Luxury View Good on Phuket and Koh Samui
The Phuket and Koh Samui high-end property markets will enjoy continuous foreign investment in the coming years, says Warnes Associates Co, a local structural engineering design consultancy.
Vanich Nopnirapath, the company’s director and a partner, said that even though the residential supply on both holiday islands was now abundant, foreign demand would continue to push forward expansion of property developments, particularly in the luxury segment.
“During this time of global economic instability, investment will continue to flow into emerging markets such as Thailand,” he said.
Foreign investors looking for long-term investment tend to put their money into property, helping to reduce risks from fluctuating currency exchange rates.
“The good thing about the crisis is it has made people stop and consider what the most worthwhile investment would be,” said Mr Vanich.
As well, the high-end market and long-term investors such as hotel owners are feeling less of a pinch from domestic political instability.
Residential and hotel projects for Koh Samui and Phuket make up 70% of the company’s total design fee revenue of 100 million baht, while the rest comes from high-rises in Bangkok.
Mr Vanich said the overall Koh Samui, Phuket and Bangkok property markets have already reached maturity, with only slight growth projected over the next five years.
However, the company will maintain its focus on all three markets, particularly Koh Samui and Phuket, where competition is light and prospects for high-end developments remain bright.
“There are hardly any plain locations left for project developments on Phuket and Koh Samui. The remaining sites are becoming more and more difficult such as on sloping land or up on cliffs,” he said.
But such conditions are an advantage for a company such as Warnes, whose specialty is civil and structural engineering, particularly complex structural designs, said Mr Vanich, who is a civil engineering graduate.
Warnes’ high-profile project clients include the Banyan Tree and Conrad hotels on Koh Samui, The Heights in Phuket, Thai Beverage’s headquarters in Bangkok, The Lofts Yennakart condominium by Raimon Land and the Erawan Group’s Ibis and Mercure hotels.
Mr Vanich said structural designs that are not up to standards can lead to a financial loss of up to 7-8% of a project’s value.
Warnes now has six ongoing projects in Bangkok worth a combined three billion baht along with three hotels in Phuket and 20 private luxury residences including a 10,000-square-metre house in Phuket for a European client from Dubai. It also has ongoing hotel projects in India and Cambodia.
Established in 1999, Warnes has focused mainly on a foreign clientele. Mr Vanich and founder Geoffrey Warnes from New Zealand hold equal shares in the company.