Thailand's resort island of Phuket is fast becoming the place for the rich and famous in search of tropical island living coupled with great investment. According to the latest story by the leading hotel and real estate BLOG thephuketinsider.com, two of Forbes Magazines leading billionaires have uber luxury villas in Phuket. The Top 5 List is:
1. New Zealand's wealthiest brothers, Richard and Christopher Chandler (one brother formerly CEO of the Sovereign Group) with a fortune valued at over US$ 2 billion according to Forbes.
2. Canadian Robert Friedland,of Ivanhoe Energy and Mines, with Forbes reporting a net worth of US$1.4 billon.
3. Hong Kong's Allan Zeman, who is regarded as the Father of Lang Kwai Fong. While his personal worth remains undisclosed he is highly ranked amongst Asia's most wealthy and influential businessmen.
4. Finnish Formula One star Kimi Raikkonen, is the latest addition, earning a reported US$ 44 million per year and ranked by Forbes as the 5th highest paid sports star and 26th highest paid celebrity.
5. The British Binatone Founder, Gulu Lalvani, rounds out the list with his globetrotting celebrity and multi-million dollar personal fortune.
thephuketinsider.com blog 'The Source for All Hotel & Real Estate News', was launched this week by Bill Barnett, the well known property columnist, hospitality consultant and Managing Director of C9 Hotelworks who is based in Phuket.
"Our passion is to provide independent and intelligent news and commentary on the rapidly developing Greater Phuket storyline. You won't find banner ads, hotel bargains, condos for sale or Google AdWords on the site, it is purely relevant information as it happens without the mass commercialization," commented Bill Barnett.
As part of its continuing liquidation program the Government's Thai Asset Management Corporation (www.tamc.or.th) has announced the sale of a number of prime land assets including a number of plots with a total area of over 1,600 rai which were recovered by the government as a result of a land scandal involving a high profile Malaysian businessman.
Borne from the 1997 financial crises the Agency was set up under Emergency Decree B.E. 2544 to handle impaired assets and transfer them from state-owned and private institutions. By the end of last year total assets under management had a value in excess of THB 75 billion.
Recently another lot in Phang Nga bay has been transacted by TAMC. Given the opening of two luxury resorts last year the Six Senses Destination Spa on Naka Yai and Six Senses Hideaway Yao Noi propelled interest in Phuket's east coast hotel market. While three new developments currently underway Jumeirah Private Island Resort, The Yamu and Taj Exotica are tapping into a geographic shift for some very large international high profile accommodation chains.
The battered Thai residential development market has claimed its first causality with high profile Chief Executive Officer and Executive Director Nigel Cornick tendering his resignation. A replacement has been announced with Hubert Viriot from Raimon's major Middle East shareholder IFA being appointed to lead the company. With sales flattening in the luxury condominium market it caters to and an over reliance on foreign buyers who have been hit hard by the continued global downturn, the group has substantial surplus units at The Heights Phuket, The River, Northpoint and a number of other projects.
IFA which is currently experiencing issues in its own backyard is injecting cash back into Raimon, which also relied on Lehman's and were negatively impacted by that firms collapse last year. The company has announced plans to defer development at the high profile uber luxury Amalfi project in Phuket which is located next to the Amanpuri. Raimon's current situation brings the shortcoming of property ownership by foreigners into a stronger light, and remains a topic unaddressed by the current Thai Government who have done little to attract overseas investment in this sector.
Nigel Cornick during his tenure was a great supporter of Phuket through key sponsorship of King's Cup Regatta, Phang Nga Bay Regatta, and widely distributed publications such as Condo Focus and Why Invest in Phuket. Raimon Land has been an important cooperative market resource and potentially a vacuum will be created by the firm's current situation.
Back of the revised Escrow Act B.E. 2551 (2008), the Land Department has now set out official guidelines pertaining to the documentation of land under an official notification. Prior to this new development officials were unable to document any ownership change which was covered by an existing escrow agreement. As per the new process any land under an escrow agreement requires that the Land Department must obtain approval prior to transfer of property and furthermore that only Escrow Agents may act. All escrow agents are to be licensed and this is restricted presently to financial institutions.
As commented in a circular issued by the legal firm Mayer Brown "These guidelines further enhance the use of escrow in real estate transactions. To maximize the protection, buyers should ensure that the escrow agent is duly licensed, and the escrow transaction is recorded by the Land Department."
Recently I had the opportunity to discuss the topic of escrow with a number of local legal firms in Phuket and while they applauded the revisions to the law, the complex nature and restriction only for financial institutions only enables significant sized transactions transaction's to utilize escrow. While in most mature property markets there are facilities for even the smallest of purchasers to obtain what is generally regarded as essential due diligence in property transactions. Hopefully going forward there are further revisions aimed at aligning consumer protection in a similar fashion to developed markets.
Clearly things are changing under the new administration of Prime Minister Abbhisit Vejjajiva. In an announcement by government spokesperson Puttipong Punnakan which was widely covered in the national media, the financially troubled program will be wrapped up. The Thailand Elite Card had been a pet project of former Prime Minister Thaksin Shinawatra which was intended to allow overseas individuals to own a limited amount of land along with long term visas, expediting immigration and discounts at many upper end facilities such as golf courses.
The company had accumulated substantial annual operating expenses since it's inception and it's ultimate parent company is TAT (Tourism Authority of Thailand). A series of proposals have been submitted to the Cabinet and it's currently unclear if compensation will be available to current members or if privatization is a possibility. No official information on the matter is currently available on the present status of the program on the website or though contacts made at the company's office.
