Investing in condotels: Earth better than paradise
The strong growth of Viet Nam’s tourism in recent years has given a significant boost to the country’s leisure real estate sector, especially condotels. However, is it always a good idea to invest in condotels? Many veteran investors do not think so.
Kiều Cao Bằng, a seasoned real estate investor who was among the first to invest in condotels when they were introduced, showed up early at a new project launch ceremony in Hà Nội to learn as much as he could about the investment opportunity.
Bằng is no stranger to the investment model, having invested in several condotel projects at “paradise” destinations across the country, and this time, he decided to put his money in an apartment near the city’s downtown.
Việt Nam has seen impressive growth in its tourism sector in recent decades. From five million international visitors and 10 million domestic tourists in 2010, the sector has grown to 28 million international visitors and 62 million domestic tourists in 2016.
This has led to the golden age of condotels with numerous projects being built across the country, not only in popular tourist destinations such as Nha Trang, Đà Nẵng and Phú Quốc, but also in the coastal towns of Quảng Ninh, Hải Phòng, Thanh Hóa, Phan Thiết and Vũng Tàu.
“Paradise” Phú Quốc, a popular destination among tourists and home to many condotel projects.
Not trying to play down the potential of such projects, Bằng, however, believed that the sheer number of condotel projects in the coastal areas will introduce new problems for potential investors.
Drawing from his own experience and real estate experts’ analysis, Bằng said the market may soon hit a point where supply will greatly exceed demand.
He said condotels in coastal areas are no longer “sold out” as they once were during the holidays, with management having to lower the price to attract more customers.
In addition, the tourism sector has always been prone to fluctuation and can easily be affected by numerous factors, including adverse weather conditions, making it not the ideal choice for investors looking for a stable source of income. The coastal city of Nha Trang experienced a sharp decline in the number of visitors in 2014-2015 as international arrivals from both China and Russia plummeted.
A shifting trend
Bằng said the once wildly popular investment model is losing its appeal for investors as profit slowly dwindles. New projects, either under construction or soon to be introduced in the market, will continue to drive profit down even further.
Like many of his peers, Bằng noted a shift in real estate investment from coastal areas to the country’s large cities such as Hà Nội.
As more international companies and organisations look to set up their operations in the city and its neighbouring provinces, the number of high-ranking business personnel is set to increase in the near future.
A recent survey indicated that business CEOs and their families residing in Hà Nội are willing to spend on average US$2000-$7000 per month on accommodation, but they are looking for five-star luxury services, security and location near the city centre, which can typically be found in high-end condotel projects.
In contrast to condotels in resort towns, which may yield return rate of 10-12 per cent per year, city condotels yield higher return rate and have proven to be more stable.
There is a shifting trend among investors to move their capital to condotel projects in major cities such as Hà Nội.
Most foreigners working in Việt Nam only stay for a fixed period of time. It makes the most sense, therefore, for them to rent an apartment or acquire one with a 50-year lease, according to a real estate agency that caters to this niche segment.
However, they often have high standards and expectation for their accommodation.
“I’ve done a lot of research on most of the condotel projects in Hà Nội. There are only a handful that meet all the demands of foreigners, including central location, less traffic, five-star luxury services and managed by internationally known companies,” Bằng said.
After much thinking, Bằng decided to invest in the 5 Seasons condotel project by TNR Gold Season.
“Not only does it have prime location near Hà Nội's downtown, but the project is also equipped with exclusive free-for-life facilities, such as a residential gym, yoga centre, swimming pool and Jacuzzi, as well as sauna rooms, pool tables and several other five-star hotel standard facilities.”
“The starting price for an apartment of this project is some VND1.6 billion (US$70,000), which is quite low at the moment and therefore there is great potential for profit in the future. That’s why I decided to invest my money. I’m confident about my decision and I don’t want to miss out on this investment opportunity,” he added.
At 9h00 am on 10th, Sep 2017, the workshop “The condotel investment opportunity in Ha Noi” will take place at the 24th floor, TNR Tower, 54A Nguyen Chi Thanh street, Ha Noi.
The event welcomes financial and investment consultants, as well as provide information about great condotel investment opportunity in Ha Noi’s downtown with the profit up to 10%
For more informations, please contact our agent:
+ 097 123 5586 - Hải Phát
+ 097 120 7979 - Phú Quý
+ 0936 090 566 - An Phát Hưng