The resort, due to start construction next month comprises 14 one and two-bedroom villas with a starting price of USD 200,000 and a 10% guaranteed yield for 3 years. Song Saa Islands (Koh Ouen and Koh Bong) are located in the Koh Rong archipelago, Cambodia’s largest private island. The islands are accessible via a 30-minute boat ride from the Cambodia resort town of Sihanoukville, where an airport is now complete with domestic and regional flights expected to begin next year.

The success of Song Saa Island Resort marks the beginning of the international development of the Cambodian coastline and is the first project to target foreign buyers.

Song Saa has clearly demonstrated that there is a global interest for a quality product with professional management in this emerging location. The project has by far, exceeded sales performance of other Phuket and Samui properties.

The project offers a 99-year leasehold tenure, the best available ownership structure for foreigners compared to other resort markets in the region.

• Will the Cambodian coastline be the next Phuket?
• Is a 99-year leasehold structure in Cambodia preferable to a series of 30-year renewable leases in Thailand?
• Should Thailand extend its lease term to attract inbound foreign investments in a bid to compete with its emerging neighbour?

These are all questions that Thailand may have to answer going forward – what is your opinion?

Samui, Phuket’s boutique rival, has also experienced an inflow of visitors as the island’s accessibility has improved resulting from Bangkok Airway’s expansion. The airline now operates daily direct flights to Hong Kong and Singapore and twenty flights to Bangkok. Further growth is expected as higher capacity aircrafts are now able to land in Samui. THAI Airways planes will also be able to operate two daily flights between Bangkok and Samui and opening Samui Airport to two main carriers. The aircraft seat capacity on international flights is expected to rise by 62% to accommodate the increasing demand. This could produce over 2 million airport arrivals in 2008.

“The improved airlift in Samui will be a key factor in supporting the growth of its property market. CB Richard Ellis expects increased demand for homes here,” said Ms. Prakaipeth Meechoosarn, CB Richard Ellis Samui Manager. CB Richard Ellis remains confident in the long term prospects of the Thai resort property markets. In 2007, CB Richard Ellis opened two new offices in Samui and Pattaya as part of our plan to expand our resort property network throughout Thailand.

2007 land prices continue to rise although there were reduced numbers of individual transactions mainly due to the Foreign Business Act (FBA) uncertainty in Q1 2007. In Phuket, there were no significant changes in the number of completed land transactions, however transaction values from Q1 to Q3 2007 totaled an estimated of THB 6,900 million, a 6.7% reduction compared to Q1 to Q3 2006. A similar trend is reflected in Samui whereby the monthly average transacted value is estimated at THB 413 million in 2007, compared to an average of THB 450 million in 2006. Post election, reports of viewings and bookings of resort properties from our agency team shows a clear uplift in transactions.

Land price in Thailand’s coastal areas continues to grow unabated and indicate the strength of the market and long term prospects. The Treasury Department’s recent appraisal of land value shows that land prices in Phuket have increased on average a 160% in the past four years, with Samui prices following closely. Beachfront plots on Phuket’s west coast are transacting at THB 21 up to 50 million per rai, with the exception at Patong which has recently achieved THB 200 million per rai. Samui beachfront land prices are also trailing closely at THB 15 million per rai.

“There is sustained interest in the Thai resort properties market reflected through the ever increasing number of enquiries through our three resort offices. We are seeing more activity in Phuket this high season and our sales team is busy with closing sales,” said Ms. Charlotte Filleul, CB Richard Ellis General Manager – Resort Property.

Phuket’s property market is no longer confined to the regional market. The increasing focus on luxury developments has extended the island’s appeal to the global market. The growth of Phuket’s yachting and marina industry is a key part in drawing in the well-heeled investors and positioning the island as the yachting capital of Asia. Phuket now has a total of 800 yacht berths and five marinas. There are currently at least five luxury yachts cruising in Phuket this week.  The international lifestyle Phuket offers is clearly driving the growth of its luxury property market.

Out of the 124 villa projects actively marketing in Phuket, the high-end market (over USD 1 million) still accounts for less than 15% of the total supply. The supply of luxury villas is actually limited, but there is a growing number of projects on the drawing board which as they come to the market will offer more choices to buyers who are searching for their right property. CB Richard Ellis has at least 500 serious enquiries for property in the USD 2 to 5 million price range, where potential buyers have not yet found their ideal property.

The market has performed well at this end with little unsold completed properties. Cape Sienna on the Kamala shoreline is one of CB Richard Ellis’s most successful sole agent projects in 2007. All 10 villas have been booked prior to launch.  Saisawan on Bangtao beach is another unique villa project launching in 2008. Saisawan is designed to provide the ultimate beach lifestyle for the elite global market. The four bedroom villas feature a private 25 meter infinity pool, private gym and spa and a personal butler service. The development scores highly on all criteria- sunset views, absolute beach frontage, accessibility and design.

Phang Nga, part of Greater Phuket is also becoming an important centre of development as it is an attractive alternative to some of Phuket’s busy beaches. An increasing number of developments are being planned along this part of Andaman’s serene coastline, from Natai beach just across the Sarasin Bridge from Phuket and expanding up to Thai Muang. The beauty of the area and its proximity to Phuket International Airport are strong pulling factors for International and Thai investors who are banking on Phang Nga’s boom.

In 2007, CB Richard Ellis has completed three major land transactions in the Phang Nga area. A 193 rai site was acquired by Kingdom Hotels Investment through CB Richard Ellis for Raffles Resort and Residences. Other land deals completed include the Thai Muang Golf Course, one of the biggest transactions in the Phuket area this year. This vast 1,000 rai site will be re-developed into a mix-use resort.

“Phang Nga is a hot destination for investors this year. There are several prime sites still available and suitable for large scale resort developments at prices that are significantly cheaper than Phuket. Beachfront land in Phang Nga is priced in the region of THB 5 to 20 million per rai, depending on location and size. In Phuket, it is very rare to find a beachfront plot for sale as most prime sites are already occupied and developed,” said Ms. Khanitha Jarukirati, Associate Director of Investment and Land Services at CB Richard Ellis Phuket.

Samui is also catching up with Phuket in the luxury villas market. Whilst 70% of the villa supply in Samui is priced below USD 1 million, CB Richard Ellis is witnessing more developments launching in the USD 2 to 3 million price mark. As the luxury villas sector in Samui emerges, there is evidence that prices are moving to a level that is up to par with Phuket, at least for the top end of the market.

Another positive move for the Samui market is the entrance of professional local developers backed by foreign joint venture partners. Previously, many of the developers in Samui were smaller players and are often under funded. The arrival of international hotel brands such as W, Conrad, Four Seasons, and Park Hyatt is adding credibility to the island and attracting quality investors. Samui has been traditionally associated to a low key beach destination, however this is changing rapidly. 

In the coming years, CB Richard Ellis expects an increasing supply of branded residences. In Phuket, branded residences under development include Shangri-La Villas in Bangtao. Other developments in the pipeline include TAJ Exotica in Koh Lone, Park Hyatt and Capella in Emerald Bay, Four Seasons in Rawai and Dusit and Raffles Residences in Phang Nga. Samui is following a similar trend with the launch of The Estates at Four Seasons and Conrad Residences. One of Samui’s most exclusive developments to launch in 2008 through CB Richard Ellis is W Retreat and Residences with prices ranging from THB 65 to 205 million. Another branded residence under planning is Park Hyatt located in Thong Krut Bay.

Whilst there appears to be an influx of branded residences launching, in fact the volume each year is quite limited. The exclusive nature of branded residences often impose restrictions in the volume of unit and such projects demand a thorough design development phase, hence CB Richard Ellis does not expect all projects to hit the market at the same time period. With a steady flow of projects launching and a sustainable level of demand, the market is expected to perform well and absorb the new supply in the long term. The association of luxury brands to residences will also help strengthen Phuket and Samui’s position in the international resort property market.

Looking ahead in 2008, CB Richard Ellis expects a long term growth in the Thai resort property markets. The general election held on December 23rd 2007 marks the return to democracy and puts the country back on the path to economic and political progress. “The property market has been subdued in 2007. Although the general election is not a miracle cure to Thailand’s problems, we do expect a clear and positive policy towards foreign investment from the democratically elected government. This should play a significant role in bringing confidence back to the market,” concluded Mr. David Simister, Chairman of CB Richard Ellis Thailand.

The villas will be located amid lagoons and tropical gardens at the new Shangri-La’s Phuket Resort and Spa which is scheduled for completion in early 2009.

Property agency CB Richard Ellis is reporting visits by potential buyers from around the world to the on-site sales office which opened in mid-May.  The construction of a show-villa will also commence in the near future. 

A third of the exclusive development at the resort at Bang Tao beach, positioned as one of Asia’s top resorts, has already been snapped-up following a highly successful sales launch and exhibition in Hong Kong earlier this year.

“Buyers from across Asia and worldwide are already spotting a great investment opportunity with the private villas,” said David Simister, Chairman of CB Richard Ellis Thailand. The 360 square metre residences are exquisitely designed for a “luxurious tropical lifestyle” in lush landscaped gardens with private swimming pools. Each villa features indoor and outdoor living areas that blend harmoniously, large terraces, a sala pavilion and outdoor showers making it one of Phuket’s most substantial branded pool villas. The development also features a waterway system connecting each residence, an architectural design which was taken from the Dubai Hotel “Al Qsar Madinat Jumeirah” “Owners will benefit from an outstanding design and the integrity of Shangri-La as the property manager and hotel operator”, said Mr Simister. They will also earn rental revenue when not staying at their homes.

The villas are being sold on a leasehold basis in accordance with both current and proposed foreign ownership laws in Thailand. Shangri-La’s Phuket Resort and Spa is located at the Layan end of Bang Tao beach on Phuket’s prestigious west coast. This area is a ‘hidden gems’ in Phuket and considered as one of the best beaches in Bang Tao bay. The resort is also conveniently located just 25 minutes from Phuket International Airport.

Villa owners will benefit from the resort’s wide selection of restaurants and recreational facilities such as health club, tennis courts, water sports, kids’ club, entertainment centre, three swimming pools and Shangri-La’s signature spa brand ‘CHI’. This will be located in its own spa village with private residential spa treatment villas.  Inspired by the legend of Shangri-La, CHI offers treatments based on ancient Chinese and Himalayan healing rituals and traditions.

CBRE estimates that well-managed rental properties in Phuket produce annual returns of 6-8 per cent a year. In addition, Phuket also continues to offer buyers the potential for capital appreciation. Although there is often a small risk associated with an off-plan purchase, the risk in this case, given the operation and management by the Shangri-La brand and the endorsement of a reputable developer would not appear to be significant.

“Early buyers can secure a great value substantial villa, competitive in all respects including specification, brand and price, compared to anything on the market,” said Mr Simister.

Phuket is Asia’s premium residential resort market and attracts increasing global buyers in search of stunning properties, exceptional locations and guaranteed privacy. International hospitals and schools enhance the island’s appeal. Within half an hour of Shangri-La’s Phuket Resort and Spa are three marinas and six golf courses, including Blue Canyon Country Club, ranked amongst the best in Asia.

For further information about the villas please visit www.shangri-la-villas.cbre.co.th