Krabi: 'undiscovered' but looking upmarket Newspaper
: Bangkok Post 12th Feb 2007
By: NINA SUEBSUKCHAROEN
The presence of a handful of upscale resorts such as Central
Krabi Bay
(left) suggests that the residential developments that will follow
will cater to affluent investors, says Mr Barnett. Krabi has yet
to be discovered by many international tourists and property investors,
but the real estate that is available today is not that cheap,
which may surprise many people, says Bill Barnett, the managing
director of C9 Hotelworks.
A recent survey of the southern province shows an undersupply
of real estate investment products. Only four big developments
_ Amatapura, Phulay Heights, The Cove at Krabi and Le Kiri _ are
offering villas for sale to well-heeled buyers.
"It's kind of strange because if you go to Phuket it's just
the reverse,"
says Mr Barnett. "The property boom hasn't started [in Krabi]
yet."
The big international real estate agents such as CB Richard Ellis,
Knight Frank and Savills have yet to go set up shop in Krabi although
CBRE plans to open an office there shortly. For the moment, Krabi
Consultants has the market almost to itself.
But those hoping to buy cheap land in Krabi will be disappointed.
One reason is that some big companies have acquired large tracts
of land in the province over the years. They include the brewers
Boon Rawd and Thai Beverage, and the retail and resort operator
MBK Plc.
During a recent visit, Mr Barnett said he found ocean-view _
not ocean front _ land near Klong Muang beach was already in the
range of 3-4 million baht a rai. "This is not necessarily
cheap because you've got to put the infrastructure in."
Oceanfront land would be anywhere between 10 million and 20 million
baht a rai. Also, few small plots are available.
"There is not much [good land] available. People are looking,
but Krabi is not cheap. I think somehow that's a good thing because
it's a sensible development approach _ if your land cost is that
high it means they will develop quality."
As this is particularly true of Krabi's more developed areas,
such as Ao Nang and Railay beaches, Mr Barnett expects that future
residential property development will drift to Klong Muang and
Tubkaek beaches, where the Sofitel Phokeethra Resort and Sheraton
Krabi Beach Resort are located. "We also see it being pushed
out in Had Yao - that's where the The Cove is - because there
are big [parcels of] land available there."
Mr Barnett sees this phenomenon as similar to what happened in
Phuket where property development moved to the north and east
of the island because that was where big land plots were available.
Higher-end development, he believes, will be good for Krabi because
it is more sustainable than cheaper projects.
In his discussions with the managers of major hotels in Krabi,
Mr Barnett learned that all are keen on learning from Phuket's
mistakes. One positive sign is the presence of underground power
lines along Krabi's beaches, in contrast to the power poles that
are eyesores in many parts of Phuket. As well, jet skis are a
no-no in Krabi.
"What's happened there is an indication of the property
market because the hotels are all going upper-tier. We think residential
offerings are not going to be so much mid-market, it's going to
be high-end product."
Following up on the success of Krabi's three internationally
managed resort hotels _ Central Krabi Bay, Sofitel Phokeethra
and Sheraton Krabi Beach _ more upper-tier establishments are
due to open this year. Among them is The Phulay, which has been
designed by the famous Thai architect Lek Bunnag and is expected
to give Amanpuri and Trisara a run for their money in being truly
opulent. The other is The Vogue, which along with The Phulay is
located in Klong Muang.
Krabi has 11,000 hotel and guesthouse rooms compared to 32,000
in Phuket.
Also helping tourism is the upgraded airport that is served by
low-cost airlines such as One-Two-Go and Nok Air, and international
flights by Tiger Airways from Singapore and many charters from
Europe.
Because the resort property market closely tracks tourist flows,
Mr Barnett says it will be interesting to see how Krabi absorbs
a greater number of tourists as well as property buyers. Should
development not be well handled, it could succumb to its success,
which is something no one wants to see happen.
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