The Grand Manhattan boasts a frontage onto Co Bac Street and Co Giang Street in the heart of District 1.
Prospects of rising prices
According to a report by CBRE Vietnam, the entire Ho Chi Minh City only has around 400 luxury apartments priced from $3,500-7,000 per square metre, mainly concentrated in the heart of District 1, accounting for a humble rate of only 0.3 per cent of the total apartment supply (nearly 160,000 units).
The luxury segment is heated up with new projects like The Grand Manhattan, which was launched by Novaland at the beginning of this year. The complex comprises of three 39-storey apartment buildings with four underground floors. It is being built on an area of 1.4 hectares, supplying 1,000 luxury apartments with long-term ownership for homebuyers.
As land is scarce in District 1, the primary and secondary prices of luxury apartment have been pushed up in the past few years. Bloomberg cited data from CBRE showing that prices for luxury condominiums in Ho Chi Minh City climbed 17 per cent in 2018 to an average of $5,518 per sq.m. The firm forecasts that prices will nearly 10 per cent by early 2020 to $6,000 per sq.m.
However, the price for a typical high-end apartment in Ho Chi Minh City is modest compared to other cosmopolitan cities in the region. It is only half of the average price of $15,800 per sq.m in Tokyo, only one-third of the $25,600 charged in Singapore, and much lower than the $45,000 in Hong Kong.
Thus, the price of high-end apartments in District 1 will continue to rise, opening up more room for long-term investment.
Tran Quang Hai Long, an investor of The Grand Manhattan project analysed its prime location, developer, as well as future supply for the segment. He is upbeat that the project will generate a high yield of 25-30 per cent.
High rental yields
In addition to the potential of rising prices, the high-end projects in District 1 also hold the prospect of generating high rental yields given that District 1 is an ideal living place for luxury tourists, senior managers of multinational corporations, as well as overseas Vietnamese people.
With a good prospect for leasing, The Grand Manhattan is committed to generating a rental yield of VND1.6 billion ($68,432 million) in the first two years.
Elena Goh, a property investor from Singapore, is one of the first homeowners at The Grand Manhattan. She said that the price of high-end apartments in Ho Chi Minh City is much lower than in other markets like Hong Kong. Meanwhile, rental yields in the city can reach 4-5 per cent, compared with the 1-2 per cent in Hong Kong.
It is clear that luxury apartments for leasing in District 1 will be a sure-fire investment for long-term investors when compared with other investment channels. According to experts, other attractive investment channels are undergoing a slowdown. Condotel projects have legal problems while investing in securities involves risks and uncertainty so not all investors can afford to invest in these fields. Meanwhile, bank deposit interest rates are not so attractive to investors.
With the prospect of rising prices and high rental yields, luxury apartments in the downtown like The Grand Manhattan have become the first option of sophisticated investors, especially foreign investors who place more emphasis on sustainability.
