Building luxury condos in five-star hotel properties has become popular around the world, and is done by many famous brands such as Ritz-Carlton, Four Seasons and Mandarin Oriental.
In Viet Nam, more and more developers are embracing this new trend.
A report by CBRE said more and more Vietnamese property developers are offering hotel management services at their luxury residence projects to push up their value.
Novaland’s The Grand Manhattan is a shining example of this.
Last month Novaland Group tied up with hotel management group Minor for its first Avani-branded hotel in HCM City, Avani Saigon, at The Grand Manhattan, a luxury apartment complex the company is building in District 1.
Avani Saigon Hotel will be designed and managed to international five-star standards by Minor Hotels with 217 rooms and classy amenities including a spa, a fitness centre, an infinity swimming pool, restaurant and bar.
Novaland said in addition to the amenities, the tie-up with Minor Hotels Group also aims to bring international five-star hotel standards to residents.
Henry Pham, a businessman from Canada, said he travels a lot between cities in Asia. When in Viet Nam, he often stays in five-star hotels that can meet his requirements like full amenities, good service, room service, and 24/24 food availability.
Recently he has preferred luxury apartments especially those in the same building as a hotel and managed by professional foreign companies.
Living in these apartments, he can enjoy the five-star hotel’s services but also private space while living there.
He still enjoys all the amenities while inviting his business partners or friends to the place, he said.
“Luxury apartments in HCM City now have the same quality like in Hong Kong and Singapore where I stay. The price, however, is much more competitive. I plan to buy an apartment to stay when coming to Viet Nam.”
Leasing price up thanks to five-star hotel standards
A report from Savills Vietnam said over 50,000 grade A and B apartments have been handed over to buyers in 2018-20, 30 per cent of them bought for leasing out.
The rental yields in the first quarter were around 4 per cent for grade A and 5.2 per cent for grade B apartments, the company said.
“From 2021 the yields in these two segments will increase due to the short supply while demand will recover after the Covid-19 pandemic.”
Besides the high yields, luxury apartments’ value would increase in future.
On average, the prices of luxury apartments increase by 10 per cent a year. In the last quarter of 2019 their price stood at US$6,308 per square metre.
Compared to other cities in Southeast Asia and its neighbouring provinces, HCM City’s property market has remained attractive due to the short supply and imminent price hike. The inventory in the luxury apartment market in HCM City is now 700 compared to 30,000 in Bangkok and 8,300 in Singapore.
A report titled “Hotel Recovery Guides” by JLL said HCM City is amongst the first cities to emerge from the global pandemic.
In 2019 the Viet Nam’s hotel transaction were worth US$358 million, accounting for 17 per cent of all hotel transactions in Southeast Asia.
JLL said four- and five-star hotels in the central area of HCM City would attract foreign and domestic investments due to the lack of lands in these areas.
HCM City’s hospitality industry has for years been a magnet for developers since the number of tourists coming to the country has been growing at 1.4 percentage points higher than the growth in accommodation, it said.
The total supply of hotel rooms increased by 7.6 per cent during the period analysed (2016-19) in the report while visitor arrivals saw a 9 per cent compounded annual growth rate.
While the city has the highest number of rooms in the whole country, its luxury rooms number only around 9 per cent.
Experts therefore predict that housing-hotel complexes will attract both developers and buyers.