Tropical beach at Bo Phut in Koh Samui.
From a sleepy island in the Gulf of Thailand, Koh Samui is heating up as one of Southeast Asia’s leading investment hotspots.
By Michelle Yee
Koh Samui is the third largest island in Thailand after Phuket and Koh Chang. Gorgeous pearl-white sandy beaches, lush tropical rainforests and magnificent waterfalls can be found at some of the island’s famed attractions. With so many breathtaking sights, it’s no wonder Koh Samui is fast becoming one of Thailand’s most popular destinations. According to reports, Koh Samui has continued to show strong growth in travel and tourism. In fact, the market has demonstrated great resilience over the past few years despite a relatively flat global market.
“Arrivals to Samui International Airport recorded a 10.5 percent year-on-year increase as at YTD April 2016,” said Mike Batchelor, Managing Director for Investment Sales in Asia at JLL’s Hotels and Hospitality Group. “Some of the factors that can be attributed to this increase include greater accessibility to the island via flights to Surat Thani Airport (mainland) plus ferry transfers as an all-in-one package provided by low-cost carriers during the past few years, as well as further growth in key source markets, i.e. Germany (12.9 percent), Eastern European countries (16.8 percent), Australia (5.9 percent), the UK (12.9 percent), China (44.7 percent) from 2014 to 2015,” he noted.
But Koh Samui wasn’t anything close to what it is today more than three decades ago. Back then, the island only had dirt roads, and there was very little infrastructure. It wasn’t till the late 1980s that things began to change. To attract more tourists, the island improved its infrastructure and the whole process took several years. Today, the island boasts a slew of modern developments, including an international airport, several high quality hospitals, a top golf course, a wide variety of restaurants and hotels, and a new luxury shopping mall.
Aside from being known for its abundant unspoiled nature, the island is also famous for its ultra-luxurious accommodation options. But Koh Samui wasn’t always linked to luxurious villas and resorts. Close to a decade ago, Koh Samui was better known for its cheap beach-shack lodgings, which were hugely popular with backpackers. It was only after Four Seasons unveiled a high-end villa resort on the island in 2007 that changed everything. The Four Seasons resort was the first property on the island with access to a private beach, and each of its hillside villas had its own infinity pool. Following the launch of the Four Seasons resort, a swathe of high-end hotels opened too, including Le Méridien, Banyan Tree, the W Retreat and Conrad Koh Samui.
“Hotel chains such as Banyan Tree, W and Six Senses are some of the international brands that have changed the face of the resort,” said John Kinder, an investor in Samujana, a 27-villa development on the island’s north-east. “Samui used to be Phuket’s poor cousin, but it is now attracting a lot of the top-end brands. They are very different places though. Samui is much smaller and you can’t fly long-haul here, so it has much more of an island feel,” he added.
With the steady increase in tourist arrivals, demand for rentals of villas and apartments, too, have been increasing, which in turn has made Koh Samui very popular among investors, especially those who seek yields and also a holiday home.
“The interest in top-end villa properties on Koh Samui has increased in the last few years. This uptick in interest is due to ongoing detrimental economic developments in Europe, and can also be attributed to the stability brought about by the interim military government in Thailand. With the smooth royal transition, and the continued focus by the government on stamping out corruption and stimulating confidence in Thailand, we are confident that owning a luxury villa on Samui is a sound investment,” shared Kurt Berman, General Manager of Samujana.
Why invest in Koh Samui?
Attractive yields
Statistics show that investors who have purchased a condominium or villa in Koh Samui have been enjoying good returns on their investment – between eight to 10 percent per year. According to Berman, the Samujana rental business has grown year-on-year, and they are forecasting continued growth in the coming years.
“Samujana Co. Ltd. is owned by Samujana villa owners, and our main focus is always on protecting our owners’ investments. With this in mind, Samujana is unique in that we are not only eager to improve rental revenues, but also on controlling costs, and exploring opportunities to improve profitability for our owners. All this equates to continued improvement in the annual yields,” he said.
Great investment potential
According to reports, the values of properties in Koh Samui have been steadily increasing in recent years, between 15 and 20 percent per year. And with the government’s plans to further improve the island’s infrastructure, the value of properties is set to rise in the near future.
A tourism hotspot
Although the rainy season is traditionally regarded as being from October to mid–December, Samui is in many ways an all year-round destination, with no risk of tsunamis and located well out of the typhoon belt. The climate is tropical and humid throughout the year, and the temperature usually ranges from 28 to 35 degrees Celsius.
There are plenty of attractions and activities on the island, including the Santiburi Samui Country Club, one of the most beautiful golf courses in the region and recently voted as the one of the top five golf courses in Thailand. Other attractions include scuba diving, meditation and wellness retreats, island hopping and Buddhist temples. For those who love sailing, the Gulf of Thailand and the Samui archipelago offer fantastic opportunities for sailing, as the conditions are calm for the majority of the year and the marine life is abundant.
Nature lovers, too, will appreciate the abundant outlying islands, picturesque waterfalls and densely forested hills.
For those who wish to experience the local culture, they can take part in some of the festivals held on the island, such as the Songkran festival in April, the Samui island regatta in May, the Loy Kratong Day in November, and more.
Easily accessible
Easily accessible both regionally and internationally, Samui is just a 45-minute flight from Bangkok and Phuket, two hours direct from both Singapore and Kuala Lumpur, and three hours from Hong Kong. There are five airlines that operate direct flights to Samui, with China being the only destination based outside of Southeast Asia. In addition, Samui is now accessible by private jet and helicopter, with additional private airport facilities currently under construction.
Set for more growth
While Koh Samui has developed tremendously over the past decade, industry watchers say that the island is set for even more growth. “In the last few years, Koh Samui has continued to develop into the only luxury destination in Thailand. The airport has been expanded with an additional international terminal and improved facilities, whilst maintaining its unique charm and character. The island’s infrastructure has also seen major improvements with the implementation of upgraded power connectivity and fresh water provision from the mainland, improved roadside drainage, refurbished roads, and the continued gentrification of the main tourist area of Chaweng with the introduction of the Central Festival shopping complex. The development of an airport on neighbouring Koh Phangan and the construction of at least one luxury yacht marina on Samui in the near future bode well for investors and potential buyers,” shared Berman.
Buying guide
“As with most Asian countries, it is very difficult for a foreigner to own a freehold property in Thailand. A leasehold agreement is therefore the most common, and is effectively a fixed term lease of the villa from the Thai company which owns the land. Leaseholds in Thailand are for a period of 30 years, but can be renewed for a maximum of two additional lease periods, meaning that in effect the lease is 90 years long,” said Berman.
A foreigner, however, is entitled to purchase a freehold unit in his/her own name in a condominium project. This is made possible under the Condominium act, which states that a development with a Thai Condominium License may sell 49 percent of the total space of all units in the development to non-Thai nationals as freehold ownership, while the remaining 51 percent of the project may only be leased for a term of 30 years to foreigners or sold to Thai nationals as freehold.
Only developers who have obtained a Condominium License are allowed to sell freehold units to foreigners. Eligible foreigners include those with residence permits, those who were granted permission to enter Thailand under the Investment Promotion Act, foreign juristic persons with investment promotion certificates, and foreign individuals or juristic persons remitting foreign currency into Thailand for payment for the condominium units.
For foreigners who do not hold a permanent resident certificate, they are required to transfer 100 percent of the amount of the purchase price from an overseas source into Thailand.
Property hotspots: Where to look at
“Free-standing villas are dotted all over the island, but without doubt, the most sought after part of the island to own a luxury property is in the north-eastern corner. Samujana is perfectly positioned in Choengmon overlooking the “platinum mile” on the north-east coast of Samui. It is possible to buy a beachfront villa in the west or south of the island, but the sea can be very shallow, and you’ll realise that mostly ferries and fishing boats dominate the view. In addition, it is at least an hour’s drive to the airport. The Chaweng/Choengmon area is also where all the island’s best shopping, restaurants and nightlife can be found,” said Berman.
FAST FACTS
(KOH SAMUI)
Population: Approx. 63,000
Total area: 228.7 sq km
Currency: Thai baht
GDP per capita (Thailand): US$5,778 (S$8,241)
GDP growth (Thailand): 3.2 percent
Future transport: Private airport facilities under construction
Distance from Singapore: Approx. 1,010 km
INTERNATIONAL HIGHLIGHTS
We check out two ultra-luxurious, yet affordable villa developments in Koh Samui that could seem very tempting for foreign investors.
NEW PROJECTS
Samui Emerald Villas
Koh Samui, Thailand
Type: Villa development
Developer: Samui Emerald
Tenure: Freehold
Facilities: Private pool, sun deck, barbecue area, car park
Nearby Key Amenities: Beaches, international school, hospital, shopping centres, golf courses, restaurants
Nearest Transport: International airport
Starting Price: THB5.9 million (S$237,718)
Whether you’re seeking a holiday home or a property for investment in Koh Samui, Samui Emerald Villas, which is strategically located in the heart of Plai Laem, will make a choice investment.
The development is situated just a short drive away from Koh Samui’s international airport, and is within proximity to Choeng Mon Beach, Bophut fishing village, as well as trendy restaurants and nightlife spots.
An exclusive luxury development comprising just 10 semi-detached duplex villas, each features three bedrooms, three bathrooms, and a fully-fitted Western-style kitchen built with top-of-the-range materials. Each villa even comes with its own private pool and terrace.
Samujana
Koh Samui, Thailand
Type: Villa development
Developer: Samujana Company Limited
Tenure: Leasehold
Facilities: Private cinema, games room, gymnasium, private pool, barbecue area, garden
Nearby Key Amenities: Beaches, waterfalls, temples, shops, golf courses
Nearest Transport: International airport
Starting Price: US$1.1 million (approx. S$1.57 million)
Located on the north-east coastline of Koh Samui, Samujana, which is an exclusive villa estate comprising 27 villas, stands proud on a hillside overlooking a coral cove with private beach access, and is surrounded by acres of lush landscape.
Out of the 27 villas, 10 are for sale, and all are available for holiday rental. Prices start from US$1.1 million (approx. S$1.57 million) for a three-bedroom villa comprising a plot of 771 sq m to US$5 million (approx. S$7.13 million) for a six-bedroom villa comprising a plot of 2,679 sq m.
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