July 22, 2018 17:27

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FLC Chairman: 'Investors of condotel want a recognized property and long-term ownership

16:30 | 26/03/2018

VCN- For  the enterprises, the condotel is a channel of transparent, legal and effective capital mobilization. The money poured into condotel comes from social capital, it comes from real demand and needs stability, less risk, helping businesses to reduce dependence on credit which is increasingly limited. This is the discussion with Mr. Trinh Van Quyet, Chairman of FLC Group on the sidelines of the seminar "Investing in condotel: Practices, Prospects and Solutions" held on March 16.

flc chairman investors of condotel want a recognized property and long term ownership

Why did you decide to invest in condotel? How do you feel about condotel investors' interest?

We invest in condotel simply because this is the best investment trend in the real estate market today.

This segment benefits all stakeholders from investors, businesses to management units.

With the economy, the condotel investment will benefit the economy and the real estate market as it will save land and provide incentives for the growth of related sectors such as construction, services and especially tourism - the area we are oriented to develop into a key economic sector. The immediate benefit is the robust addition of high-end accommodation, which promotes tourism, creates more jobs, attracts foreign currency, increases budget revenues from land use fees, helps the available potential of the country and promotes the image of the country to the world.

For businesses, this is a transparent, legal and effective channel for capital mobilization. The money poured into the condotel comes from social capital, ie from the real demand, and is stable, less risky, helping businesses reduce dependence on credit is increasingly limited. For secondary investors, the condotel has helped them own property and bring stable income from renting without self-managing property and self-trading.

Secondary investors deeply understand this and that is why 60% of the cash flow on the real estate market has poured into the condotel in the past year. In the segment of FLC property, the condotel is also one of the products which was received warmly by the market. The objective cause is mentioned above and the subjective cause is that the FLC condotel is usually built in an area from a few hundred to several thousand hectares, with a complete ecosystem of resorts, golf courses, entertainment, food ... creating a value that resonates by meeting the needs for living, relaxation and investment needs at the same time.

How long does it take to own a condotel with a condotel investment plan? As an experienced investor, what are your suggestions on condotel ownership in the area?

This issue has been discussed quite a lot by experts, real estate businesses to management agencies and raised many proposals. The natural psychology of investors is to have their property recognized and owned for a long time, at least enough time to recover their capital for profit. As we have seen, many localities with strong tourism have allowed the conversion of commercial land use purposes into residential land without forming residential units, thereby creating a basis for real estate buyers. Resorts in these key destinations are owned permanently. This is a very positive idea that needs to be further researched. The benefits are obvious, both to help boost the budget and to facilitate the development of a profitable segment such as condotel. With the coming drastic actions of departments and sectors, I believe we will have a consistent legal framework for condotels, and one of the hot issues is the duration of ownership which is also clarified. In terms of the owner’s perspective, the projected profit is committed to around 10% per year, what are the factors for he / she to make a profit commitment for such a long time? Commitment of profit is usually calculated carefully, basing it on the overall solutions for finance, development strategies, exploitation capacity and profitability of each project. According to the preliminary assessment, at the high-end resort projects of reputable investors with only 40-50% occupancy rate, the investor can ensure profit of 8- 10% for each customer per year; If the occupancy rate is 60% or higher, the investor will make a higher profit percentage.

The series of FLC services are always at the prime locations in provinces with strong tourism growth, such as Sam Son (Thanh Hoa), Quy Nhon (Binh Dinh), Ha Long Bay (Quang Ninh) ... The five-star standard system of utilities, in peak season, occupancy rate of the hotel system is more than 90%. In the low season with an average capacity over a one year period, an occupancy rate of 40 - 50% and more is not difficult.

In order to promote the business for sustainable development of the staying service, the Group has also launched FLC Holiday resort business in the form of timeshares - one of the most advanced resort business models in the world today.

The above factors have contributed to affirming the profit commitment that we made in our real estate projects is feasible, on the overall solution of financial efficiency, safety and security.

Thank you Sir!

By T.H (Ghi)/ Bui Diep