Phuket Property Investment
What yields do Phuket resort properties realistically deliver?
Direct Answer
Branded Phuket resort residences with tier-1 operators realistically deliver 6–8% gross and 5–7% net to investor after operator share, FF&E, sinking fund, vacancy, FX and withholding. Unbranded inventory and off-beach product typically land 1–2% lower on both gross and net.
Detailed Explanation
Branded resort residences benefit from operator distribution networks, brand-driven ADR premiums and pooled occupancy that smooths individual-unit variability. Net 5–7% is the realistic institutional benchmark for tier-1 product in good sub-markets.
Unbranded inventory in the same sub-market carries lower ADR, lower distribution power and lumpier occupancy. Net 3–5% is more typical, with greater dispersion across owners.
Off-beach product (inland Bang Tao, central Phuket) trades the beach-driven demand premium for lower price points. Yields can be similar in percentage terms but absolute cashflow per unit is lower.
Investor Considerations
- Branded tier-1 resort residences are the cashflow-yield sweet spot.
- Always underwrite net, never gross.
- Verify cohort data, not single-project marketing material.
Risks & Limitations
- Operator-quality variation produces wide outcome dispersion at apparent same yield.
- Pool dilution from new building releases can compress per-unit distribution.
- Tourism shocks compress yields more than capital values in cycle downturns.
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