From holiday mecca to prime real estate, this island is on a roll. Ed Peters reports what’s on offer and how much
Alan Sadd loves the blues. So when the 58-year-old British director of CoCo International Properties Co Ltd (“Real Estate in Paradise”) was looking for a way to put his island home on the map last year, he hit on the idea of a music fest.
A contact in the industry put him in touch with some world-class names, and for 10 days late last year,Koh Samui rocked to the likes of the septuagenarian Jerry Lee Lewis, Jools Holland, Ike Turner, Zakiya Hooker, UB 40, The Wailers and Big Brother and the Holding Company.Held by the lake just behind Chaweng Beach, the festival was a triumph of rumbustious son et lumière and a miracle of smooth organisation.
Talk about great balls of fire. In the space of just over a week, Samui made the quantum leap from Thai holiday spot to international destination, and it was a move largely fuelled by the massive property developments that are transforming the island’s 247 square kilometres. The road that roughly circles Koh Samui is scattered left and right with hoardings beseeching passers-by to buy in: and it’s seldom that the copy lines eschew mentioning “paradise”. Welcome to Kohnstruction Samui.
“The prime idea of the music festival was to promote the island, pure and simple,” says Sadd.“We plan to build it up in future years, after all events like the Glastonbury pop festival started small, and now it’s one of the world’s best-known musical celebrations.We didn’t get the numbers of people that we wanted in 2005, but still it was a resounding success.
“We made our footprint in the sand, you might say.
That a property development company is organising an international music festival says a lot about the industry’s clout on Koh Samui. No longer content with a mere fortnight’s sun, sand, sea and sybaritism, the travelling public is looking to invest in Koh Samui, The Brand. And considering a one-bedroom villa can command as much as US$400 per night in rental, owners are looking at healthy returns as a reward for successfully negotiating the mini labyrinth of property purchase in the Kingdom of Thailand, where foreign currency is accepted with alacrity, though foreigners sometimes with slightly less enthusiasm.
CoCo is one of dozens of developers buying up land on Samui and trading on the paradise label. Sadd’s commercial empire also embraces seaplanes, restaurants, a diving operation, a live music bar called CoCo Blues, a yacht building and chartering service and a property management arm.
“I was working in the Middle East, building factories, when a relative who had bought land here asked me if I was interested in joining in,” explains Sadd.
“That was back in 2001. I’m not an engineer or a pilot or anything like that, simply a businessman making sure that things run properly. There’s massive potential here, and we are forecasting yields of 25%.” “The worst thing that could happen if you buy here is that you are left with a very nice place to go on holiday, but the indications are that the island’s potential is simply going to keep on increasing.”
Certainly,Koh Samui has become more user-friendly over the past few years. The international airport remains low-key and pleasantly verdant, hosting non-stop flights from Singapore,Hongkong and – in the near future – Kuala Lumpur. Three international hospitals are able to provide not just top notch
standards of care, but are also aiming to lure a slice of the lucrative health tourism market.
The sprawling aisles at Tesco, one of the world’s leading supermarkets, do a roaring trade 14 hours a day, seven days a week, 365 days a year, accompanied by such distinguished acolytes as Kentucky Fried Chicken and Dunkin’Donuts.
Two schools merged to form Open Gates in 2004, providing international-standard education for toddlers, teenagers and those in between,while boarding establishments such as the British Curriculum International School in Phuket and Harrow in Bangkok are only an hour or so's flight away.Dining out has
moved on from plates of noodles in beachside shacks to show a certain sophistication, whether in five-star resorts like the Evason and the Anantara, or in the more homely Fisherman’s Village where ocean-view restaurants with contemporary cuisine and décor sit side by side with charismatic local shops and residences.
Nightlife is equally alluring,with everything from Irish pubs to the Siam Bar at Lamai, where the entertainment options include ladies’ mud wrestling every Sunday. Throw in Koh Samui’s natural charms – broad sandy beaches, excellent marine sporting opportunities and a lifestyle that despite the recent changes remains pretty laid-back, and it’s a wonder the estate agent’s brochures don’t run out of superlatives.
Property prices at the very top end of the market can top the million mark – of US dollars.However in general – and compared to prices around the world – Koh Samui's property is highly reasonable,with a solidly designed and built four-bedroom, 225-square metre house going at around US$200,000.
CoCo’s multifarious offerings give some idea of what’s on offer. Ocean View, on Tong Son Bay, is a fully serviced project containing two and three-bedroom villas that sweep down to the sea, employing a neo-Thai design to blend in with the lush surroundings. A sister project, dubbed Palm Villas, comes with a guaranteed fixed lease-back return of 12% per annum for eight years,with one month every year allowed for owners’ personal use.
Bophut, at the northern end of Samui and handy for both airport and the main drag of Chaweng, continues to one of the more popular areas to live. Plumeria Place Residence’s villas,with 56 garden plots and three on Bangrak beach, are priced at Home with a view: sun, sand and serenity US$95,000 and up.
On a marginally less lavish scale, Monlak “Mon” Inkeaw, manager of Countryside Properties, is marketing two developments with prices as low as 6.1 million baht (US$156,410) for a two-bedroom, three-bathroom villa in a purpose-built estate on thewest coast near the port of Nathon.
“All the Samui Sunshine Villas have their own pool, and owners can shop in the local market but be back at home within five minutes. This is not a tourist trap, but part of a genuine Thai community,” says Khun Mon.
“Much of the attraction of Koh Samui is that it’s summer 12 months a year.Get off the plane and you are in shorts and flip flops. Wine prices are pretty much what you might pay in Europe, but otherwise you can eat and drink amazingly inexpensively.”
Barry Gutteridge, CPC’s director, adds:“The Samui property boom has still got a long way to run. It started about four years ago and at the time, you could buy land for as little as 400,000 baht (US$10.256) per rai (1,600 sqm). “Now, you are looking at two million minimum, and more like five million for prime areas. “If you can find beachfront land on Samui, it will cost you about ten million baht (US$256,410) per rai.However, if you look further afield, to islands like Koh Phangan across the bay, it would only be three million baht (US$76,923) per rai.
Currently there is very little in the way of infrastructure on Koh Phangan, however, land has been earmarked for an airport, and some roads have been concreted. If you are seriously looking to invest in the long term, that’s the place to put your money.However, if you are simply looking for a holiday home that will go up in value, there are some very reasonable options on Samui.”
What might be termed the Samui property stampede is being largely engineered by expatriates, and it’s no surprise that it is largely foreigners who are buying. Hongkong,Singapore, Europe and Australia are prime markets, but citizens of the former Soviet Socialist Republic are working to unite their part of the world with this part of Thailand.
“Russians are starting to come to Samui to buy. They got a pretty big toehold in Pattaya but are now branching out,” says Terry Blackburn, who apart from publishing an online property report also co-ordinated the Thai pavilion at the Moscow International Property Show last year. “Part of the attractionof Samui is that it is different to Phuket, the other big resort island in the south of the country.
“There are fewer big brands here,more chances to acquire beach land, and if you’re keen, you can buy somewhere and commission your own architect. The reaction to the Moscow show was tremendous, and I think we are going to see more Russians coming here in the future,with an eye to both investing and having their own place to come and stay.”
There’s certainly no shortage of choice on Samui, and no shortage of developers looking to get in on the act. Just ‘Tec, a European technology company that has diversified into property, is currently building Tondhama Village at Choeng Mon Beach on the northeast coast.Comprising apartments, villas, and more exclusive “residences”, this might be described as the one-stop-shop of Samui developments.
The complex includes a swimming pool, clubhouse, restaurant and 24-hour security; three optional interior design packages are available, and Just ‘Tec will also set up 70% mortgages, though only in US or Singapore dollars, which under usual circumstances have to be paid off in ten years.Not that the company’s prices are overwhelming,with a 203-square-metre, three-bedroom apartment being marketed for as little as 5.3 million baht (US$135,897).
“The project’s coming along extremely fast, and we should have most of it completed by April,” says sales manager Craig Beechey.
“People like the idea of everything being sorted out in a single package, and of course, if they want we can also manage the property, so they can enjoy rental income as well if they are not going to live here full time.”
To end on a cautionary note, potential purchasers should be warned that there are pitfalls in paradise.
“The quality of workmanship can be highly dodgy,” explains one experienced but anonymous developer.
“Some building mcompanies will employ anyone who comes along with a hammer, which they may well use to bash in screws.
“Make sure you get all the paperwork straight, and if you are going into this with a local partner, make sure it’s somebody you trust implicitly. Don’t expect things to happen in a rush. The acronym TIT, as anybody who has been here for a while will tell you, stands for “This Is Thailand”. Even though you are paying the piper, you can’t always tell the locals what tune to play, or how to for that matter.
PATIENCE IS KEY
Three years ago Hongkong public relations guru Susan Field bought a patch of jungle on a hillside above Bophut in Koh Samui, with the intention of building a holiday villa. At the time of writing, it’s still a brown-field site.
“We went back to inspect at one stage to find someone had removed a couple of tons of our earth,” says Field, whose clients include the Mandarin Oriental and Sofitel hotel groups.
“The locals said there’d been a landslide, but strangely enough, the site was flat and just right for a volley ball court, which was how they’d put it to use.”
Such problems are simply part of the warp and weft of property purchase in Koh Samui, a process which absorbs both time and patience. After buying a property in Spain, Field and her husband decided they wanted to put down roots in Asia too, and as they both liked Koh Samui – Field remembers the time when there were but two hotels on Chaweng – looked around for a likely plot.
“There wasn’t even a dirt track when we first visited the site, it was pure jungle, but I could see the potential and the views out to sea were fantastic,”
“We’ve both been busy, so we haven’t got on with this as fast as we should. We had to part company with our first architect, but in the meantime we’ve seen construction costs shoot up by 20%.”
Field took a 30-year lease on one rai of land – 1,600sq m – for 1.5 million baht (US$38,517), and estimated at the time that building her dream holiday home would cost six or seven million baht (US$154,000 or US$179,750). “We’ve altered our plans slightly, but even so our costs are now looking more like nine or ten million baht (US$231,107 or US$156,786).”
Field’s baan(house), once finished, will comprise an upstairs living room to take best advantage of the marine panoramas, with two ensuite guestrooms below, as well as a fully-fitted kitchen.
The master bedroom will be contained in a separate structure, while a sala – “somewhere we can work or relax and fix a snack without having to go up to the kitchen” – will stand by the infinity pool. She says: “We’ve now engaged a second architect, at a cost of US$10,000, who is based in Bangkok, but we really see eye-to-eye.
We’ve also got an English project manager who comes highly recommended. The next stage is for the construction to go out to tender. We’ve asked the
architect to line up three possible contractors.
“I hope within a year from now we’ll be going on holiday there. The key thing is to find professionals you are happy with and who respond to your
requests. And be patient!
“Koh Samui’s still magical. I went there with a friend not so long ago and she fell in love with the place and bought some land more or less straight
Mind you, she paid three times as much as I did. And there’s not much sign of costs going down in the future.”