USD 20 billion for Tourism Real Estate Market
Besides the real estate segment of housing, office for rent, the local and international investors are interested in tourism real estate. Recently, a statistics said that there are 20 international investment funds with more than $ 20 billion waiting for pouring into the potential market.

High demand for villas

In 1997, Coco Beach Resort which was open at Mui Ne ( Phan Thiet) was considered as a new resort model in Vietnam. However, at that time, the scale of the resort is relatively small (30 bed rooms included), which did not make sense with investors. Today, there are many successful high-end resorts such as Furama, Life Resort, Vinpearl… which result in a highly increase in the segment. Investors do not only implement the traditional functions of resort such as entertainment, relaxation, but they also launch commercial villas in resorts.

According to Mr. Than Thanh Vu, CEO of Phu Quoc Land Co., this business is very popular at Phuket (Thailand), Bali (Indonesia), Gold Coast (Australia)…because of its high profit. Secondary investors might buy villas from real estate companies and have leasing for tourists. Leasing, after deducting operation and management cost, will bear revenue to them. Moreover, investors have a chance to relax in their villas in a few weeks for free. If they do not want to own these villas, they can sell them to others for profit.

In Vietnam, the pioneers of this business are Hung Vuong Construction and International Cooperation who sold 400 villas at Resort Flamingo (Vinh Phuc Province); Paradise Resort sold 150 villas near Ngu Hanh Son (Danang); Suoi Nuoc Ltd. Co. sold 105 ones at Aquaba Resort (Phan Thiet); and villas of An Vien Co. (Nha Trang), Mui Ne Domain, Sea Link (Phan Thiet)...Certainly, international investment funds are interested in it as well. The resort of Nam Hai (Indochina Capital) included 100 luxury villas is being sold to international investors. However, because foreigners are not allowed to own long-term house in Vietnam, The Nam Hai has transferred usage agreements to secondary investors by selling long-term leasing right (up to 50 years)


According to Mr. M.Townsend, CEO of Real Estate Marketing and Management CBRE Vietnam, one of the big challenges of tourism real estate market is the shortage of human resource and professional management. Most of local areas have the high potential in developing resort belong to Middle, where human resource is unskilled and low. He also said that when opening resorts in the Middle, majority of high-end management human resource is recruited from Hanoi and Ho Chi Minh City. Hence, the cost increases as well. Besides, the lack of infrastructure also affects Vietnam tourism. Vietnam has not got standard highway. Furthermore, Middle hasn’t got modern airports. Da Nang, Nha Trang airports do not meet the demand of both Vietnamese tourists and foreign tourists.

Mr. Tran Minh Ca, Vice President of Quang Nam People’s Committee said that, the province is calling investment for resort complexes so as to deploy the potential of eco-tour and the culture and heritage of Hoi An and My Son. However, the shortage of modern roads makes investors confused.
Finally, the resort deployment without integrated planning has the risks of ecosystem destruction in Vietnam. For example, 2-3 year ago, Van Phong was one of the most beautiful and cleanest bay of Vietnam. However, the unstructured construction destroyed the scene and caused highly pollution there.

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