta Resort & Spa
Pranburi. “Hua Hin has enjoyed long period of property boom for years and has
become overdeveloped far more than Cha-am and therefore development has
grown southward toward Pranburi and other coastal towns in the same province.”
Despite the longer travels times, tourists from relatively untapped markets are
now starting to visit the area, according to a spokeswoman for Astudo Hotel &
Resort Group, developer of the X2 Kui Buri resort, who said last year saw a surge
in arrivals from Japan, France and Holland.
But for the next few years most development will remain centred around Hua Hin
itself. The area´s more organic growth will provide the foundations for a
sustainable market targeting medium- to high-end local and foreign investors,
experts say.
“Developers see a rosy mid- and long-term future for the Hua Hin corridor due to
expected growth in European retirees from the baby boomer generation, and from
Thais wishing for a holiday home or investment property,” says Picon. “A robust
supply is likely to absorb robust demand in the next ten years in the high and mid
end sectors of the market.”
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