Beachside and resort properties in Vietnam have huge potential and investors are targeting foreigners and overseas Vietnamese as their biggest customers.

Investors should promote resorts

Le Hoang Chau, chairman of HCM City Real Estate Association, said there were about 100,000 foreigners living and working in the city and probably half a million foreigners living in Vietnam. Many of them are investors, experts and high earners.

Tran Kim Chung from the Central Institute for Economic Management (CIEM) said Vietnam received USD12.5bn in remittances last year, with 20.7% invested into real estate. It is expected the investment will increase with more supportive policies to assist foreigners and overseas Vietnamese to buy houses in Vietnam.

This is why many investors are targeting foreigners and overseas Vietnamese. However, several experts said the products investors should promote are not luxury apartments, but instead resorts at well-known destinations.

According to the property company Savills Vietnam, the profitability ratio in the regional market is low with some ratios below 1%. However the ratio of rental properties in Vietnam is about 5%. Investors even promise 9-10% for coastal resort projects.

Danang or Phu Quoc are described as potential gold mines that investors should exploit.

Hundreds of investors from Singapore attended a conference about investment opportunities in Phu Quoc recently. Sam Ong, real estate agent at Savills Singapore said Sentosa Island was a prime example about how a small fishing village had been turned into a destination. He went on to say that Phu Quoc Island had the potential to be a second Sentosa.

Even though the land and property prices on Phu Quoc are rising, they are still very cheap and this was one of the most attractive factors. A two bedroom, 110m2 apartment looking to the sea on Sentosa is often sold at over USD3m and a villa is sold at USD11m.

Meanwhile, apartments and villas on Phu Quoc are being offered at USD1m and USD3.8m-6.5m respectively.

Singaporean investor Victor Hong said an investor's reputation would decide everything. "We want to know how well-known the investor is and what they have done. I was convinced by Sun Group's investments in Danang such as their InterContinental Danang Sun Peninsula Resort," he said.

Dtinews