Progress was not completed, such withdrawal
Many secondary investors are stuck in progress, withdrawing at Cocobay Danang project, because this property has not been granted a certificate of use right, so it is difficult to transact and transfer.
Many secondary investors are stuck in the Cocobay Danang project.
According to Mr. Nguyen Van Sinh, Deputy Minister of Construction, there are no regulations on the conversion of commercial buildings, services, condotels into houses.
The Ministry of Construction has warned localities that the conversion of project functions from trade and services to residential functions will cause negative impacts such as disrupting construction planning, urban land use planning, increasing resident population, especially in areas where housing development is limited.
The Ministry of Public Security recently proposed the Prime Minister not to legalize condotels into houses, due to concerns about complicated security issues and pressure on social infrastructure.
Previously, the Ministry of Natural Resources and Environment issued Official Letter No. 703 / BTNMT-TCQLĐD, guiding localities on land use regimes and issuing ownership certificates for non-residential construction works. There is a condotel. But the content of this dispatch is not clear, so it does not help improve market sentiment as expected.
Back to the stuck situation of the condotel market, entrusting condotels at Cocobay Da Nang Project to the investor, Thanh Do Company, exploited the business, causing secondary investors to fall back when this investor. “Broken”, unable to pay profits 10-12% as committed. Extremely not, many investors have reclaimed their assets, but until now money has invested, but the right to use and operate the property is nowhere to be seen.
In fact, the self-exploitation of condotel business entails complicated problems, which is a headache problem, because behind the decision of self-exploitation, it must be solved from cleaning, self-maintenance, operating and welcoming guests.
Talking to reporters of the Investment Review, Ms. Nguyen Hoai An, Director of Research, Development Consultancy and Valuation of CBRE Vietnam, said that the projects of large corporations are often “mandatory.” ”The buyer must re-authorize the investor to operate. It should be noted that the buyers of these entities are mostly investors with no demand for accommodation / self-exploitation, so this obligation is actually their aspiration and the guarantee to support them. However, it does not affect the investment decision of secondary investors.
However, some projects of small investors often let buyers choose entrusting plans for business investors or self-exploitation. The drawback of this parallel business / self-exploitation model is that the maintenance process will be more confusing, unless the investor has a way of separating the self-exploitation flats and the owner-owned units.
“In terms of management, if the owner of the apartment is self-employed, it will be difficult to control the registration of temporary residence for tenants as prescribed, as well as the possibility of security problems if the tenant is a bad object”, Mrs. An stated.
In addition, if self-exploitation, apartment owners will have to work hard to find tenants, find people to welcome guests, as well as hygiene, self-maintenance assets.
Add cold water
In fact, if the condotel operates in the right and proper way, according to the model of business entrustment between the entrusting party (secondary investor) and the entrusted party doing business (investor), then the profit from This model depends on the effectiveness of the exploitation and use, specifically serving tourists and resorts.
Mai Huy Tan, an investor at Cocobay Danang Project, said that condotels should not be grabbed by the condotel to equate to condotels as unreliable real estate because in fact, condotel models are implemented by many countries. Moreover, Vietnam’s tourism market has grown rapidly in recent years and promises to speed up in the near future, which is a condotel product.
Amidst the condotel trapping and relying on the “life buoy” for tourism, the national tourism market, especially Da Nang, received news when new Covid-19 cases appeared in the community. For the second time this year, Da Nang leaders must send a “letter of apology” to tourists visiting Danang for a vacation.
According to CBRE Vietnam, due to the negative influence of Covid-19 as well as a number of other factors, in the 7 months of 2020, very few resort real estate projects are open for sale. The gloomy situation at hotels at this stage affects the psychology of investors as well as resort real estate investors, at least in the short term.
However, the Savills survey on the impact of Covid-19 on projects under construction or going into operation shows that Vietnam is still one of the countries with the largest future supply in the country. Southeast Asia, with impressive annual growth of 20% in the last 3 years.
In 49 resort real estate projects in the 4 and 5-star segments in the main resort destinations that are under construction and expected to come into operation in 2020, 26 projects (accounting for over 53%) despite being slow progress, but still rushing to complete the final steps to promptly open to welcome guests right this year. The remaining 23 projects postpone the completion time to 2021.
Most condotel projects have a profit commitment of 8-12% / year, even some projects commit up to 14%. This level of commitment is unbelievable. In fact, in countries in the region such as Indonesia or Thailand, for condotels, the profit commitment of about 4-6% / year is reasonable.