Tourism Property: Investment for Relaxation and Profit

Tourism property is a quick investment-recovering choice as it serves well-to-do people. This model is mushrooming in Vietnam, specially in beach resorts.

In vogue

The trend of big bosses from Hanoi and Ho Chi Minh City hunting for estates in suburban areas for weekend rests is no longer popular. A new trend, which has formed in Asia, is emerging in Vietnam: Buying and selling estates inside luxury resorts and hotels. After the start-up period, more and more estates inside resorts like villas and upmarket apartments are offered for sale. Tourism property is a quick investment-recovering choice as it serves well-to-do people. This model is mushrooming in Vietnam, specially in beach resorts.

The Nam Hai in Quang Nam province is one of successful pioneering resorts to apply this business model. This resort has two sections: one section with 60-room hotel to serve customers and a section with 40 villas for sale to secondary investors. To date, 36 of the 40 villas have already found new owners and the current selling price trebles the starting rate five years ago.

The success of The Nam Hai is the motivation for Indochina Land, a real estate arm of Indochina Capital – an investment bank, to continue applying this new business model to the upscale Hyatt Regency Resort & Spa on Non Nuoc beach, Da Nang City. The resort consists of a 200 room hotel, 174 apartments and 27 three-bedroom villas. The starting price for an apartment and a villa is US$180,000 and US$1.2-1.7 million each, respectively.

In expansion

Following Indochina Land, dozens of other resorts in Da Nang, Mui Ne, Vung Tau, Nha Trang and Phu Yen are applying the same business method. The coastline fromDanang to Hoi An alone has nearly 10 resorts offering estates for sale.

Olalani Resort, a short drive from the Hyatt Regency Resort & Spa, is in the final stage of construction, with three luxury villas, 88 apartments for sale and a 160-room hotel. ARIYANA villa resort, a short drive from Olalani Reosrt, will have 134 villas for sale in the first phase with starting offering price of US$1,750 per square metre.

Higher grade Vinpearl Danang Luxury Resort & Residences is situated in an ideal location on Non Nuoc beach, Ngu Hanh Son district, Da Nang. The beach is the world’s most amazing beach on the planet in 2005 voted by the US-based Forbes.

The special attraction of Vinpearl Da Nang Luxury Resort & Residences is a separate estate in a perfect serviced system and advanced facilities. To create its own identity, the investor has collaborated with international design firm, Wimberley Allison Tong & Goo Limited (the designer for 5-star Claridge Hotel in London and the world’s most luxurious Mansion at the MGM Grand in Las Vegas). Interior designer is Hirsch Bedner Associates Pte Ltd, a frequent top place holder on the ranking of Interior Design and a designer for top hotels on the globe. Landscape designer is Belt Collins International Pte Ltd – the designer for super-luxury hotels like Regent Bali, Jumeirah Phuket, and Marriott Waikoloa in Hawaii. The participation of world-leading designers will make Vinpearl Da Nang an ideal destination.

The list of resorts and hotels offering apartments for sale is prolonging. Most notable new names include Aquaba Resort (Mui Ne) and Best Western Nha Trang Plaza Hotel (Nha Trang).

After the economic crisis, the trend of investing in resort villas is widespread in Vietnam. Regional tourist sites like Bali (Indonesia) or Phuket (Thailand) have adopted this model for years and villas in resorts like Phuket Ama Puri is sold at above US$10 million each unit. Thus, the price of rate US$2-3 million for a villa in Da Nang Vinpearl Luxury Resort & Residences or approximately US$2 million for a villa at the Hyatt Regency is very attractive to investors.

Trendy investment

With such a high price, only very rich people can afford. Previously, well-to-do people purchased countryside estates for weekend relaxation but now owning estates in classy resorts like Vinpearl Luxury , Hyatt, Best Western, or GHM is a way to show off wealth.

Mr Michael Piro, sales and marketing director of Indochina Land, said: Owners of villas at the Hyatt Regency Residences can stay some weeks in a year and hire resort managers to find tenants for the vacant period in the year.

If villa owners agree to sign contracts with management companies, they will have the right to stay in their villas or apartments from one to three months a year without paying. They can use five-star facilities like restaurants and spas at a discount. Owners and companies will share profits on an agreed basis. With daily charge of US$300-400 for apartment and US$500-1,000 plus for a villa, the returns for owners are quite big if the resort is managed well.

Potential

Wrong investments in this market segment will not bring in profits for owners, according to experts. As only very rich people can afford, the estate must be of the world class.

Besides, the business result largely depends on the development of the destination. In Vietnam, there are many beach resorts but not all can make profit from this way of business. A study by property consulting firm CB Richard Ellis said that best places for tourism property in Vietnam are Da Nang, Nha Trang, Mui Ne, Hoi An and Lang Co.

Tags: Tourism Property, Vietnam Tourism