The next boom?

A number of islands off Krabi could offer potential for resort and residential development that would set it apart from Phuket

NINA SUEBSUKCHAROEN

It may be overshadowed by Thailand's more famous resorts, but Krabi is no less attractive with many arguing that it is in fact more appealing _ and poised for a real-estate boom of sorts.

CB Richard Ellis chairman David Simister expects 2007 to be the first big year for Krabi's property market with chances of capital appreciation being very high.

A good example of interesting developments to watch is Koh Jum Estates, a boutique project offering plots on an island with west coast sunset views and a truly white sand beach. No developer on Phuket can claim to have offered anything similar in years since all the prime sites have been taken.

Even so, Mr Simister remains confident in the Phuket market's long-term prosperity. "There is going to be an upgrading of stock in Phuket, there is going to be the launch of branded properties with more professional developers, but I believe that the market now is Phangnga and Krabi, and it probably stretches from Koh Lanta to Khao Lak. Khao Lak is obviously still suffering [since the 2004 tsunami] but there are people with residential projects there.

"The criteria are accessibility and the specifics of the sites, which is very much the view _ and there is an awful lot of spectacular scenery in this area."

In comparing Krabi to Samui, Mr Simister mentioned that in many ways the former is ahead because it has a real international airport that is open to all carriers. Thai Airways International has frequent flights to the coastal city from Singapore and there are also strong rumours that a Hong Kong service will start soon.

(Bangkok Airways, which owns the Samui airport, has recently indicated that it is prepared to give up its lucrative monopoly and encourage other carriers to fly to the Gulf island.)

"Samui should have developed like the Maldives with restrictions on density," Mr Simister observed. "Now, for the busy part of the island, which unfortunately probably has the most attractive beaches, development is almost wall to wall."

While Phuket is way ahead of both Samui and Krabi because it has marinas, Mr Simister is optimistic that marinas will be developed in Krabi in future, but in the meantime the extensive island network lends itself very nicely to sheltered havens.

"So in fact there are quite a lot of yachts cruising the area and they have natural harbours where they are able to shelter, protected by the network of islands."

Despite this, there is no denying that at the moment Krabi is a little bit off the beaten track, though the people who do go there tend to stay longer.

"The Krabi area has been quite rich in agriculture with oil palm and rubber, very lush scenery, and in fact some of the area outside Krabi which has nothing to do with tourism is clearly prosperous through agriculture," Mr Simister notes.

While Krabi's Ao Nang beach offers budget tourism, Mr Simister pointed out that it is no way a Patong or Pattaya environment.

"Krabi has developed, I suppose, at the backpacker level, and at the economical tourist level, the people who want to stay somewhere cheap for a long period, but it's also developing at an equal rate at the five-star level," he says.

"And what we've missed out on _ which is a great benefit to Krabi and I think a great benefit in future _ is that it has missed out on the Pattaya, Patong go-go bar development part of tourism. I think that will be a huge strength for Krabi's market going forward."

Krabi's biggest development project, which according to Mr Simister has the potential of becoming the equivalent to Laguna Phuket, is The Cove. It is the first venture in Asia for Asian Property Homes, whose executives are mainly from the UK. It will have more than a thousand residential units developed over a period of several years. The estate will boast a championship golf course, hotel, condominiums and oceanfront villas on a secluded island peninsula just 30 minutes from Krabi airport.

While construction of The Cove has still to start, an announcement on the golf course and its designer is scheduled for Thursday in Hong Kong, which is seen as a prime market for the properties.

Presales of condominiums have started and CBRE is seeing brisk reservations of low-rise units, notably in the UK.

Prices start at 10 million baht for a two-bedroom condominium and smaller villa units. Larger villas in prime sites could fetch up to 100 million baht.

Mr Simister said a number of people were looking at developing smaller projects, with Koh Jum Estates among them. It consists of 19 beachfront housing lots with striking views of the Phi Phi islands. Prices start at 15 million baht a rai and with the construction of a villa, depending on size and specifications, it could climb to 50 million baht.

In Mr Simister's opinion, the best completed project in Krabi at the moment is the luxurious Pimalai Resort and Spa at Koh Lanta. Even though the hotel opened around four years ago, sales of pool villas only started in April.

"It hasn't been marketed in the conventional sense _ going out asking people if they want to buy _ it's been by invitation."

If one were to divide Krabi's property buyers by nationality, there is a high percentage of Britons but these percentages are changing. Mr Simister says he met a Swiss guest at Pimalai who had discovered the resort by accident and after repeated visits discovered villas were for sale and bought one.