SEA SAMUI REVIVING ISLAND'S PROPERTY MARKET

       Lifting some of the gloom that has enveloped the Samui property market over the past year is a high-end villa and condominium project in the sought-after northern part of the island that a Thai developer has just completed.
       The Sea Samui on Mae Nam beach has been developed by Sinthoranee Property Company and will be operated by Astudo Hotel and Resort Group under its vacation residence brand Le Bayaburi.
       In a market dominated by foreign players,the local developer is following in the footsteps of another Thai developer, Bangkok-based Aquarius Estate Company, which earlier made its mark with the successful Casavela condominium, now operated as the luxury Shasa Hotel.
       Wuttichai Phaoenchoke, Sinthoranee's managing director, said the total investment in The Sea was 550 million baht. His company self-financed the entire development without taking out any bank loans. The three-rai plot on Mae Nam beach which abuts the island's ring road was purchased two years ago, and construction was completed in only 10 months. The project has just six villas of three different styles and 15 one-, two- and three-bedroom duplex condominiums housed in a three-storey building. This structure is to the front of the development and has a lobby and both open-air and airconditioned restaurants on the ground floor.The villas follow on from this building, flanking a flight of stairs that leads to the large swimming pool by the beach.
       From the pool area and the beach one can clearly see Koh Phangan, where the infamous full moon parties are held regularly. An attendant said one could reach the neighbouring island in 15 minutes by speedboat from this point, but usually people take the regular ferries across in a longer 45-minute trip.
       The project's strong point is indeed its location, only 10 kilometres away from Samui's airport, privately owned by Bangkok Airways. Three kilometres farther down from the project is the Four Seasons Hotel, and the shopping and entertainment beach Chaweng - is also close by.
       C9 Hotelworks managing director Bill Barnett said in a recent research paper that the availability of prime land in traditional areas continues to shrink, and this is pushing property development on Samui southward along the western coast.
       Increasingly, limitations in sizeable parcels of land will restrict the number of large projects on the island in the coming years, with bids for the last remaining large coastal parcels going up in price, Mr Barnett added.
       Mr Wuttichai said Sinthoranee had not as yet aggressively marketed the The Sea Samui,doing so only through its website and advertisements in inflight magazines. However,there are plans to participate in a property exhibition in Singapore soon.
       "Right now we have sold 40%, and we would like to stress that we did not stall during the economic slowdown. Although there have been project delays in many places,we completed ours," he said.
       The focus is on foreign buyers, although foreigners cannot hold more than 49% of the space in a condominium on freehold basis according to Thai laws. The prices for the villas range from 36 million to 55 million baht.
       Condominiums are priced from 13.2 million to 31 million baht.
       Realising that property buyers are determined to obtain good rental income right from the start in these economically challenging times, Mr Wuttichai is following other developers both in Bangkok and Hua Hin in offering guaranteed returns of 6% for the first two years.
       To help ensure that buyers continue to get a return on their investment, Mr Wuttichai shrewdly brought in Astudo, a Bangkok-based company operated by a group of Thai and international development professionals, to manage the estate and handle the vacation rentals.
       Anthony McDonald, Astudo's CEO, said rental income would be calculated the same as it is for hotels, with prices varying according to the season and the view from the unit or villa.
       Returns will be divided 60-40%, with the owners getting the larger share, and Astudo's portion covering the cost of operating the project and handling the sales and marketing.
       "We take care of everything, including the cleaning. The buyers don't have to think about anything at all and are able to relax worry-free.
       "It is similar to managing our own hotels,with a small difference being that we share the profit."
       Astudo is currently managing 10 hotels in Thailand, four of its own and six belonging to other parties.
       It also has plans to manage one in the Philippines which is not yet open.
       Aside from Le Bayaburi, Astudo's other three hotel brands are the five-star X2, fourstar Away and three- to four-star city business hotels known as The Base.
       Mr Wuttichai has come up with a novel approach to resort villa and condominium rentals - renting out a large villa or condominium to two separate parties. He gave the villa in which he held a press briefing last week as an example. The villa is actually a cluster of three small buildings. One with two bedrooms can be rented out separately,as can another which has one bedroom and its own mini-bar.
       "Some types of two-bedroom condominiums can be divided and rented out separately. Going in there is a door to the left and one to the right. This is so that the owners can make a profit, which is important right now."
       Mr McDonald said that as Samui is mainly a foreign tourist market he expects as many as 80% of The Sea's visitors to be from overseas.
       "Samui is trying to draw Thai visitors, as some months are low occupancy for foreigners but not Thais," he added.