Vietnam’s second home market surviving the tsunami marc townsend, managing director

Case study – Vietnam & ThailandA Thailand’s 2 bedroom doublepool, beach villa in Phuket in Thailand A Vietnam’s 2 bedroom, beach front villa in the Central of Vietnam Range 5 star plu

Vietnam’s Second Home Market: Surviving the Tsunami

Presented by: Marc Townsend

Managing Director

21 September 2010

The Headlines

From the News…

“14,500 High Class Apartments to be Launched in Danang”

Phap Luat TPHCM, Friday, 10 September, 2010, Issue 2571,

Page 11.

“Danang: Nearly US$3 billion invest

in 55 Tourism Development Projects”

Cong An Nhan Dan, Monday, 20 September,

2010, Issue 1881, Page 7.

0 500 1000 1500 2000 2500 3000

Villa Projects Launched (2006 – 2010)

ƒ In the North: the first vacation villa project launched in 2009

0 500 1000 1500 2000 2500 3000

Condo Projects Launched (2006 – 2010)

ƒ In the North: the first vacation condo project launched in 2008

ƒ In the Centre: the first vacation villa project launched in 2006

ƒ In the South: the first vacation villa project launched in 2006

Source: CBRE

Condo & Villa Supply by Quarter 3/2010

396 961

5,207 1,374

986

2,983

South Centre North

Where to Invest?

Gold is on the Rise – No Official Trading Floors

Where to Invest?

Stock Market – Moving Forward

Asking Prices for Villas

Sea Link

Million USD

Dune Residence Furama villas

Ocean villas Hyatt Regency

Mui Ne Domain

Sanctuary Ho Tram

Six Sense Con Dao

Son Tra Spa & Resort

Ocean villas Mongomerie Link

Asking Price – Condos

Price range (USD/sqm)

Olalani IRT

Da Nang Plaza

Hyatt Regency

Blooming Tower The Cham

Azura

Bau Thac Gian

Golden Square The Summit

Vinh Trung Plaza

More than the Beach

ƒ Planning the Layout

• Move off the beach

• Utilize your geography

Wave of the Future

ƒ More Facilities

• Marina focus (yachting/sailing)

• Spa focus (health/wellness)

• Golf focus (relaxation/health)

• Beach Sports (jet skis, kite surfing, sailing, etc.)

• More middle-range and entry-level products

Development Plans

More than the Product

Property Ownership

Legal & Tax Issues

Ownership (for expats only) Capital

Gains Tax

Withholding

Tax

Singapore Freehold Leasehold

Freehold in Sentosa Cove only

Malaysia Freehold Freehold ( Minimum transaction

value/unit: 80,000 USD – Malaysia -

my second home program)

RCI Vietnam New Affiliation (2010)

Co-Branding the Development

ƒ Consider branding

• Provides name recognition

• Provides proven systems

• Assists in the overall design and operation of the

development

• Perceived value to buyers

Name Recognition & Quality Expectations

Developer Buyers seek those with a track record, high

credibility of developer to reduce risks

Operator Reputed, strong name in Hotel Operation

Good name of Operator could increase credibility of the project

Rental

pool

• Clear and transparent

• Fair profit sharing between buyer and operator (tend to move from 50/50 to 70/30)

• Free common area facilities

• More benefits to buyers: residence club, residence exchange program…

• Low and reasonable Cost of Good Sold

Return on

investment

5 ~ 7%/year – Guaranteed

Marketing Your Project

ƒ Expansion of digital marketing

ƒ Co-Branding / Joint marketing with relevant

brands/products

ƒ Creating a market

Development Plans

International Style Marketing Campaigns

• Brochures: printing & e-brochure

• Print Advertising (Magazine, Newspaper, Classified Ads)

• Events: pre-launch, launch, after-launch, co-events

Digital marketing

Digital marketing - benefit

ƒ Reach: 24% of the population in Vietnam are internet

users

ƒ Targeted: many online advertising options allows the

campaign to target specific groups of clients/community

ƒ Personal: Direct one-to-one interaction with the user

that is trackable

ƒ Measurable: tracking applications such as Google

Second Home Market – Who is Buying?

Overseas Vietnamese 10%

Local people - from Hanoi 40%

Local people - from HCMC 30%

Expats (resident & non- resident) 5%

Local people - from other cities 15%

Profile of the Second Home Buyer

Unmaried couples 2%

ƒ Average age is 38 yr old

How Buyers find their Second Home?

Internet using to search home

Using internet

to search home 75%

Not using real estate agent 11%

First learn about home purchased via

Internet 46%

Ads 30%

Others 24%

Vietnamese Property Searches

Financing a Second Home Purchase

Finance home buying 14%

Paid home buying 86%

Cash or Credit

ƒ Savings is chief source of finance

ƒ Interest rates are still considerably higher when

compared to other countries

A Regional Comparison – Vietnam & Thailand

Second Homes: Who is Buying?

Foreigners 15%

Local Vietnamese 85%

Vietnam second home market

Hongkong 27%

Singapore, Malaysia, Middle East 23%

Local Thai 18%

European 32%

Thailand second home market

Vietnam vs Thailand Market

Grade Vietnam Thailand

Luxury Central VN : > US$ 1.5 million

Phuket : > US$ 2.5 million

253

135

High-end Central VN : US$ 0.7 ~ US$ 1.5 million

Phuket : US$ 1 ~ US$ 1.25 million

228

212

Mid-

range

Central VN : US$ 0.2 ~ US$ 0.7 million

Phuket : US$ 0.425 ~ US$ 1 million

Villa Sales: Vietnam vs Thailand

Vietnam’s Second Home Market

Grade Vietnam Thailand

Luxury Central VN: > US$ 0.5 million

Phuket: > US$ 1 million

515

0

High-end Central VN : US$ 0.2 ~ US$ 0.5 million

Phuket : US$ 06 ~ US$ 1 million

1,030

367

Mid-range Central VN : US$ 0.1 ~ US$ 0.2 million

Phuket : US$ 0.3 ~ US$ 0.6 million

643

713

Entry level Central VN : < US$ 0.1 million

Phuket : <US$ 0.3 million

1,416

1,237

Condo Sales: Vietnam vs Thailand

Vietnam’s Second Home Market

Case study – Vietnam & Thailand

A Thailand’s 2 bedroom

doublepool, beach villa in Phuket

in Thailand

A Vietnam’s 2 bedroom, beach

front villa in the Central of Vietnam Range 5 star plus, local developer 5 star plus, local developer

Ownership

(Expats)

Land: Leasehold, 4x30 years Villa & furniture: freehold

Land & villa: leasehold, 70 years

Type Two bedroom, doublepool villa

with Thai sala

Two bedroom, beach front

Facility - Private pool, wading pool

Case study – Vietnam & Thailand

A Thailand’s 2 bedroom doublepool, beach

villa

A Vietnam’s 2 bedroom, beach

front villa

Rental pool - Reputed international operator

- Guaranteed, fixed rental return – US$

180,000 (7.3%/year) If the fixed return is not achieved, investors will automatically receive the variable return

- 60 days complimentary use annually

- Complimentary golf membership, residence club

- Access to Residence Exchange Program

- Reputed international operator

- 6% - annual yield No guarantee

- 90 days complimentary use annually

- Developing Residence Exchange Program

Price - $US 2,46 million/120 years (4x30 years

Tsunami Survival Strategies

Hai Phong – Launched projects

CAT BA AMATINA

TINH THANH QUOC TE

ƒ Developer: Khai De Trung Quoc

ƒ Location: Kien An, Hai Phong

ƒ Site area: 43ha

ƒ Mix use development: villa, hotel, condo

ƒ Developer: Asset Consultant Group Ldt (USA), Techworld Capital Group LLC (USA), Vietland Group (VN)s

ƒ Location: Do Son, Hai Phong

ƒ

CAT HAI, HAI PHONG

KIEN AN, HAI PHONG

DO SON, HAI PHONG

Hai Phong – Launched projects

ƒ Developer: Thuy Duong Ltd

ƒ Investment: 40 million USD

ƒ Developer: Thuy Duong Investment

Hai Phong – Launched projects

ƒ Developer: Daso Group

ƒ Project size: 60ha

ƒ Mix use development: villa, hotel,

DO SON, HAI PHONG DO SON, HAI PHONG

DO SON, HAI PHONG

Quang Ninh – Launched projects

ƒ Project size: 64.8 ha

ƒ Land area: 265,650 sm

ƒ No of villas: 1.146 lots

ƒ Unit size: 90 sm – 375 sm / lot

ƒ Investment:

• Phase 1: US$ 20 million

KHU DO THI MOI

CAO XANH – HA KHANH

KHU BIET THU DOI THUY SAN

HA LONG, QUANG NINH

HA LONG, QUANG NINH

HA LONG, QUANG NINH

SEN VIET

Da Nang – Launched projects

HAI CHAU, DA NANG

VINH TRUNG PLAZA

Da Nang – Launched projects

ƒ Developer: Indochina Land

HAI CHAU , DA NANG HAI CHAU, DA NANG HAI CHAU, DA NANG

ƒ Developer: Vien Dong Real Estate Corporation

SON TRA PENINSULA, DANANG

SON TRA SPA&RESORT

ƒ Developer: Son Tra JS Company

ƒ Operator: Swiss-Bel hotel International

ƒ Developer: United Trust Group

ƒ Site area: 7ha

ƒ Total investment: US$30 million

ƒ Description:

Office/Commercial Center

170 rooms - 5-star hotel

3 villas (one villa sold)

88 condos

SON TRA,DANANG

Da Nang – Launched projects

LIEN CHIEU , DA NANG

KHU DO THI QUAN NAM – THUY TU

ƒ Developer: Trung Nam Group

HYATT REGENCY DANANG

RESORT & SPA

ƒ Developer: Indochina Land

ƒ Hotel Operator: Hyatt Regency

ƒ Site area : 20 ha

ƒ Description:

ƒ 5-star hotel

ƒ 27 villas

ƒ 154 condos (Block A: 9 storeys,

ƒ Block B: 12 storeys, Block C: 6 storeys)

ƒ Price :

ƒ Villas: US$1,480,000 - 2,000,000/unit

ƒ Condos: US$203,000 - 700,000/unit

DANANG BEACH RESORT

ƒ Developer: VinaCapital

ƒ Land area: 260 ha

ƒ Stage I: 2008 - 2012 includes:

ƒ The Ocean Villas: 21ha

ƒ The Dunes Course (18 holes) by Greg Norman

ƒ JW Marriott 5-star Resort Hotel

ƒ The Promenade Residence

ƒ Dune Residence

ƒ The Cham

ƒ Price:

NGU HANH SON DISTRICT, DANANG

Da Nang – Launched projects

NGOC DIEN STR., DA NANG

Da Nang – Launched projects

ƒ Developer: GHM (General Hotel Management)

ƒ Project size: 31 ha

ƒ Mix use development: villas, hotel

ƒ Unit size: 1,227 sm ~2,237 sm

ƒ No of villas: 40

HOI AN, QUANG NAM DIEN BAN, QUANG NAM

ƒ Developer: Fusion Group

TRAN PHU, NHA TRANG,

KHANH HOA

BEST WESTERN NHA

TRANG PLAZA HOTEL

ƒDeveloper : Thien NhanCo

ƒLand area : 72,850 sm

ƒStatus : 50 % sold

ƒProject description: 5 star Hotel and 69 Villas

ƒPrice: US$ 400 - US$ 500/sm

PHU QUY PORT, NHA TRANG, KHANH HOA

Khanh Hoa – Launched projects

CAM RANH, KHANH HOA NHATRANG, KHANH HOA

AN VIEN TOURISM &

ECOLOGICAL PROJECT

ƒDeveloper : An Vien Group

ƒVillas & Trade & Entertainment

ƒ Developer: Eurowindow Holding

ƒ Total site area: 34.2 ha

ƒ Hotel, condo, villas

ƒ No of villas: 178

Khanh Hoa – Launched projects

CAM RANH, KHANH HOA

CACTUS CAM RANH

ƒ Developer: SJS

ƒ Total site area: 13.24 ha

ƒ Hotel, condo, villas

ƒ Investment: US$ 20,3 million

DA LAT, LAM DONG

DA LAT, LAM DONG

SACOM RESORT

ƒDeveloper : SACOM

ƒVillas & Golf course, hotel, retailing

ƒTotal Site area: 270 ha

ƒNo of villas: 500 (120 ~ 170 sqm)

ƒInvestment: US$ 115 million

ƒCompletion: 2011

HOTEL DE ROYALE

ƒ Developer: Gia Tue

ƒ Total site area: 190 ha

ƒ Hotel, villas

ƒ No of villas: 69 (120 ~ 160 sqm/villa)

ƒ Investment: US$ 51,2 million

Lam Dong – Launched projects

DA LAT, LAM DONG

NO 1 – LIVING RESIDENCE

ƒ Developer: SJS

ƒ Total site area: 13.24 ha

ƒ 600 villas, 200 detached houses, 1,000 condos, retailing

ƒ Investment: US$ 102,4 million

ƒ Completion: 2014

PHU HAI, PHAN THET

¾

MUI NE, PHAN THIET

SENTOSA VILLA

ƒDeveloper : Sai Gon Investment

ƒVillas & Golf course, hotel, retailing

ƒTotal Site area: 16 ha

ƒNo of villas: 250 (120 ~ 170 sqm)

ƒNo of condo: 150 unit

SUNSHINE HILL VILLA

ƒ Developer: Thai Son

ƒ Total site area: 7,4 ha

ƒ Hotel, villas

ƒ No of villas: 139 (250 ~ 400 sqm/villa)

MUI NE, PHAN THIET

ƒ Developer: Rang Dong

ƒ Royal Hill – 12,7 ha, 172 villa

ƒ Ocean Vista – 8 ha, condo,

557 units

SEA LINKS

Binh Thuan – Launched projects

PHU HAI, PHAN THET

¾

LA GI, BINH THUAN

DE LA GI

ƒDeveloper : 577

ƒVillas & Golf course, hotel, retailing

ƒTotal Site area: 216,4 ha

ƒInvestment: US$ 82 million

ƒCompletion: 2015

CASALLE HILL

ƒ Developer: Sai Gon Invest

ƒ Total site area: 200 ha

ƒ Hotel, 350 villas, 18 hole golf course

ƒ Completion: 2012

MUI NE, PHAN THIET

ƒ Developer: Rang Dong

ƒ Total site area: 12,7 ha

ƒ 172 villas (240 ~ 500 sqm)

ƒ Completion: 2012

ROYAL HILL VILLA

Binh Thuan – Launched projects

Ba Ria – Vung Tau – Launched projects

ƒ Developer: Refico Co

ƒ Land lots: 640 sm – 1,400 sm

ƒ No of villas: 67

ƒ Unit Size: 370 - 544 sm

ƒ Developer: Tan Thanh

ƒ Site area: 5 ha

ƒ 5-star Hotel, 60 villas

ƒ Investment: US$36.5 million

ƒ Developer: Rung Duong Co Ltd

VUNG TAU

¾

CHI LINH, VUNG TAU

NEW HORIZON RESORT

ƒ Developer : Cotecasia

ƒ Hotel, villa, restaurant, club…

ƒTotal Site area: 76.9 ha

ƒ5-star hotel, 42 bungalow, 16

ƒ Total site area: 105 ha

ƒ Hotel, 35 villas, 25 bungalow, 132 suites

ƒ Investment: US$ 77 million

ƒ Completion: 2012

HO COC

ƒ Developer: Sai Gon – Binh Chau –

Ho Coc Tourism JSC

ƒ Total site area: 12,7 ha

ƒ Investment: US$ 30.7 million

ƒ 172 villas (240 ~ 500 sqm)

ƒ Completion: 2012

SEA STAR SUITE

Ba Ria – Vung Tau – Launched project

NGU HANH SON DIST., DANANG

ƒ Developer :Saigon – Danang

LANG CO, HUE

ƒ Developer Banyan Tree Holdings Ltd

ƒ Total GFA 280 hectares

ƒ Investment:875.000.000$

ƒ Brief description : Five-star premium villa resort, hotels and spas

ƒ Facilities: Food and beverages

LAGUNA HUE

HON TRE ISLAND, NHA

TRANG

VINPEARL VILLAS

&GOLF COURSES

ƒ Developer: Vinpearl Tourism and

Trading Joint Stock Company

ƒ Land area: 75 hectares

ƒ Brief description

ƒ 18-hole golf course, 250 villas,

485-room 5 Star Resort & Spa

ƒ Launching year: 2008

ƒ Expected completion (golf course):

2010

THE IMPERIAL RESIDENCES

ƒ Developer Lac Viet Coporation

ƒ Property type Five-star international standard residential project

ƒ Facilities Five-star hotel, fitness center, swimming pools, spa, tennis court, restaurant, convention center

ƒ Total Building Area 29,790 sm

- Apartment area 13,280 sm

- Parking space 55 slots in basement and level 1

- Common area 15,795 sm

ƒ No of condos 132 units

ƒ Unit size 54-141 sm (studio-3brs)

VUNG TAU

Pipeline Projects

TRAN PHU STR., NHA

TRANG

CAM RANH BAY, NHA

TRANG TRAN PHU STR., NHA TRANG

DIAMOND BAY RESIDENCES

ƒ Developer Hoan Cau Co Ltd

ƒ Developer Hoan Cau Co

Ltd

ƒ Land Area 175 hectares

ƒ Facilities 18 hole Golf Course

CROWNE PLAZA

ƒ Developer TD

Corporation

ƒ Facilities : Hotel, fitness club,

shopping mall, swimming pool

ƒ Condo : 169 units

Pipeline Projects

DO SON, HAI PHONG DIEN NGOC STR., SON TRA, DANANG

• Furama Pool Villas 134 units

• 5-star hotel 200 rooms (4.5ha)

• International Conference room 1,000 seats

ƒ Developer: Hoang Dat Silver Shores Co

ƒ Site area: 20 ha

ƒ Total investment: US$86 million

ƒ Casino 800 sm(First Casino in Central)

584 rooms & suites, 270 rooms will soft-open in Jan 2010

ƒ Villa : 52 seaview units

ƒ Status: Soft-opening five-star resort and Crown Plaza casino complex - Jan 2010

DIEN NGOC STR., SON

TRA, DANANG

Pipeline Projects

DALAT, LAM DONG TRIEU VIET VUONG, DALAT, LAM DONG

CASALLE HILL VILLA

ƒ Developer: Saigon- Ham Tan Toursim- Saigon Invest Group

ƒ Management : Marriott International Group

ƒ Site area: 200 ha

ƒ Villa: 350 units

ƒ Five- star hotel

LAGI, BINH THUAN

33

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