Investment Plans for Holidays Presented by Richard Leech Vu Nguyen Giang Ngo Nam Tran Executive Director CBRE Vice Director NVB Holiday Club Research Manager CBRE Head of Investment Archi Group 12 May 2011
tion duct ntrod In Understand products offered onme (vacation property ownership) Timeshare (vacation ownership) INTRODUCTION You Are About To Identify good products among those being offered Make decision DECISION CB Richard Ellis Page 2
tion duct ntrod In Proximity to Primary Market Destination resorts Located several hundred kilometres from primary market Visitors tend to fly there & visit once a year for 1-2 weeks Non-destination resorts Withina2-3 hour drive of the primary market Introduction Types of Resorts Guests arrive by car, visit more frequently, and stay 3-4 days each time CB Richard Ellis Page 3 Six Senses Ninh Van Bay (Nha Trang) Ngoc Vien Islands (Hanoi)
tion duct In ntrod Location & Primary Amenities Ocean resorts Introduction Types of Resorts Lake/river resorts The Nam Hai (Da Nang) Hyatt Regency (Da Nang) Ngoc Vien Islands Six Senses Sai Gon River Mountain/ ski resorts Golf course resorts Tan Vien Villas & Resorts (Hanoi) Hoang Dong (Lang Son) Flamingo Dai Lai (Vinh Phuc) CB Richard Ellis Page 4
Spectrum of Vacation Ownership Tim mesh hare CB Richard Ellis Page 5
Tim mesh hare TIMESHARE Agenda Overview Buying Exchanging Case Timeshare Process Studies CB Richard Ellis Page 6
hare mesh Tim Concept OVERVIEW Timeshare (Vacation Ownership) The right to accommodations at a vacation development for a specified period each year, for a specified number of years or for perpetuity Source: The United States Timeshare Industry The ownership of a particular piece of real estate for a particular time interval Instead of buying the whole o, you buy that o for a specific week of the year. This makes ownership much more affordable and available to a wider group of people. Source: The Real Estate Investment Handbook A form of ownership or right to the use of a property, or to describe such properties. Multiple parties hold rights to use the property, and each sharer is allotted a period of time in which they may use the property. The share holder has no claim of ownership of the property. CB Richard Ellis Page 7
hare mesh Tim Timeshare is not about making money, but about: Overview Nature of Product Pride of ownership Getting away from it all to a place of beauty, relaxation, and pleasure A sense of predictability & permanence in an uncertain world CB Richard Ellis Page 8
hare mesh Tim Timeshare Purchase weekly increments Overview Nature of Product Villas can be deeded, right-to-use or a points-based program Many affiliated with resort/hotel companies Most associated with exchange company Nightly rentals typically available Annual fees Pricing varies by program Generally treated as real property and can be resold CB Richard Ellis Page 9
hare mesh Tim Overview Timeshare Development Timeshares began in France in the late 1960s and were first seen in the US in the 1970s. The primary idea was to trade the vacation on one property for a vacation on another property in a different location. The motivation was to be able to vacation in different parts of the world. Nearly 4,500 timeshare resorts owned by almost 10 million households are located in 81 countries North America: over 2,000 resorts ( 50% of the total) Europe: over 1,000 resorts ( 20% of the total) Entry into the field Prominent resort developers & hoteliers: Starwood, Marriott, Hyatt, Hilton, Thomas Cook, Wyndham, Accor and Disney 40% of potential buyers prefer a branded product while 21% rate it as very/extremely unimportant in their decision making CB Richard Ellis Page 10
hare mesh Tim The Shared Ownership Triangle Overview The Shared Ownership Triangle CB Richard Ellis Page 11
Tim mesh hare TIMESHARE Agenda Overview Buying Exchanging Case Timeshare Process Studies CB Richard Ellis Page 12
hare mesh Tim Purchase Motivation BUYING TIMESHARE Why would you buy? 8 out of 10 owners state they are satisfied with their purchase ¾ of all owners recommend timeshares to friends Flexibility over when, where, anw they vacation You can visit your home resort or exchange to others through companies In some programs you can even exchange for spas, cruises, hotels, and specialty tours throughout the world Economics: Owners report they save money over the long term Certainty about the availability and quality of popular resorts Safety and secure environments for family vacations Quality The quality of accommodations offered at timeshare resorts is typically of a higher standard than that of normal hotel accommodation. Many of the top hospitality brands have even developed timeshare resorts that are of higher quality than their establishetel brand. Variety for ownership or exchange Villas, apartments, lodges, cottages, catamarans, houseboats, canal boats or even cruise ships. CB Richard Ellis Page 13
hare mesh Tim Purchase Motivation Buying Timeshare Why would you buy? Amenities go beyond traditional hospitality accommodation Spacious units Resort amenities Swimming pools, tennis courts, Jacuzzi, spa and fitness facilities. Golf, boating, skiing, water sports, and amusement and theme parks on-site or nearby, planned children s activities. TOP 5 REASONS TO BUY TIMESHARE Exchange vacation Economics (buy future vacation at current rate) 42% 44% Reasonable Rate 5% ured Resort Quality 5% Favor Resort 4% 0% 10% 20% 30% 40% 50% CB Richard Ellis Page 14 Source: RCI s Member Survey (2005)
hare mesh Tim Use pattern Buying Timeshare Timeshare Guests/Owner Only 2% of timeshare owners normally return to the same location at the same time each year Use Pattern of Timeshare Owners not used at all, 9% give away/rent it out, 7% exchange timeshare, 44% household use of timeshare, 40% Source: The United States Timeshare Industry: Overview and Economic Impact Analysis, 1997 CB Richard Ellis Page 15
hare mesh Tim Hesitation About Buying High initial purchase & annual maintenance fee Motivation for purchasing was economic. Buying Timeshare Why would you NOT buy? To purchase, the potential owner must feel that the long-term savings will outweigh the initial and continuing costs. Not using the timeshare enough to justify the expense of the purchase The resort experience will not meet the expectations created during the sales presentation. Almost 20% indicated d that t high-pressure h sales techniques caused them to hesitate t before buying. The key to successfully investing in a timeshare Purchase the highest quality unit (in terms of geographic location and time of the year) at the lowest price CB Richard Ellis Page 16
Tim mesh hare TIMESHARE Agenda Overview Buying Exchanging Case Timeshare Process Studies CB Richard Ellis Page 17
hare mesh Tim Exchange Product Evolution EXCHANGING TIMESHARE Exchange Product Evolution CB Richard Ellis Page 18
hare mesh Tim (1) Through exchange agencies 2 largest & most reputable agencies Resort Condominiums International (RCI) Interval International (II) Exchanging Timeshare Exchanging Methods Most timeshares use one or the other of these firms, while some use both CB Richard Ellis Page 19
hare mesh Tim Exchanging Timeshare Exchange Process Exchanging Methods CB Richard Ellis Page 20
hare mesh Tim Exchanging Timeshare RCI International Network (6,308 resorts @2011) Exchanging Methods CB Richard Ellis Page 21
hare mesh Tim Exchanging Timeshare (2) Through independent exchange companies Exchanging Methods Owners can exchange without needing the resort to have a formal affiliation agreement with the companies Major resort companies (e.g., Marriott International) ti develop timeshare resorts & maintain a private internal exchange system (3) Through direct exchange (bulletin boards ) This requires locating an owner with the location and weeks are mutually desired. d This form of exchange saves money on exchange fees and is often sought after. CB Richard Ellis Page 22
hare mesh Tim Exchanging Timeshare Redweek.com Exchanging Methods CB Richard Ellis Page 23
hare mesh Tim Key Things for a Successful Exchange Think what before where Exchanging Timeshare Exchange Tips for Buyers Think about activities & experiences you would enjoy during your vacation Advance planning pays off Place your request as far as possible in advance of the dates you want to travel to maximize your chances of securing the vacation of your dreams Be flexible when requesting travel dates and resort locations Listing several options enhances your chance for a timely confirmation Willingness to accept a unit regardless of the size will enhance your exchange opportunities Consider a trip in the off-season or visit a lesser known destination that offers a similar vacation experience Source: ARDA, 2011 CB Richard Ellis Page 24
Tim mesh hare TIMESHARE Agenda Overview Buying Exchanging Case Timeshare Process Studies CB Richard Ellis Page 25
Tim mesh hare CASE STUDIES China 4,000 hotels and resorts CB Richard Ellis Page 26
hare mesh Tim RCI Case Studies Malaysia Home & Internal Resorts Affiliated (domestic & overseas) Limited Exchange CB Richard Ellis Page 27
hare mesh Tim Ninh Van Bay Holiday Club (NVBHC) Case Studies Opened in 2010 Is an affiliate of the Resort Condominium International (RCI) Members can enjoy vacations at 4-5 star resorts in NVBHC s system. Club Resorts Club connections (domestic) Club connections (overseas) Club privileges Club cruises and more than 4000 resorts in RCI's system Vietnam CB Richard Ellis Page 28
hare mesh Tim Member benefits Case Studies Ninh Van Bay Holiday Club 7 nights/year at the resorts within Ninh Van Bay Holiday Club or exchanged with 4,000 RCI-affiliated resorts in over 100 countries. Split, accrue, and advance their vacations using a flexible days/units system. Complimentary use of swimming pool, fitness and additional discounts on other services at the resorts. Additional privileges at luxurious merchandises Dedicated Member Service team to consult all travel needs Private butlers at our member resorts CB Richard Ellis Page 29
hare mesh Tim Resort Selection Club Resorts Case Studies Ninh Van Bay Holiday Club Ana Mandara Villas Dalat Resort & Spa, Ana Mandara Hue, Ana Mandara Ninh Binh (opening in May 2011), Ana Mandara Hoi An (expected to open in 2013), Ana Mandara Binh Thuan (expected to open in 2013) Club connections (domestic) Allezboo Resort, Seahorse Resort, Sunrise Nha Trang Hotel, Diamond Bay Resort, Hoi An Boutique Resort, and more to come. Club connections (overseas) Absolute Vacation Club, Palace Vacation Club, Legend Holidays Club, Ramada Yantai Club, etc. Club privileges Evason Ana Mandara Nha Trang, Six Senses Ninh Van Bay, Princess D'Anam Anam, Movenpick Saigon, Intercontinental Westlake Hanoi, Six Senses Saigon River (2012), Six Senses Phu Quoc (2014), etc. Club cruises Bhaya Cruises, Paradise Cruises, etc. CB Richard Ellis Page 30
hare mesh Tim Package Options Case Studies Ninh Van Bay Holiday Club 5 years 17 years 27 years 17 years Corporate Individual Individual VIP 1 room 1 room 1 room 1 pool villa No Exchange RCI Exchange RCI Exchange TRC Exchange (*) (*) Note: TRC (The Registry Collection), a brand of Wyndham Worldwide, is an exclusive Club of 5-star and luxury hotels & resorts CB Richard Ellis Page 31
Broad Spectrum of Vacation Ownership ho ome CB Richard Ellis Page 32
ho ome SECOND HOME Agenda CB Richard Ellis Page 33
VIETNAM SECOND HOME MARKET ondhome A residence that is not one's Principal Residence Key Concepts Source: Barron's Real Estate Dictionary A home that is not the primary residence of the owner but is not a rental property Terms varied: UK: holiday home US: seconme/vacation property Australia: a holiday house/home, or weekender Source: Financial Publishing CB Richard Ellis Page 34
Vietnam ond Home Market ho ome CB Richard Ellis Page 35
Vietnam ond Home Market ome Unit Price (US$) $2,000,000 $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 PROJECTS' PRICE BY LAUNCHING YEAR The Nam Hai Sea Links Mui Ne Domain Son Tra Spa & Resort Montgomerie Links Hyatt Regency Six Senses Con Dao Ocean Villas Sanctuary Ho Tram Furama Villas Vinpearl Danang Tuan Chau Ha Long Six Senses Saigon River Saint Simeon Flamboyant Flamingo Dai Lai Ngoc Vien Islands Blue Sapphire Grand Arena Hill Oceanami Dune Residences Tan Vien Villas Hoang Dong Lam Son Resort Melody Villas Swan Lake Villas Green Villas Country House Giang Huong Sunny Villas 2005 2006 2007 2008 2009 2010 2011 2012 Northern Projects Central Projects Southern Projects CB Richard Ellis Page 36
Province Profile Infrastructure Active Developers Buyer Options Vietnam ond Home Market Hoa Binh / Ba Vi / Vinh Phuc Monsoon climate with cold winters Family vacation Things to do: day trips, golf, natural landscaping Strong Governmental support (new Master Plan) Developing infrastructure 1-2 hours from Noi Bai International Airport Archi Group, INT, Beverly Investment Large variety of choice Lake/river, golf course, mountain villas, townhouses Varying price ranges Projects Unit Price Price psm Land Hoa Binh Lam Son Resort SunsetVillas US$200-350,000 or US$50-170,000 (land only) US$220-500 psm Ba Vi Zen resort US$100,000 (land only) US$190psm (land only) Ngoc Vien island US$640-870,000 US$700-800 psm The Grand Arena US$400-800,000 000 US$850-1300 psm Vinh Phuc Flamingo Dai Lai US$720,000 US$1,200 psm CB Richard Ellis Page 37
City/Province Profile Infrastructure Active Developers Vietnam ond Home Market Hai Phong / Quang Ninh Adult / young family vacation Things to do: 2-3 day trips, natural wonders, water sports Developing infrastructure Buyer Options Limited choices 2-3 hour from international airport Vinaconex ITC, Amco-Mibaek Vina, Daso Beach or city villas, townhouses CB Richard Ellis Page 38
City Profile Infrastructure Active Developers Buyer Options Vietnam ond Home Market Established tourism destination in Vietnam Da Nang City Adult / older family vacation Things to do: day trips, golf, natural wonders, water sports Strong Governmental support Temperate climate all year round Excellent infrastructure International airport VinaCapital/ VinaLiving, Indochina Land, Blooming Wide variety of choice Beach, golf course, mountain and city villas, os Quality & price CB Richard Ellis Page 39
City Profile Vietnam ond Home Market y Family friendly destination Infrastructure Active Developers Buyer Options Primarily HCMC short-stay visitors Limited things to do - water activities Improved infrastructure International airport Nha Trang City Vin Group, Ninh Van Bay, Havana, TD Corporation, Hoan Cau, VinaCapital/ VinaLiving, An Vien Group Limited choice Beach and city os available Land lots CB Richard Ellis Page 40
City Profile Vietnam ond Home Market y Family friendly destination Infrastructure Active Developers Buyer Options Li it d h i Phan Thiet / Mui Ne Primarily HCMC weekend getaway Things to do: mainly water sports, some natural wonders No airport, roadways can be congested A&B, Rang Dong, Sai Gon Invest Limited choice Seaside resort investments Land lots Condos are coming CB Richard Ellis Page 41
City Profile Vietnam ond Home Market Long Hai / Vung Tau y Inexpensive weekenliday HCMC quick getaway Things to do: water activities, local dining options Infrastructure Active Developers Buyer Options Infrastructure improvement underway Lac Viet Corporation, DIC, Refico, Cotecland, Rung Duong, PVC-IC Limited choice Seaside resort investments Land lots Condos are coming CB Richard Ellis Page 42
City Profile Vietnam ond Home Market Phu Quoc Island y Island visited by HCMC crowd as family weekend getaway Things to do water activities, eco-tourism Infrastructure Active Developers Buyer Options Limited infrastructure with plans for improvement including an international airport Tropicana, Chen La, Berjaya Limited choice Seaside resort investments Land lots CB Richard Ellis Page 43
ho ome SECOND HOME Agenda CB Richard Ellis Page 44
As an Investment, buyers should consider Location/resort types Ownership: Leasehold vs. Freehold A Buyer s Guide Why buy a seconme? Cost of Purchase (payment terms, construction progress ) Costs of Ownership / Rental pool program Appreciation potential As a Vacation Property, buyers should consider Location/resort types & Purpose Price & service fees Facilities / Amenities of the Development & around the property Swimming pool, golf, gardens, shuttle service, shopping Food & beverage outlets, retail centres Leisure activities golf, yachting, biking CB Richard Ellis Page 45
Top Things for Buyers to Review Location, location, location Brand Quality Business Operation Model A Buyer s Guide Buyer's Check List CB Richard Ellis Page 46
Location - City Access/Infrastructure Tourism A Buyer s Guide Buyer's Check List - Location Other activities that support holiday lifestyle Government support through funding, initiatives, investments, infrastructure projects CB Richard Ellis Page 47
Infrastr ructure A Buyer s Guide Buyer's Check List - Location Good Governance Infrastructure Investment Linked 80 60 Infrastructure Advantage Less Valued Economic Governance Hanoi Hai Phong Hoa Binh Khanh Hoa Quang Nam Infrastructure Advantages Highly Valued Economic Governance BR-VT Vinh Phuc Kien Giang Da Nang Quang Ninh 40 Low Infrastructure Less Valued Economic Governance CB Richard Ellis Page 48 50 60 Weighted Provincial Competitive Index2010 Low Infrastructure Highly valued economic governance 70 Source: USAID/VNCI Policy Paper #15 2010, p. 27
Tourism Local & International ber of arriv vals (thous sand) Num A Buyer s Guide Buyer's Check List - Location Level of tourism top 10 domestic destinations & numbers of arrivals to each (annually) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 - HCMC TOP 10 DESTINATIONS IN VIETNAM (2010) Da Nang Hanoi Quang Ninh Hue Khanh Hoa Binh Thuan Can Tho Da Lat Phu Quoc International Arrivals Local Arrivals Source: Vietnamese Statistics Office CB Richard Ellis Page 49
Location - Address A Buyer s Guide Buyer's Check List - Location On the beach, near the sea, in the city, in the mountains Location can determine long term capital value Limited locations choice vs. availability Early buyers will get the best locations Good developments are often unique CB Richard Ellis Page 50
Brands a way to categorize A Buyer s Guide Buyer's Check List - Branding Can apply to property developers, managers, and operators Helps to quickly and easily identify a property/service Sets levels for quality & standards International/national visibility & product knowledge Enhances value CB Richard Ellis Page 51
A Buyer s Guide Buyer's Check List - Quality Options Market skips straight to quality Traditional build-up period skipped in Vietnam E.g. beach side bungalows/huts Quality developers are active in several seconme markets offering peace of mind for absentee owners Quality of developments planning, amenities, fixtures/fittings on par with city homes (or beyond due to number of quality options!) Quality assurance further supported with branded owners/operators/managers who up-hold set international standards CB Richard Ellis Page 52
A Buyer s Guide Buyer's Check List - Business Operation Model What happens when you aren t there? Who manages the property? p Is there a rental pool program? What is expected ROI? CB Richard Ellis Page 53
ho ome SECONDHOME Agenda CB Richard Ellis Page 54
Vacation Rental Pool RENTAL POOL PROGRAM A Business Operation Model Renting vacation property (on a nightly or weekly basis) could provide additional income. For renters, the savings can be significant compared to hotels or vacation packages. For owners, it can be as rewarding as paying the mortgage g CB Richard Ellis Page 55 The Nam Hai Six Senses Sai Gon
Key Concepts Rental Pool Program Key Concepts An arrangement in which owners in a large community agree to make their units available for rental by a common leasing agent or property manager. All share in the overall Revenues/Expenses according to a predetermined formula. The Complete Real Estate Encyclopedia, 2007 CB Richard Ellis Page 56
Rental Pool Program Homeowners - Benefit Property ownership remains with the owner. Can expect value appreciation over time Particularly suitable with Vietnam s context Owners can use their properties for free for a predetermined period of time every year (1-3 months) Owners can get a share of profits from renting their properties when they are not present Property is well maintained all year round Others Are prioritized in booking holiday Get discount when using services & facilities CB Richard Ellis Page 57
Rental Pool Program Homeowners - Time of Using Free Usage: Owners can use their properties for free for a predetermined period of time every year The Nam Hai: 35 days/year Hyatt Regency Da Nang: 90 days/year Vinpearl Da Nang: 90 days/year Unused days Owners can choose to carry forwards to the next year or put their units into the rental pool for extra income Over usage (market practice) Low season: rate for homeowners can be 15% of current rental rate High season: rate can go up to 50% of current rental rate Booking 30 days prior to the day of occupation In case the units are unavailable, homeowners could be offered another alternate at 30% discount from current rental rate CB Richard Ellis Page 58
Rental Pool Program Sharing Rental Profits - Two Methods Actual Profit Sharing Operator/Resort owner rents out the units (villas/bungalows/os) as part of the resort pool Homeowners get a predetermined share of profits based actual annual net income Hyatt Regency Da Nang, Vinpearl Da Nang: owners get 50% of net income Furama Villas: 60% of net income for owners Fixed Income Homeowners get fixed income annually based on property s price Furama Villas: US$10,000 000 (in value) = 1 point US$200 annual income Annual income can be low but stress-free and stable. Homeowners do not have to pay any other expenses CB Richard Ellis Page 59
ho ome SECOND HOME Agenda CB Richard Ellis Page 60
CASE STUDIES Thailand - Karma Samui Beach Resort 5-star luxury beach resort 36 residential pool villas Pricing: 2-6 bedrooms 216 sm-385 sm US$956,000-US$975,000 US$975,000 Property values in surrounding area of resort expected to grow 10-20% per annum over next 5-10 years. 3x30 year leasehold ROI options (Rental Pool) Percentage share of quarterly income 28 days complimentary use annually Guaranteed ROI 5% of net capital value per annum CB Richard Ellis Page 61 Source: Karmasamui.com
Case Studies Thailand - Azaya Villas Mountain Resort 3 hectare 5-star mountain resort 12 luxury villas Pricing 2-5 Bedrooms 185 sm-465 sm GFA Land 1,089-1,868 sm US$700,000-$1,250,000 Rental income is expected to yield double digit annual returns on investment as well as capital appreciation. 3x30 year leasehold Rental Pool Management fee: 30% of rental income CB Richard Ellis Page 62 Source: Azayavillas.com
Case Studies Bali, Indonesia - Sea Sentosa Beach Resort 5-star luxury beach resort 70 luxury residences Pricing 1 bedroom: 94-117 sm GFA 2 bedroom: 201-217 sm GFA 3 bedroom: 188-235 sm GFA 1 bedroom - US$450,000 2 bedroom - US$900,000 3 bedroom - US$2,000,000 Surrounding area has experienced a 300% increase in land value over last 5 years. 2x2525 year leasehold ld Rental Pool Management fee of 30% net revenue CB Richard Ellis Page 63 Source: SeaSentosa.com
Case Studies Bali, Indonesia - Rich Villas Mountain Resort 17 luxury villas Pi Pricingi 1 bedroom - 150 sm 2 bedroom - 200 sm 1 bedroom - US$389,999 2 bedroom - US$489,999 25 year leasehold Guaranteed ROI for 20-25 years Projected ROI of up to 11.5% Guaranteed buy-back and capital gains CB Richard Ellis Page 64 Source: BaliPlatinum.com
Case Studies Bali, Indonesia - Bali Rich Villas Resort (cont.) ROI Packages Package 1: Fixed ROI, Fixed buy-back, and fixed capital gain ROI: 7% net annually Buy-back by developer/operator on year 11 at 10% capital gain 21 days free accommodation annually Package 2: Fixed ROI Investment lock in period: 2 years Year 1-3: 8% net annually Year 4-6: 10% net annually Year 7 onwards: 11.5% net annually 21 days free accommodation annually CB Richard Ellis Page 65
About Archi Group Case Studies Vietnam Archi Group An active villa and resort developer in Hanoi since 2007 Projects located within 1 hour from city centre CB Richard Ellis Page 66
Project Classification Luxury villas & resort First class/superior High standard/first home vision Case Studies Vietnam Archi Group Tan Vien Villas & Resort Lam Son Resort Vien Nam Resort 9-ivory Resort & Country Club Green Villas Country House Villas CB Richard Ellis Page 67
Case Studies Vietnam Archi Group / Project Types Type 1 - Luxury Villas & Resort Unit Price: US$300,000 - US$500,000 Villa Land Lot: 1,000 sm - 5,000 sm 5-star luxury services: spa, swimming pool, golf, tennis Ex: Lam Son Resort, Vien Nam Villas & Resort (Hoa Binh), 9-Ivory Eco- resort, Tan Vien Villas & Resort Vien Nam Resort Villas 9 Ivory Eco-resort Services Area CB Richard Ellis Page 68
Case Studies Vietnam Archi Group / Project Types Type 2 - First Class Villas & Resort Unit Price: US$150,000 - US$300,000 Villa Land Lot: 1,000 sm 4-star services: spa, swimming pool, mini-golf, tennis Ex: Green Villas, Family Villas (Ba Vi, Hanoi) Green Villas Villa Interior CB Richard Ellis Page 69
Case Studies Vietnam Archi Group / Project Types Type 3 - High Standard/ First Home Vision Unit Price: US$80,000-$120,000 Villa Land Lot: 500 sm 3-4-star services: spa, swimming pool, fishing, bus to city centre Ex: Country house 1,2,3 First home vision 10 minutes to Hoa Lac Hi-Tech Park, 30 minutes to the new CBD and NUAs along Thang Long Boulevard Target young people with high income and modern life style CB Richard Ellis Page 70 Country House Villas
Case Studies Vietnam Archi Group / Investment Investment Consideration For buyers during initial/internal launch: 20-30% discount from the quoted price. 60%-70% price appreciation in the first year of purchase Commitment from Developer: to sell/resell units sold to customers at higher h price quoted price escalation over time Participate in Archi Group business program Archi Group sells villas for the villa owner Archi Group s Rental Pool Program CB Richard Ellis Page 71
Case Studies Vietnam Archi Group / Rental Pool Rental Pool Program 5 year agreement 60/40 profit sharing between property owners/developers No limit for villas holiday of owners (3 months priority booking) Discount for services Archi Group responsible for marketing & property s maintenance Villas Owner Benefit 60% profit of rental pool program for villa owners Exchange holidays in all resort projects of Archi Group (Hoa Binh, Ba Vi, Phu Quoc) Discount of Archi Group resort service fees: 15% for F&B, 20% for spa Convert to holiday & weekend voucher for friends and family Participate in Archi Group investment program for villa owner CB Richard Ellis Page 72
Case Studies Vietnam Archi Group / Rental Pool Tan Vien Villas & Resort Sample P/L (*) DESCRIPTION AMOUNT pa(us$) p.a UNIT TYPE Gross Revenue 20,000 Credit Card Commissions -80 0.4% of Gross Revenue Travel Agency Commission -360 1.8% of Gross Revenue Total Rental Income 19,560 Expenses Cost of Goods Sold -3,912 20% of Rental Income Rental Program Administration Fee -978 5% of Rental Income Net Rental Income 14,670 Rental Program Fee -5,868 40% of Net Rental Income Purchaser Net Income 8,802 Other Purchaser Expenses Reserve for big maintenance villas -440 3% of Net Rental Income Utilities -734 5% of Net Rental Income Management & small maintenance Fee -2,250 US$0.75/sm/month Maintenance Fee for pubblic area -750 US$0.25/sm/month Purchaser's Net Income 4,628 3 Bedroom 250 sm Villas (*) Notes: Figures are for illustration only and are not indicative of the return that will be generated by participating in the Rental Program at Tan Vien Villas & Resort CB Richard Ellis Page 73
Case Studies Ninh Van Bay Six Senses Private Residences Saigon Location In the Dong Nai River Beautiful u landscape, eco-friendly e dy environment e CB Richard Ellis Page 74
Case Studies Ninh Van Bay Six Senses Private Residences Saigon Resort Operator - Six Senses Resort & Spa Group A leading resort and spa brand in the world, managing luxury resorts in Maldives, Thailand, Vietnam, Oman, Jordan, and Spain E.g: Six Senses Ninh Van Bay in Nha Trang, Vietnam won 15 international & national prizes having the annual revenue more than US$7 million CB Richard Ellis Page 75
Case Studies Ninh Van Bay Six Senses Private Residences Saigon Specific design & High-end quality Villa complex design: incorporates the classic Six Senses focus on all natural and environmentally responsible materials. Furnishings are classically simple synonymous with intelligent luxury and some emphasis of regionally inspired features. Furniture & fixtures included the latest energy-saving and environmentally responsible equipment all creature comforts: latest entertainment & audio systems, ipod universal docking stations, ti flat-panel ltelevision i and diddt telephones with ithwifi Facilities & Amenities Personal gyms, libraries, private wine cellars and spa facilities CB Richard Ellis Page 76
Case Studies Ninh Van Bay Six Senses Private Residences Saigon Villa Types Type Land Area (sm) Price Services Latitude Villa Pool Villa -1 BR Pool Villa Suite - 2 BR Reserve Villa - 4 BR Land Area: 406 sm Built Area: 243.1 sm Land Area: 650 sm Built Area: 352.5 sm Land Area: 1,400 sm Built Area: 534.8 sm Pool: 248.5 sm Land Area: 3,000 sm Built Area: 1,007 sm Pool: 365 sm US$500,000 US$1 million US$1.5 million > US$3 million 5-star++ services, swimming, golf, tennis, world s most creative experiences for kids, spa CB Richard Ellis Page 77
Case Studies Ninh Van Bay Six Senses Private Residences Saigon Business Operating Model Homeowners can choose 3 options Rental pool for 365 days/year Rental pool excluding 30 days per year Projected owner s income: 80% of net profit after tax p.a Owners can use their properties for 30 days per year Not join in rental pool CB Richard Ellis Page 78
Thank you for attending! Contact Details Ngo Thi Huong Giang (Ms) Nguyen Thanh Vu (Mr.) Tran Hoang Nam (Mr.) Reseach Manager Vice Director (Sale & Marketing) Head of Investment CB Richard Ellis (Vietnam) Ninh Van Bay Holiday Club Archi Invest M: 0903 210 679 M: 0908 337 137 M: 0904 980 989 E: giang.ngo@cbre.com E: vunt@ninhvanbay.vn E: namth@archi.vn 2011 CB Richard Ellis, We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other itions, prior sale, lease or financing or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. You and your tax and legal advisors should uct your own investigation of the property and transaction. CB Richard Ellis Page 79