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Property

CBRE: Domestic investors retain strong appetite for hospitality sector

Released at: 17:55, 19/06/2017

CBRE: Domestic investors retain strong appetite for hospitality sector

Photo: Long Beach Resort Phu Quoc

Latest CBRE report notes robust demand in metropolitan and resort destinations in first quarter.

by Doanh Doanh

Real estate investment activity in metropolitan and resort destinations continued to strengthen amid robust demand from domestic and foreign buyers, according to latest report from real estate consultants CBRE.

Vietnam saw around 3.2 million foreign arrivals in the first quarter of this year, an increase of 30.6 per cent year-on-year.

CBRE identified that the large number of new developments, which are largely of a resort nature with many villa developments proposed, is causing concern regarding potential oversupply.

Vietnam continues to see an influx of international hotel management corporations setting up operations in the country.

Major transactions occurred on Phu Quoc Island, with the Sulyna Hospitality Hotel Restaurant Travel Service Co. buying 70 per cent stake, equal to $15 million, in the Long Beach Resort Phu Quoc. Stretching along a pristine beach, Long Beach Resort has 118 rooms opened in its first phase and possesses unique architecture resembling a traditional Vietnamese village, while offering a new standard in exclusive and bespoke indulgence.

CBRE’s report also noted that domestic investors retain a strong appetite for hospitality sector investment. Some groups are looking to purchase development sites and en bloc properties outright, while others are more open to forming joint ventures with foreign investors.

There continued to be a large volume of overseas capital looking for a home in the first quarter. Asian groups have been especially active in seeking hotels in large cities and resort destinations. South Korean buyers have been focusing on three- and four-star hotels in Ho Chi Minh City, while the tourist destinations of Da Nang and Hoi An have also seen solid demand for hospitality assets.

Asian developers and companies have been very active in the market in recent quarters as they continue to be lured by the high yields on offer in Vietnam.

The other main driver of investment demand at present is Vietnamese conglomerates.

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