Investment

 

Buyers with an eye on investment returns need to be as analytical and cool headed as the professional property speculator. Going beyond the generalized claims of how well Phuket is doing and concentrating on the specifics of ensuring that you are buying in an exclusive project in a prestigious location will be the factors that give you a proper return.  Important in a climbing market, this is equally true in a market turn down where your property for rental or for sale needs to stand head and shoulders above the increasing supply of lesser properties available. 

As a Chom Tawan buyer you can look forward to significant investment returns whilst enjoying the full lifestyle benefits of owning a luxury property in this most exclusive and prestigious projects on Phuket island. Following the illustrative tables below is a market report that helps explain how and why the Phuket property market has significant depth and longevity.

 

Investment returns come in two forms – capital appreciation by purchasing off-plan at today’s prices for delivery in a future period and in property rental.  The returns that can be expected relate to the general buoyancy of the property market, the depth of demand for homes in Phuket and within that the location and exclusivity of the individual property and development. 

 

Capital Appreciation

 

Assuming a conservative illustration of 20% value growth from the reservation time to handover, 15% value growth from then to the time when the whole development is complete, and only 10% p.a. thereafter, the following table illustrates possible property values.  By the 5^th year from the reservation rate, the result of applying these growth rates is over 90% growth in value.

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental Opportunities

 

High rental rates and occupancies are assured through the unique location on Bang Tao beach, 4 minutes to the beach and a few minutes more to the full facilities at the Laguna resort hotels.   The Laguna hotels are popular with up scale vacationers and vacation home owners who are increasingly looking for alternatives to staying in a busy hotel environment, whilst remaining in a location that they like and know well.  Rental can be short term holiday lets, or longer term.  A property that offers luxury sleeping accommodation for 6 or more people in a favorite location, with own pool and beach access and yet close to the Laguna facilities and restaurants is a very attractive alternative to hotel rooms.

 

 

 

Long term rental	Monthly	Gross Annual	Gross Percent	Net Percent
( 12 months)	Rent	Income	Return	Return
3 bedroom Apartment	85,000	1,020,000	7%	5%
3 bedroom Penthouse	115,000	1,380,000	7%	6%
2 /3 bedroom Courtyard Villa	110,000	1,320,000	7%	5%
3 /4  bedroom Garden Villa	160,000	1,920,000	8%	5%

 

 

 

 

 

 

 

 

[Actual Rental Rates Achieved for Similar Property in 2003/4. Net return includes full year deductions for rental fees, estimated monthly CAM fees and approximate furniture package of THB1.2 to 1.6M depending on property type].

 

 

Market Report September 2004

 

Interest in Phuket property has never been higher and the demand for well located quality homes as well as smaller entry level homes in less well know areas seems to have no end.  The even better news is that it is not just the well-off Asian and expatriate families living in Asia who buy today, but a much broader range including those directly from Europe seeking a better and much more affordable property than they can buy in Spain or France; whole families who move their homes here and make use of the international schools and hospital facilities and those who have business’s that can be operated from Phuket. 

 

Phuket still very much includes those seeking a holiday home but with these new types of buyer the demand is for homes that can be lived in, with resort type facilities or access to them. Even though Phuket prices are rising dramatically, many buyers have overseas property and assets that have risen in value faster, giving them superior spending power and the ability to purchase a luxury Villa property for the price of a 2 bedroom apartment in Wandsworth, London or a 2 bedroom 800 sq.ft. apartment in Hong Kong.  With many professionals around the world re-evaluating their lifestyle and limited property and stock market opportunity in their own countries, there are many more people coming.

 

Capital Appreciation – through Buying Off-plan

 

The main investment return comes through the capital appreciation that accrues between buying off-plan at today’s prices and the value of the property when it is completed, and again the capital appreciation that occurs from the time your property is handed over to the value of the property when the total development is completed.  Conservatively, we estimate these as 15-20% on completion and then 15-20% on completion of the entire development.  Remember also that the payment plan is over a generous 18 months.

 

To put this into context, properties located in the best locations in an exclusive and well maintained estate with a limited number of properties, have realized in excess of 100% capital appreciation in just three years.  For Maan Tawan we have had two apartment re-sales (where buyers are upgrading to villas) that have sold at 15-18% above the reservation price within 9 months and sold prior to completion. This is against a backdrop of many more developments appearing, that offer less expensive homes and in contrast, properties in in-land developments or those located in the south of the island have found it difficult to sell much above the building price.

 

With the scarcity of beach side developments on the popular west coast ( over 60% of all property purchases in Phuket last year were on the West coast from Kamala up to Bang Toa), properties at Chom Tawan will continue to command high interest and premiums.

 

If this sounds as if the west coast has reached its peak, then its far from the truth.  Every year the AmanPuri, the Chedi, the Banyan Tree and the 4 other 5 star Laguna hotels are fully booked during the peak season, at nightly rates that range from USD2,500 down to USD700 per night, attracting the “right” profile of client.  They have often to turn away business.  The established luxury property developments in Surin, Bang Tao and Kamala have all found it faster to re-sell and at markedly good premiums than elsewhere, including against new developments offering new development discounts!

 

Rental Income

 

Chom Tawan operates a voluntary rental management operated on behalf of owners by CB Richard Ellis ( or others entirely at the owners discretion).  Richard Ellis will be actively promoting Chom Tawan rentals via its website, offices around Asia and its regular clients as well as managing the rental process (agreements, deposits, cleaning handover inspections etc).  They can also provide all the support services (temporary maids, car hire etc) to make your guests stay a truly memorable one and one that they will want to repeat and recommend to friends.

 

The demand for high quality, premier located rental property has never been greater with peak season nightly rates ranging from USD400-1,200 and long term low season rates of USD2,000-5,000 per month.  Net returns average 5-7% per annum, with most buyers using this money to fund their holidays, furniture and property expenses in Phuket.  For those planning an initial period of 2-3 visits per year before being able to spend more time in their property, Chom Tawan offers the ability to build up a surplus of Thai Baht to be used in the coming years.

 

Exhibiting superior designs, high quality fittings and finishes and connected to the prestigious Maan Tawan development, properties at Chom Tawan will be much sought after by purchasers and renters alike seeking a beach-side location in an exclusive and luxury community.