Thailand’s Expanding Real Estate Horizon

Thailand’s growing market for branded residences is seeing expansion all over the country, presenting new and highly attractive investment opportunities in alternative destinations that feature the kingdom’s famous natural beauty and yet have significantly lower land prices than established destinations such as Phuket.

This expansion is driven by the increasing interest of developers and investors in less explored regions.

These alternative locations offer both financial and natural appeal and could attract buyers who want to get in on the action at lower prices while still enjoying strong returns.

Driving Force: The Tourism Industry

Thailand’s tourism sector, which in 2019 attracted over 40 million international arrivals and is expected to reach 80 million by 2028, is a major driver for the growth of the branded residences market.

This has fueled a property boom in locations such as Phuket, which has become the fourth-largest market for branded residences in the world, following only Dubai, New York City and Miami.

Thailand’s Expanding Real Estate Horizon

Not only has the tourism boom fueled demand for short-term rentals, it has also sparked an appetite for long-term residential investment as wealthy travellers are switching from simply holidaying in Thailand to living here or spending seasons in the kingdom. This in turn has further fueled the growth of the sector.

Hidden Gems: A New Investment Strategy

With land prices in Thailand’s key tourism hubs becoming skyrocketing, more astute developers and investors are looking toward “hidden gems” around the kingdom, especially in coastal beauty spots.

Banyan Group, which ranks as the fifth-largest global branded residences operator, according to Savills Research, recently entered a joint venture for a project in Sichon, a seaside cove in Nakhon Si Thammarat province.

Banyan Tree Residences Sichon, launching in June 2024, has great potential to appeal to entrepreneurial buyers due to its natural beauty, construction quality, brand reputation and outstanding value.

Buying into emerging hubs such as Sichon makes even more sense when land prices in mature areas have soared. For example, beachfront plot prices in Bang Tao, Phuket, now exceed THB 100 million per rai, up by almost 14 times from THB 7.5 million in 2004, according to Thailand’s Agency for Real Estate Affairs.

This contrast underscores the huge potential for those who move early to new locations, where the price of admission is much more affordable and will yield rich dividends for savvy investors such as Urasaya Property, the award-winning developer of Banyan Tree Residences Sichon.

Ravi Chandran, a 25-year resident of Phuket and Executive Director of Urasaya Property, stated, “The notable rise in land values in established markets has been remarkable, yet the window of opportunity in these new settings presents potential for significant growth. The first-mover advantage in areas like Sichon could herald long-term benefits for early stakeholders.”

Thailand’s Expanding Real Estate Horizon

This benefit is highlighted by the opportunity for strong appreciation in value as the new markets mature. Investors can buy into prime locations at an early stage and at more affordable prices, and benefit from the increase in demand as momentum builds in the growing area.

Infrastructure Boost and Lifestyle Trends

Demand for Sichon is also being driven by the recent opening of a new international terminal at Nakhon Si Thammarat Airport, the “work from anywhere” trend and pressure on capital flight.

The destination also features international education and medical and retail facilities within a 30-40 minute radius, while retaining the natural beauty and cultural authenticity that drew global travellers to Thailand in the first place.

Improved infrastructure, including better transport connections, is making parts of the kingdom that were once remote now much more accessible and thus attracting a wider potential buyer base. This boost in travel convenience will be key in supporting the growth of the new residential markets.

Seamless Connectivity and Natural Beauty

“Nakhon Si Thammarat is just a stone’s throw away from Phuket and Samui. You can drive from Phuket to Krabi, and on to Nakhon Si Thammarat, then take a ferry to Samui. That whole part of southern Thailand has huge potential, and we would like to contribute to developing that,” said Stuart Reading, Managing Director of Banyan Group Property Development.

The prime location of Sichon allows for easy travel to other popular tourist destinations, adding value for national and international buyers alike. The natural beauty of the area, combined with its strategic location, makes it highly attractive for those who want a peaceful yet well-connected lifestyle.

Role of International Hospitality Brands

International hospitality brands such as Banyan Tree have been instrumental in the success of Thailand’s branded residences, expanding from Phuket to emerging locations such as Sichon and Khao Yai, located in the peaceful hills three hours north of Bangkok. Such brands provide comfort to buyers and boost the appeal of new locations.

The addition of internationally recognized hospitality brands provides another layer of comfort and quality guarantee, which is key in attracting discerning buyers who know they will be getting high standards and exceptional service. These world-class brands rarely part with their names unless the residences meet their exacting standards.

Market Dynamics in Emerging Locations

The market dynamics in emerging areas such as Sichon offer a compelling investment opportunity. With lower land costs and the promise of quality development, astute investors can get in early and benefit from the upside as these markets mature.

As the market shifts and demand rises in these emerging sectors, the initial residents will enjoy strong returns, as was the case in other markets. The pristine beaches, cultural authenticity and modern conveniences that are the hallmarks of destinations such as Sichon position it as a highly attractive growth area for branded residences.

Potential for Substantial Returns

investing early in these emerging areas can yield substantial returns as the market shifts and demand rises. The pristine beaches, cultural authenticity and modern conveniences that are the hallmarks of destinations such as Sichon position it as a highly attractive growth area for branded residences.

Thailand’s Expanding Real Estate Horizon

Banyan Tree Residences Sichon will raise the bar for luxury living in the area, combining high-quality construction, brand reputation and natural beauty that appeals to discerning buyers who want a premium lifestyle at a fraction of the price of other, more mature destinations.

The future of Thailand’s branded residences market is set to include continued and sustained growth as well as diversification. As new destinations emerge and global connectivity continues to improve, the lifestyle proposition of living in Thailand will continue to attract international buyers who are looking for both an investment and a quality lifestyle.

Developments such as Banyan Tree Residences Sichon also contribute strongly to the local economy, creating jobs and benefiting communities. By introducing high-end residential products to areas, developers can stimulate economic activity and improve the quality of life for those who live there.

Conclusion

In summary, Thailand’s branded residences sector is currently at an exciting point with new opportunities in off-the-radar locations such as Sichon. The beauty of such emerging destinations is not just their natural appeal and cultural truth, but also their potential for strong economic upside.

Forward-looking investors and developers who take note of these new opportunities will be richly rewarded as the areas develop and more people learn about the destinations. Moreover, the strategic expansion of world-class hospitality brands in these emerging areas adds credibility and appeal to the markets, providing comfort to potential investors.

As infrastructure continues to be rolled out and global connectivity improves, these off-the-radar locations provide the perfect combination of peace, modern conveniences and connectivity that are highly attractive for long-term living and investment. This reflects a wider evolution in Thailand’s tourism and real estate sectors, where saturation has set in, and the focus is now on new and attractive growth areas.

By seizing the opportunity in these emerging sectors, stakeholders can participate in sustainable development while enjoying the financial benefits of getting in early. The future of Thailand’s branded residences market is poised to be highly attractive and those who get in now will be richly rewarded as the sector continues to grow and evolve.

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