In a significant development within Thailand’s real estate landscape, Central Pattana (CPN), a publicly-traded company on the Stock Exchange of Thailand (SET), has unveiled ambitious plans to expand its prominent condominium project, Phyll Phuket, located near Central Phuket Floresta. This expansion, encompassing nearly 700 units with a total estimated worth of 3 billion baht, is slated for launch in the upcoming year. The decision to expand Phyll Phuket is underpinned by the steady and growing demand for condominiums in the Phuket region, largely attributed to the resurgent tourism sector.
Kree Dejchai, who serves as the President of the Residential Business Division at CPN, shared insights into the notable growth observed in the Phuket property market over the past year. This upward trajectory in demand has been primarily driven by the keen interest of both local buyers and foreign investors.
“We initiated the first phase of the condo project during the challenging times of the pandemic and achieved a commendable sales rate, a testament to the remarkable resurgence of Phuket’s tourism sector. The island has solidified its position as a global destination.”
The inaugural phase of Phyll Phuket comprised three eight-storey towers, collectively housing 439 units with a combined value of 1.5 billion baht. This phase was launched toward the end of 2021 and has seen a remarkable sales rate of 70%. Construction work is scheduled to conclude in the coming month, following which unit transfers will be made to the eager buyers.
Kree anticipates that by the end of this year, phase one will be completely sold out. The revenue generated from this phase is projected to materialize during the fourth quarter of this year and the first quarter of the subsequent year. This can be attributed to the fact that buyers in Phuket have faced no obstacles in securing mortgages, thanks to the resurgence of tourism.
Interestingly, despite not actively targeting foreign buyers or engaging agencies for foreign markets, CPN has seen 15% of sales originate from foreigners, both through on-site and online channels. The majority of these foreign buyers are Russians, who are often in search of retirement homes, closely followed by Chinese investors.
Before the onset of the pandemic, CPN acquired a 20-rai plot on Mueang Naka Road, strategically situated behind Central Phuket Floresta and in close proximity to the HeadStart International School in the Mueang district. Approximately six rai of this land has been designated for the first phase of Phyll Phuket, with the remaining portion earmarked for phases two and three, both scheduled to launch in the coming year, as reported by Bangkok Post.
For the remainder of this year, CPN has outlined plans to introduce four new developments that encompass Phuket condominiums. This includes a condominium project in Bang Na and three low-rise housing projects situated near Rama II Road, Ekkachai, and the Utthayan areas. These projects will be developed under the new brand, Baan Nirada, as confirmed by Kree.
“We have set an ambitious goal to achieve 5 billion baht in revenue from the residential development business this year, a significant increase from the 3 billion achieved last year. This segment is poised to contribute at least 10% of the group’s total revenue, marking the first time it represents a double-digit proportion since our entry into the residential sector a decade ago.”
CPN reported 1.02 billion baht in revenue from the residential development business in the second quarter, contributing to 9.18% of the total revenue, which stood at 11.1 billion baht. This is indicative of an upswing from the 670 million baht reported in the first quarter, where the residential segment contributed 6.5% of the total revenue.
The Phyll Phuket Expansion: A Closer Look
Central Pattana’s decision to expand the Phyll Phuket condominium project signals a clear commitment to meet the evolving needs of the real estate market in Phuket. The project’s success in its initial phase, despite the backdrop of the global pandemic, has emboldened CPN to venture into a more expansive development plan, which will see nearly 700 additional units being brought to the market, further diversifying the options available to potential buyers.
The first phase of Phyll Phuket, consisting of three eight-story towers, has set a high bar with its impressive sales rate of 70%. These units, now nearing the end of construction, are poised to be handed over to their new owners. This phase represents a significant milestone for CPN, demonstrating that demand for high-quality properties in Phuket remains robust, even in the face of global challenges.
With plans to expand the project’s footprint in the Phuket region, CPN is clearly betting on the enduring appeal of this island destination. Phuket’s reputation as a global tourism hotspot has remained unshaken, and this expansion aligns with the resurgence of the island’s tourism sector. As travelers from around the world rediscover Phuket’s charm, there is a growing need for accommodation, making condominiums like those at Phyll Phuket an attractive investment opportunity.
Phuket’s Property Market Resurgence
Kree Dejchai, President of Residential Business at CPN, has highlighted the remarkable growth observed in Phuket’s property market over the past year. This growth is underpinned by several key factors:
- Resurgence of Tourism: The tourism sector in Phuket has experienced a robust comeback, drawing travelers from various corners of the globe. Phuket’s status as a renowned global destination has remained intact, making it an attractive location for property investments, both for personal use and as income-generating assets.
- Foreign Investor Interest: The enduring appeal of Phuket has not gone unnoticed by foreign investors. The island’s natural beauty, coupled with the potential for rental income, has attracted a diverse range of investors, including Russians seeking retirement homes and Chinese buyers looking for opportunities in this thriving market.
- Buyer Confidence: The resilience of Phuket’s property market has instilled confidence in buyers, both local and foreign. With the tourism sector showing signs of recovery, buyers are more inclined to invest in properties in the region, further fueling the demand for high-quality developments like Phyll Phuket.
CPN’s Expansion Strategy
Central Pattana’s decision to expand its Phyll Phuket project is not isolated but forms part of a broader strategy to tap into the growing demand for residential properties in Thailand. The company is poised to launch four additional developments within the Phuket region and other areas in the coming months. These include a condominium project in Bang Na, along with three low-rise housing projects situated near Rama II Road, Ekkachai, and the Utthayan areas.
Under the newly introduced brand, Baan Nirada, CPN aims to significantly boost its revenue from the residential development business. The goal is to achieve 5 billion baht in revenue this year, a marked increase from the 3 billion baht recorded last year. This ambitious target reflects the company’s commitment to diversify its revenue streams and make a more substantial contribution to the group’s overall revenue.
CPN’s efforts in expanding its residential development business are notable for several reasons:
- Diversification: By venturing into the residential sector a decade ago, CPN diversified its business portfolio, reducing its reliance on retail operations. The move into residential development is proving to be a lucrative one, especially as the market continues to show strength, even during challenging times.
- Market Response: The success of Phyll Phuket’s first phase, coupled with the promising outlook for Phuket’s property market, has emboldened CPN to explore further opportunities in the residential sector. The company’s strategy is responsive to market dynamics and consumer demand.
- Revenue Contribution: The increased revenue contribution from the residential development business is significant for CPN. This segment is set to represent at least 10% of the group’s total revenue, marking the first time it has achieved a double-digit proportion since entering the residential sector. This diversification strategy enhances the group’s overall financial stability.
- Commitment to Quality: CPN’s commitment to delivering high-quality residential properties aligns with its reputation as a leading real estate developer in Thailand. As the company expands its residential portfolio, it continues to uphold its standards of excellence, catering to the discerning tastes of buyers in the region.
Central Pattana’s decision to expand its Phyll Phuket condominium project and venture further into the residential development sector underscores its commitment to meeting the growing demand for high-quality properties in Thailand. The success of the initial phase of Phyll Phuket, achieved during the pandemic, demonstrates the enduring appeal of Phuket as a destination for both tourists and property investors.
As Phuket’s tourism sector continues to recover, the demand for accommodation options remains robust, providing a promising backdrop for CPN’s expansion plans. The company’s strategy to diversify its revenue streams by bolstering its residential development business reflects its adaptability and responsiveness to market dynamics.
With an ambitious revenue target, CPN is not only contributing significantly to the group’s overall financial performance but also setting new standards for excellence in residential development. As CPN embarks on this expansion journey, it is poised to play a pivotal role in shaping the real estate landscape in Thailand and ensuring that investors have access to world-class properties in sought-after destinations like Phuket.