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Buyers are eyeing Phuket’s inland opportunities

Investors are looking beyond beachfronts on Thailand’s most popular island.

It is easy to fall in love with Phuket. Its beautiful beaches, the laid-back lifestyle and vibrant nightlife make it a favourite of tourists from around the globe who flock to the island.

On the real estate front, meanwhile, it remains one of Asia’s leading luxury destinations, thanks to primarily to the strength of the holiday villa property segment. The island is also an emergent second home or retirement destination, due to its world-class health care centres, golfing facilities, international schools and duty-free shops.

“Phuket has the highest concentration of luxury resort real estate in Asia,” says Bill Barnett, managing director of consultancy firm C9 Hotelworks. “It’s a proven market. Its best asset is its location as it is easy for Hong Kong, Singapore or other regional buyers to come for a weekend.”

He adds that Phuket’s geographical advantage also provides added value via private jet access, airlift to key markets and demand generators like super yachts. Despite the high cost of living on the island, compared with other cities in Thailand, Phuket still represents good value for many foreign investors, who have a choice of titles: leasehold, freehold through condominium, and even freehold via acquisition by a Thai company.

It hasn’t all been plain sailing for the island in recent times, however. A perceived taxi “mafia”, proliferation of illegal land titles and issues with waste disposal all appeared to have tarnished its reputation. The 2004 tsunami also did little to boost investment. Still, beachfront locations now command price premiums of up to THB110,000 (USD3,045) per sqm for a luxury condominium.

“Generally speaking you would be looking at double the price per square metre from Phuket’s waterfront properties in comparison to inland assets,” says Dexter Norville, national director of JLL Thailand.

The most most popular beachfront locations are situated on the west coast and the southwest coast from Nai Harn to Mai Khao, with the Kamala, Surin and Bangtao areas topping the sales volume list. Cape Yamu area has also solidified its reputation as home to some of the island’s best high-end villas in recent years.

“The question for Phuket real estate is how to maximise value regardless of location,” says Desmond Hughes, a senior partner at the Hughes Kuprica law firm. “If you move to Phuket and you really wish to have everything at your fingertips and live near the beach, then a premium will be paid.”

Although the beachfront areas are undoubtedly Phuket’s hottest investment hubs, urban zones such as Phuket Town and Kathdu District are increasingly emerging on the radar. Shopping options on the island grow ever-more sophisticated and infrastructure improvements, such as the expansion of the airport and introduction of a light rail system, are luring investors away from the coast.

Hughes compares the Phuket market to San Francisco, where buyers have the option of living near the ocean, or having a view of the downtown district where urban amenities are easily accessible. However, he believes that Phuket has a ways to go before it can tick all the boxes.

“There has to be better law enforcement especially on the roads and in terms of general misbehaviour,” he says. “There can be culture clashes between Thais and foreigners, and among foreigners of different nationalities. Beaches need to be kept clean and the way people use the beaches properly organised to keep the Phuket market competitive.”

Royal Phuket Marina is one particular luxury residential resort that has thrived despite a lack of beachfront access. Developed by British Asian entrepreneur Gulu Lalvani,the multi-phase project is unique in that it offers private berthing spaces for yachts.

“At Royal Phuket Marina we offer true waterfront property, right on the marina front. It is also centrally located and only a few minutes away from Phuket Town and the international airport.”

“At Royal Phuket Marina we offer true wHe agrees that infrastructure development will be beneficial for intra-island connectivity, helping to bridge the divide between beachfront and urban property.terfront property, right on the marina front. It is also centrally located and only a few minutes away from Phuket Town and the international airport.”

The presence in the market of strong brands and international investors is also expected to keep the market buoyant, therefore, it is likely that more world-class properties will be developed as connectivity improves further and land becomes scarce in beachfront areas.

Another recent addition to the island’s burgeoning inland market is Nusa Laya, an innovative, three-building development with an integrated commercial hub and its own health care facility. Close enough to the popular Layan Beach, the site is also a only few minutes to urban amenities such as the Bangkok Hospital Phuket.

“Phuket’s real estate market has the broadest range of properties available in Thailand,” concludes Hughes. “Phuket has developed its urban amenities but retains its island lifestyle and all that goes with it. The choice of how to live in Phuket is also far ranging and this helps encourage foreign investment from those who wish to sample that life.”

With its beautiful beaches complemented by a range of lifestyle perks, the “Pearl of the Andaman” shows no sign of losing its precious lustre.

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