Amusement parks may become a trend within Vietnam’s entertainment real estate segment.
The Dai Nam Tourist Park is a famous entertainment complex within Vietnam’s entertainment real estate segment. Located in Hiep An ward, Thu Dau Mot town, in the southern province of Binh Duong, the park opened in late 2008. The huge complex consists of Dai Nam Van Hien Wonderland, Dai Nam Campground, The Open Zoo, and Dai Nam Amusement Park. It also has a shopping center, a hotel, a cinema, a theme park, a beach, and many temples, and welcomes about 2 million visitors each year.
The Park, however, closed from November 10 to December 31, 2014, then reopened in January 2015. Mr. Huynh Uy Dung, Chairman and General Director of the Dai Nam Joint Stock Company, the owner of Dai Nam Tourist Park, said the reason was it was “suffering” from the activities of the local government. Binh Duong authorities, however, rejected the claims. The Park even offered free admission and slashed ticket prices by 50 per cent prior to the shutdown.
In 2016, the Dai Nam Joint Stock Company used 60 ha to build an international racecourse at the Dai Nam Tourism Park, with total investment of around $100 million. The project includes a horse racing track, a dog racing track, a Go-Kart track, a motorcycle racing track, and a Jet Ski area. The horse racing track has a length of approximately 1,600 meters. In the first phase, its grandstand will seat 20,000 people and will be upgraded and expanded to 60,000 in the second phase. Mr. Dung hopes it will attract about 5 million visitors a year to the tourism park, up from 2 million now. The racecourse will have about 300 staff and thousands of studs for breeding.
Sun Group, meanwhile, has become a major investor in Vietnam’s tourism resort sector. In January it officially opened the biggest theme park in Southeast Asia, Dragon Park, in Ha Long city, part of the Sun World Ha Long Park entertainment complex. It is the first theme park in Asia to be managed by Spain’s Parques Reunidos, which manages about 60 other parks in 14 countries around the world.
The Sun Group also held a breaking ground ceremony last September for the Kim Quy (Golden Turtle) Amusement Park in Hanoi, which is inspired by Disneyland. A representative from the Sun Group confirmed with VET that the project’s first phase has investment of VND4.6 trillion ($227 million) and will be completed within 18 months. The amusement park is located in the capital’s Dong Anh district on an area of 198 ha and will feature an open space for outdoor activities with cutting-edge technology, including a Sun Wheel and hot air balloons. It will also comprise an arts area and the Kim Quy cultural village, which will host large-scale arts shows. High-tech amusement facilities will also be installed that meet international standards.
The BRG Group and Sanrio Wave Hong Kong, which owns the world-famous Hello Kitty character, signed a memorandum of understanding (MoU) in October 2016 to develop the Hello Kitty Park in Hanoi, the first internationally-branded park in the country. The project is expected to begin in the fourth quarter of 2018 but BRG has not released any specific information. Hello Kitty Park will provide fans living in Vietnam with the opportunity to experience first-hand the premium quality of the BRG Group’s range of products and services. At the signing ceremony, Ms. Nguyen Thi Nga, Chairwoman of the BRG Group, said that its cooperative efforts with Sanrio Wave are directed at the development of a unique, creative entertainment market, meeting demand among children. The cooperation is regarded as an important milestone, marking a transformation in Vietnam’s children’s entertainment market.
The Cocobay Da Nang amusement complex was built by the Empire Group and is one of the major projects in the segment. Mr. Trinh Viet Hung, Deputy General Director of the Empire Group, told VET that Cocobay has an indoor stage, an outdoor stage, and other entertainment areas. “Many parts of the Cocobay project will go into operation in the third quarter of 2017,” he said.
Demand for entertainment has increased in recent years as incomes have risen. Entertainment real estate is receiving a lot of attention, with major projects coming from large groups in recent times. Ms. Do Thi Thu Hang, Head of Research & Consultancy at Savills Hanoi, said that the development of theme parks in the entertainment real estate segment will become a trend among investors in the near future. The potential of the segment comes from the high demand for entertainment among Vietnam’s young population, where more than 60 per cent of people are under 35 years old and most are middle class. “Vietnam still lacks amusement parks to meet the needs of its people,” Ms. An said.
A representative from the Sun Group said it believes Vietnam has potential for the development of tourism, entertainment and resorts. According to Ms. Hang, with the significant number of tourists the segment can attract, entertainment property may be considered a catalyst, attracting greater demand in other real estate segments such as retail or resorts. Hanoi’s population stands at more than 8 million people but it still lacks a large entertainment area, so Chairman of the Hanoi People’s Committee Nguyen Duc Chung said that the capital will build 25 parks, in particular five parks of international standard, in the next five years. The People’s Committee has approved a list of 28 parks and entertainment areas seeking investment.
The Vietnamese Government hopes that Vietnam’s tourism sector will become a spearhead industry by 2020, with international visitors to reach 18 to 20 million and domestic tourists 80 million, bringing in total revenue of $33 to $35 billion. There are approximately 5 million Vietnamese travelling abroad each year, spending about $6 billion, according to the Vietnam National Administration of Tourism (VNAT). Its figures also show that international arrivals to Vietnam reached 10 million as at the end of 2016, an increase of 25 per cent compared with 2015, together with 62 million domestic tourists. Total revenue was VND400 trillion ($18.2 billion).
Mr. Vu The Binh, Vice Chairman of the Vietnam Tourism Association, predicted that 2017 will see stable development trends if appropriate policies are introduced. “International tourist arrivals will increase 20 per cent this year,” he believes. “Travel demand among domestic tourists will also increase because travel has become more common, so there must be major investment in tourism destinations to diversify products and meet the demand of local tourists for new experiences.”
Developers and investors, on the other hand, face many challenges. The closure of the Dai Nam Tourist Park reveals the problems investors and developers can have with authorities and policies. According to real estate experts, inconsistent and non-specific investment policies are why entertainment real estate has not attracted investors. Mr. Tran Ngoc Quang, Secretary General of the Vietnam Real Estate Association (VNREA) said that investors tend to be very selective about entertainment real estate.
The “first generation” of amusement parks in major cities has seen some initial success and attracted large numbers of visitors, according to Ms. Nguyen Hoai An, Director of Research and Consulting Services at CBRE Vietnam. There are many theme park projects in operation, such as the West Lake Water Park and Thien Duong Bao Son in Hanoi, the Dam Sen Water Park in Ho Chi Minh City, and Lac Canh Dai Nam in Binh Duong. There is also Vinpearl Land Nha Trang and Phu Quoc, as well as Vingroup’s Times City and Royal City urban areas. Experts, however, have said that many amusement parks are generally considered to be unappealing.
Mr. Pham Trung Luong, Deputy Director of the Institute for Tourism Development Research (ITDR) under VNAT, said that most entertainment parks in Vietnam lack originality. “Most are also in the north and the south, while the central region has great potential but seen little investment,” he said. Similarly, Ms. Hang said that projects have little in the way of innovation to meet demand.
Investors also needs significant capital to invest in entertainment real estate, she went on. “The time needed to recoup investment in the segment is long,” she said. “Entertainment real estate projects are also under considerable pressure from similar projects in the region, which have a well-developed entertainment real estate segment.”