According to Savills, Vietnam is expected to become the most attractive destination for luxury real estate projects in the period 2022 - 2024.
Vietnam is a country with a growing economy with a growing number of middle classes, billionaires and high net worth individuals (HNWI). This is a group of people who want to invest in luxury real estate.
In Vietnam, all luxury real estate is managed and operated by international resort brands.
For example: Marriott has been the market leader since 2002 until now. This business has cooperated with many hotel brands in Vietnam, and will soon cooperate with the group Masterise Group to launch luxury apartments Grand Marina Saigon in the center of District 1 (HCMC). The project will be Marriott's world's largest luxury apartment complex and the first in Vietnam.
Grand Marina Saigon project (HCMC). Photos record progress at the beginning of 2022
Banyan Tree Group - an international group with resorts, hotels, spas, villas and resort condotels in 28 countries is also preparing for a project in Vietnam.
After the success of the first Vietnamese-branded resort project, Laguna Lang Co Central in Hue, the group is currently cooperating with Madison Land with a new project, Angsana Residences Ho Tram. The project has been completed and is expected to be handed over in the third quarter of this year.
Accor is also a prominent brand in the market. Globally, Accor ranks 5th in terms of number of luxury projects in 2021, up from 6th place in 2020. The brand is predicted to continue to grow and rise to the number two position globally, only after Marriott. As of January this year, Vietnam is Accor's most developed market in Southeast Asia with 12 hotel brands.
Mr. Troy Griffiths, Deputy Managing Director, Savills Vietnam said that
Branded real estate will be a very "exciting and perfect" segment for the Vietnamese market. The cooperation between leading international brands will bring global standards in residential real estate to the Vietnamese market, promoting the development of ultra-luxury housing products such as in New York, London, Dubai or major cities in the world.
Giving advice to high-end real estate investors at the Vietnam Real Estate Conference VRES 2021, Dr. Su Ngoc Khuong said that the essence of the value of this segment is brand value and software value.
In addition, according to Mr. Khuong, products in this segment often have good locations in core and central cities, so they have a lot of potential to add value in the future, in addition to brand value. However, there are also investment risks that can be encountered when participating in this market.
“When a real estate developer combines with a brand to create products for sale, the link between these two partners is usually a property management association under a 5-year or 50-year contract. or by project cycle.
However, if the brand goes bankrupt, the contract is not performed or is replaced by another brand, the software value of the brand property will be lost. This is a point that investors need to consider,” said Dr. Su Ngoc Khuong.
Research by Savills shows that the average price difference between branded and non-branded properties is 29%. For emerging markets, the figure is 44%. Meanwhile, new areas with fewer luxury real estate projects recorded double the price difference between the two types of properties.
According to Savills, Covid-19 has changed the psychology and needs of buyers,
Focus on large properties, private outdoor areas and wellness facilities. Accordingly, the world's luxury real estate is increasing in number and diversity with health-related services, accounting for 21% of services for users. In addition to standard healthcare services such as fitness centers and swimming pools, luxury real estate projects are seeing the rise of a wider variety of health facilities such as spas, saunas, spa treatments, and more. Whether.
On the other hand, buyers are also more interested in utilities for the trend of working from home. According to a report by Savills, high-speed internet is the most important convenience for buyers of luxury real estate. For the investor, besides the design standards coming from the brand, the number of customers of the luxury real estate is expanded to those who are interested in that brand.
Another notable point is that the market has seen a diversification in terms of participating brands over the past decade. If before, hotel brands accounted for the majority of the market share, but now, lifestyle brands have also entered the market.