Which is the most attractive investment channel in the last 6 months of 2019?

Since 2018, resort real estate has slowed down in key markets due to the massive supply. With the current developments, experts think that in the last 6 months, resort real estate will regain its position as an attractive investment channel.


New changes of the resort market


In the first half of 2018, resort real estate witnessed a strong rise of emerging markets such as Quang Binh, Phan Thiet (Binh Thuan), Tuy Hoa (Phu Yen), Da Lat and Quy Nhon (Binh Dinh), Thanh Hoa, Hai Phong... While traditional markets are quite quiet, a series of new resort projects launched in the first half of 2019 are concentrated in these markets.


Ms. Duong Thuy Dung, Senior Director of CBRE said that emerging markets will thrive in the future because of the great potential from the long coastline, beautiful natural landscapes and the number of rooms, especially high-class accommodation establishments are very few.


Also according to Ms. Dung, Quy Nhon currently owns 134km of coastline but has just over 1,000 rooms. This figure in Thanh Hoa is about 1,700 rooms with 102km of coastline. Quang Binh has 116km of coastline but only about 1,000 rooms. The coastline is quite long (125km) but Hai Phong has only about 700 rooms for tourists. The scarcity of accommodation products in tourism-rich markets is the premise that these are promising lands in the near future of resort real estate.


The segment of resort real estate now have a flexible segment in terms of price.


What makes the emerging markets attractive is not only the tourism potential, the high-end supply, but also the value of investment. Currently, an investment in these markets is only half, or even one-third of similar products in the key resort markets. For example, a condotel in Nha Trang, Da Nang, Quang Ninh has an average price of 2-4 billion VND/unit, a hotel apartment in Da Lat only cost about 1.2 billion VND/unit, Phu Yen condotel, the expected price is from VND 700 million/unit, Phan Thiet condotel offers price from VND 500 million/unit... Also in traditional markets, if the price of a villa is up to tens of billion, villas in Phan Thiet (Binh Thuan), Phan Rang (Ninh Thuan) costs only from 4-6 billion VND/unit.


Resort real estate will be the most attractive investment channel?


According to Duong Duc Hien, director of the Savills Hanoi Housing Business Division, the hospitality real estate segment have a flexible division of prices. Many condotel projects with reasonable prices, ranging from 700 million -1 billion/unit have appeared on the market. It is not difficult to realize a problem, if investing a condotel worth 1 billion VND in a well-developed tourism area, the peak season, the rental price can reach up to 2 million VND/night. Thus, in 1 month, the owner only needs to rent 10 days to earn 20 million VND. While in big cities, the investment rate is many times larger, an apartment costs 2-3 billion but the monthly rent is only 11-15 million.


Or with the amount of 1 million USD, customers can buy a villa of urban population in big cities of Hanoi, Ho Chi Minh City or buy a coastal villa. The difference is that the difference is that, for business purposes, a coastal villa can bring a bigger profit than a villa in the city.


The segment of resort real estate have a flexible pricing. Illustration


Mr. Hien said that resort real estate is a remarkable investment option in the near future. In addition to the specific calculation, the resort real estate in Vietnam also has the coastline advantage of more than 3,000 km. This resource has not been fully exploited. In addition, tourism is identified by the government as one of the key sectors in economic development. Therefore, over time, the resort market has exploded with derivative resort products such as condotel, hometel, shoptel...


Tourism real estate is quite a specific type, so investors should pay attention to the prestige of investors when pouring money into this segment. Reputation factors need to be considered in the criteria such as who the investor is, have any experience developing in the market, have the products developed earlier been successful yet... In addition, investors need to focusing on the whole unit operating resort products.


Another important thing that all investors must pay attention to is the legality. The legislation here is not only the project legislation, but also the contractual agreement signed between the investor and the operator. The majority of resort investors come from Hanoi and Ho Chi Minh City, while the products are in Da Nang, Nha Trang, Phu Quoc... In essence, "the remote country cannot save the near fire", so if the problem arises If so, the investor cannot come immediately.


Mr. Hien added that in some projects, after customers buy products, the management unit will stand out to sign a lease contract. Therefore, investors must pay attention to every detail in the contract to ensure what the investor, the management unit commits. That is, the terms given in the contract must be strictly implemented in order to ensure the interests of investors.


According to Thien An