Mr. Richard Leech, Executive Director of CBRE Vietnam, tells VET about the resort real estate market following the introduction of new legislation.
■ Three months have now passed since two pieces of legislation - the Law on Housing and the Law on Real Estate Business - came into effect. What positive effects have you seen from these on business performance and transactions in resort real estate projects?
The main effect has been felt in new condo launches, mainly in the south, such as the Vincom, Sonkim, Keppel, and CapitaLand developments, where at least 50 per cent of sales have been to foreigners and we suspect that total sales to foreigners in the south may be as much as 20 per cent.
With regards to resort real estate projects there have not been many new launches if you exclude the luxury villas from Vincom and Sun Group. However, we expect this to increase in the short term with a variety of villa and apartment products on Phu Quoc Island and in Da Nang to hit the market soon that will appeal to foreign buyers.
■ Have you received any requests from resort real estate developers or have any plans to help resort real estate projects approach more foreign investors and homebuyers?
Yes, we have, and we expect this to continue as clarity settles on the details of the new Law on Real Estate. Our clients have mainly been luxury developers with products selling at $800,000+.
Obviously these are exclusive products with limited numbers available. Guaranteed rental returns and the ability to use other products in other locations within the developers portfolio of properties adds to the attractiveness of these projects.
■ What are your thoughts on the major opportunities and challenges facing the development of resort real estate projects in Vietnam compared with other countries in Southeast Asia?
The major opportunities are based around price and location and Vietnam has an advantage in both. Rental yields in Vietnam are particularly competitive against other Southeast Asian locations at the moment. Vietnam’s tourist potential is growing rapidly, with improved infrastructure and a variety of destinations on offer.