Although Condotel is the form of termed ownership, it is always a sustainable investment trend, despite how fierce of the launching race of the product line to renew the market.
When “demand” is originated from “supply”
In recent years, the property market has overpassed a very strong wave of this type of apartment with overwhelming number of transactions to the market.
The Condotel is a combination of two concepts “Condominium” and “Hotel”. To be equipped with close utilities as a regular apartment, the customers possessing this type of apartment also enjoy the value, high-class services of a hotel such as swimming pool, restaurant, 24/24 room service, health club …
Thus, customers can both use it to live and can sub-lease as a hotel room.
This model is quite developed in many regions of the world. However, it is quite new in Vietnam and mainly concentrated in the tourist localities such as Da Nang, Nha Trang, Phu Quoc, Ha Long …
Prof. Dang Hung Vo, former Vice Minister of Natural Resources and Environment proposed that the development of resort tourism segment is a must in Vietnam because of the great tourism potential and impressive growth speed.
In the past 7 years (2010-2016), the number of international visitors has increased twice, from 5 million to 10 million arrivals. In addition, domestic tourists also increased significantly from 28 million to 62 million arrivals. This has brought the golden age for the resort real estate market, especially the condotel model.
In addition to the opportunity for taking vacation, investors will also have additional income from participating in the rental program. The difference between condotel and other types is that instead of investors must look for customers and manage by themselves together with accompanying problems, Condotel will have a specialized unit responsible for managing the sublease as well as its daily activities.
In addition, the fixed profit commitment of around 10-12% /year has brought new energy into this special segment.
The development of the condotel apartment in famous tourist areas and large cities such as Hanoi and Ho Chi Minh City are clearly different.
Though the tourism market is developed, it is volatile and may be affected by a lot of factors. Accordingly, this market is easy to fall into the situation that the “demand” does not catch up with the growth speed of the “supply”.
Meanwhile, in the big cities like Hanoi or Ho Chi Minh City, the condotel trend is safer.
These places have a lot of large, 5-star hotels, but privately-owned resort properties with stable profitability are not many. In addition, the number of foreigners coming here to work is larger, together with the demand for accommodation during their stay in Vietnam, making Condotel become the top choice.
However, even in these cities, the ownership habits are also very different. In Saigon, the concept of “Condotel” is quite wide-known while in Hanoi market, investors tend to be cautious. Only major projects attracted investors here and made them consider about “pouring the money.”
However, Hanoi is a potential market. In recent years, the development and expansion of foreign businesses in Hanoi as well as neighboring provinces have led to a growing number of foreign high-level personnel.
According to the survey, rental budget of this type of customers varies from USD 2,000 -7000 /month. With quality projects, accompanying services meeting 5-star standards, secure condition and harmonious facilities (usually converging in a condotel), they are willing to pay for the high rental rate.
Recently, at a large-scale condotel project in Hanoi, the owner has generously offered a lifetime free privileged service system for residents such as gym, yoga, meeting rooms … while so far, even in large projects, these services are only free for several years.
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This move is expected to create a new trend in polices among owners.
Therefore, in the multicolored picture of the condotel segment, the last biggest beneficiaries are still customers. And in the fast growth of various kinds of real estate segments, the condotel continues to affirm its position and continues to be the most sustainable developed product line.
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