An island that was isolated until the late 20th century and without roads as recent as the 1970s (story has it that it takes an entire day to trek from one side of the island to the other through its mountainous, densely forested interior), Ko Samui might be considered a late bloomer in the paradise-island-tourism scene.
Ko Samui’s backstory is a bit The Beach-esque. Adventurous Western backpackers aboard rafts stumbled upon the unspoilt tropical paradise in the 19070s.
Word got out, and by the 1980s tourists began arriving, first in trickles, then in hordes. When the island’s only airport opened in 1989, its tourism industry made a staggering turn. It is now Thailand’s second most popular island destination, after Phuket, and it has much more to offer in terms of property investment. Being a resort island means vacation homes are the bread and butter of Ko Samui’s property market. And here buyers are spoilt for choice.
According to Harry Bonning, managing director of Ko Samui Properties, the island’s vacation-home market generally falls into four main categories: high-end luxury hotels, middle range hotels, budget hotels and private villas.
He said that the upper end of the market has traditionally performed well, due in part to the lack of low-cost airlines flying into Samui. Hence the island’s main visitors are pretty much cashed up.
In addition, luxury private villas continue to attract good occupancy and there are now a number of specialist companies providing both management and marketing services on the island, said Bonning.
At present, there are a number of high-quality villas currently available in various locations on Ko Samui, from beach front to ocean view, from the quieter south and west to the busier areas of Chaweng, Lamai and the Bophut Hills.
However, as vacationing people want to be simultaneously near a beach and not too far from a decent selection of restaurants, the beaches of Chaweng (through highly commercialised) and Lamai and the relatively tranquil Choengmon are ideal destinations for vacationers. Consequently villas within easy reach of these locations tend to attract both higher rates and higher occupancy. Another good investment option, according to Bonning, is some of the managed developments, especially where the developer lives on site and takes a personal interest in the day-to-day management.
Although infrastructure problems have pestered Ko Samui for many years, the Thai government is looking into ways to address these. One recurring criticism of the island is the monopoly of Bangkok Airways with air travel and the consequent comparatively high price of air fare to the island. As building a second airport may not be feasible, a study suggested that an airport at Don Sak on the mainland, just a short boat ride away to the island, may be a better option.
According to Bonning, additional funds have also been injected to boost its image, such as a THB20 million tourist information centre, a THB40 million flood prevention project, and a THB13 million environmentally friendly garbage disposal project, among others. These are in addition to current road drainage and resurfacing projects already in hand, and a new transformer station and transmission cable from the mainland to cover supply issues for the foreseeable future.
The most significant event on Ko Samui according to Bonning was the government’s decision to upgrade its status into that of a city, which significantly increased its tax revenues. Slowly the island’s infrastructure is improving. High-speed internet is available in almost all areas. Global hotel chains, too, have taken notice. Starwood will open the 80-room Vana Belle in January, while Mövenpick will unveil its 81-room property later in 2013.
A buyer’s guide
Similar to many other Asian markets, a foreigner may only own a condominium in Thailand under his or her name. However, if a foreigner wishes to purchase land and build a villa or house on it, the legal way is to enter a long-term lease on the land, typically 30 years initially, and include an Option to purchase at an agreed figure (should foreign ownership of land become legal in the future) or extend the lease for another 30 years.
The important point is that an Option is purely contractual between the parties; hence, it is necessary that all parties are present when this is exercised. However, as it is difficult to predict who will be around in 30 years, the solution is to ensure that the Option agreement is binding on heirs and successors of both sides.
Many developers nowadays are offering 30+30+30 years Option, which strictly speaking is not correct as a second extension is not enforceable. They get around this, however, by giving the buyer shares in the underlying land-owning company, which is the other party to the Option agreement. Therefore, a lease from a land-owning company of which the buyer is a shareholder is more secure than a lease from an individual.
In addition, the foreigner must also apply for a permit to build a house under his or her own name. This way, he or she owns the house and has a long-term lease on the land on which the structure sits. As with purchasing properties anywhere, pay for a good lawyer and do not settle for the cheapest choice.
Things to consider
Bonning advises prospective buyers to look at investing in a Samui property the same way they treat any investment.
- Be clear on the reason for buying. Is it purely investment, a vacation home with holiday lettings, or for retirement?
- Be sure you know where you want to be. Bonning recommends that someone who wants to come to live on the island should rent for at least six months to get a better idea of where they want to be and if indeed island life is for them.
- Commit for at least five years. Buying and selling in a short period of time will usually lead to a loss.
- Understand the visa requirements to ensure you can make full use of your property as and when you need to.
- Practise due diligence. You cannot do this without a lawyer and there are some good ones on Samui. Do not choose the cheapest. Talk to two or three and decide with whom you are comfortable with.
What to buy
1. Samujana Located at the north-eastern corner of Samui and mere minutes away from the airport is Samujana (from US$2.75 million), Gfab Architects-designed villa development scheduled for completion in May 2014.
This project will boast 26 villas, each sitting on more than 1,843-square-metre plot and tailored to its unique topographical conditions and the requirements of the individual owner. Each villa will have a private swimming pool; an average of 450 square metres of living space; four bedrooms with en-suite bathrooms (a study converts into a fifth bedroom); floor-to-ceiling windows; and private terraces. Each bathroom has a generous-sized bathtub and walk-in shower, as well as an outdoor showering area.
Meanwhile, the villa’s open-plan kitchen is fitted with modern amenities and overlooks the infinity pool, and a fully equipped audio-visual room is equipped with a plasma screen television and surround sound system.
Rocks excavated from the site were used to form a major part of the cladding. In addition, materials used were selected for cost, proximity to the location and skill levels commonplace on the island. The villas’ colour palette is kept very simple: local black slate for the wet areas and pools; rough terrazzo floors, and painted plaster, which are accentuated with the sparing use of local timber for decks, doors and windows.
2. Villa Ama Lur Located in the far southwest of the island is Villa Ama Lur, a five-bedroom beachfront luxury property in Thong Krut. The area is also home to five-star properties, such as Nikki Beach, The Conrad and the Kamalaya. Each of the US$2.95 million villas boast 1,200 square metres of living spaces and a 125-square-metre swimming pool that leads directly to a white-sand beach. It has five bedrooms, three of which are bungalows set around the pool and the two others are situated in the main house.
The property comes with full-time house help, chef, a whirlpool bath, a sauna, plasma TVs, surround sound systems, WiFi and bilingual concierge services. Attractions located nearby include the Samui Zoo and Aquarium, elephant trekking to Namuang Falls, island boat trips and high-end hotels, spas and restaurants.
3. Bophut Villa This US$1.12 million villa situated in Bophut Hills in the north-eastern side of Samui is mere 20 minutes from the airport and very close to the nine-hole Bophut Hills Golf Course. Sitting on a 1,600-square-metre plot, this open-plan property has a total of 640 square metres of living spaces. A separate pavilion contains two guest bedrooms with en-suite bathrooms, a large living room on the upper level, and a spacious terrace with a dining table. The master bedroom is on the second level of another pavilion, which also has another guest bedroom downstairs. Outside the master bedroom is a large terrace with four sunbeds and umbrellas. All the bedrooms have air-conditioning.
4. The Residences at W Retreat Koh Samui At the northern coast of Samui is the popular Maenam area where you can find The Residences at W Retreat Koh Samui, an integrated resort development comprising a 73-pool villa hotel and 19 private residences for sale. The residences are priced between US$2.17 million and US$6.86 million and will be managed by Starwood’s W Hotels. The residences (three-, four- or five-bedroom villas) were completed in 2012, and Starwood will make the rental program (which is entirely optional) available to residence buyers when the entire residential project is 100% complete.
For more information: kosamuiproperties.com