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Shangri La Phuket Resort & Spa projection: idle for now

Few Skirmishes for Phuket Property: US Report

Wednesday, April 29, 2009
AN ARTICLE in the influential New York Times asks by way of an introduction: ''When there's blood in the streets, can you sell real estate, even if it is your own?''

In contrast to encouraging reports that Phuket's property market is thriving despite the global downturn and political turmoil, the piece in the US newspaper's online site is headlined: ''Turmoil Stalls Phuket Vacation Home Boom.''

Author Alex Frew McMillan visited the island and talked to key people, including Gulu Lalvani of the Royal Phuket Marina.

McMillan was told there have been no property sales at RPM since Lunar New Year, in late January.

''People are not in the mood to buy second homes,'' said Mr Lalvani, whose own Grand Villa covers 1900 square metres at the entrance to the marina, with space for three yachts in front of an expanse of lawn.

Even more to the point is Larry Cunningham, chief executive of Phuket One Real Estate, who told McMillan: ''The market is not slow in Phuket; it is dead. It is absolutely dead.''

In the first local reaction to the NYT article, resort and property consultant Bill Barmett of labeled the piece ''a harsh assessment.'' He concluded: ''The prospects of market recovery remain fundamentally solid.''

In the NYT, McMillan recognises that advocates of the Phuket market have long described it as ''bulletproof,'' ironic in terms of the street skirmishes and an assassination attempt in Bangkok over the Songkran holiday.

'The island's property advocates ''are starting to pick their words more carefully,'' McMillan writes.

He looks at some specific projects.

''Across the road from a sign pointing to 'Tomato Beach,' construction on Shangri La's Phuket Resort & Spa stands idle, a watchman and a guard dog the only signs of life.

''The development, which would have had a residential component, is stalled indefinitely, as its backing came from Lehman Brothers, which is now defunct.''

He notes difficulties or delays at three Lersuang Group sites, the Four Seasons project in Rawai, Raimon Land's Amalfi villa project in Surin, and trendy east coast developments The Yamu and Jumeirah Private Island.

Sales at Richard Ellis are down 50 percent on last year and have been ''particularly slow'' in the first three months of this year, McMillan was told.

The article contrasts sharply with a recent report from Colliers International Thailand.

Based on market research, the number of residential units for sale in Phuket peaked in 2006 with 1473 units for sale, but dipped last year by 44 percent.

This year, however, the figures have rebounded and show a healthy growth, the Colliers report concluded.

While the image that the Phuket market is distressed was rejected, the New York Times article concludes: ''Although some Thai banks claim they offer mortgages to overseas citizens, local expatriates say that is window dressing, and no such mortgages ever get approved.

''Phuket's boosters hope the fact that it is a cash market will be its salvation.''

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