» » Vacation Property: Effective Alternative Investment Channel

VNRE - Amid high volatility of gold prices, exchange rates and the stock market, along with many inflation-causing risks, real estate in general and vacation property projects in particular are viewed as a secure investment channel.

Mr Nguyen Van Minh, General Secretary of the Vietnam Real Estate Association, said: Vacation property is a potential market segment as it catches the interest of many investors. The boom of vacation property projects in Ba Ria - Vung Tau, Quang Nam, Thua Thien - Hue, Tra Vinh, Binh Thuan and other provinces in the last five years has led this market to its most vibrant phase. A recent survey by Savills Vietnam showed that up to 52.5 percent of vacation home buyers want to satisfy their lifestyle.

According to the Vietnam National Administration of Tourism (VNAT), some 50 new resort projects are applying for investment certificates, while some 20 existing resort projects are carrying out second-phase expansion.

Vacation property attracts investors because timeshare, rental management and other modern management methods help them recover investment capital and earn profit. This is also the key to attract buyers. Timeshare and rental management are very popular in many countries in the world, particularly developed nations, though it remains a relatively new notion in Vietnam. Timeshare is a form of ownership or right to use a property, especially resort condominium units, in which multiple parties hold rights to use the property, and each sharer is allotted a period of time (typically one week, and almost always the same time every year) in which they may use the property. Units may be on a part-ownership or lease/right to use basis, in which the sharer holds no claim to ownership of the property. Rental management is simply an entrusted property management. With this model, both property owners and property management companies are benefiting from real estate and business activities on this property.

One of the most notable timeshare property projects in Vietnam is the five-star Blue Sapphire Resort Vung Tau which is developed by Cotec Investment and Land-house Development Joint Stock Company (CotecLand) and Asian Tourism and Construction Investment Joint Stock Company (CotecAsia). The resort, costing over VND1,000 billion of investment capital, stretches across the 450-meter Chi Linh Beach. Casablanca Villas, an ecological villa resort complex developed by Vinalinks Land Company, is the first timeshare property project in northern Vietnam. The complex is located in the Dai Lai Lake watershed, 48 km from the centre of Hanoi and takes less than 30-minute drive from Noi Bai International Airport. This complex is close to recreational and tourist sites like Flamingo Dai Lai Resort, Dai Lai Golf Course and Racecourse (about 6 km), and Tam Dao Golf Course (16km). Under the professional management of Swiss-Belhotel Group, the timeshare project generates a lot of benefits to buyers, boosts capital recovery and profitability during unemployed time. In addition, buyers can determine the time they spend with their villas or condos.

Real estate investors currently also prefer buying resort villas as their second homes for weekend relaxation, or for rent or resale. Moreover, the demand for vacation villas is rising because businessmen prefer this form as the rent rates are even lower than high-grade hotels.

Vacation property is now not only a safe investment channel, but also a right choice as it brings two benefits: Profit from leasing and access to these beautiful properties.

Reported by Giang Tu | VCCI News

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Alternative Investment said... September 14, 2011 at 2:58 PM

Alternative investments help investors hedge against poor performance in more traditional markets, like the stock market or bond market. Because alternative investments frequently tend to behave differently than stocks and bonds, exposure to alternative asset classes helps the investor manage risks without having to sacrifice potential expected returns on any one investment.