Since its launch half a year ago, The Grand Manhattan, a luxury condo project by Novaland Group, has been creating a buzz in the HCM City real estate market because it’s doubly profitable for investors in terms of pricing potential and high rents.
A report released by CBRE Vietnam shows HCM City market now has only around 400 luxury condos at prices ranging from US$3,500 to $7,000 per square metre, most of them located in the heart of the city.
This volume is equivalent to 0.3 per cent only of the condo supply in the city.
That is the reason why the market is abuzz with excitement every time a new luxury condo project is launched.
This is evident in the case of The Grand Manhattan, which was launched at the beginning of this year by Novaland Group.
The Grand Manhattan is a complex of three 39-storey towers with four basements each to be developed on an area of 14,000m2.
When completed, the complex will bring to the market around 1,000 luxury apartments.
The Grand Manhattan is at the corner of Co Giang and Co Bac streets in District 1
In recent times the prices of luxury condos have risen due to a short supply of land in District 1, insiders said.
Bloomberg recently quoted a report from CBRE as saying 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.
But though the prices have risen significantly, experts said they remain much lower than in other major cities in the region.
For instance, the price of a condo in Tokyo is around $15,800 per square metre, $25,600 in Singapore and $45,500 in Hong Kong.
There is no doubt the prices of luxury condos in District 1 will rise further in future.
Tran Quang Hai Long, an investor of The Grand Manhattan project analyzed 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.
The Grand Manhattan promises buyers a total rent of VND1.6 billion 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 condos 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.
Buying a condo in the heart of the city for lease is considered a profitable investment by many investors.
Explaining the reasons, experts said other investment channels are more difficult. For example, condotels now face many legal problems while stocks have become risky and depositing money in banks is not too attractive.
That is why with the pricing potential and high rents, luxury condos in the downtown like The Grand Manhattan have become the first option of sophisticated investors, especially foreign investors who place more emphasis on sustainability.