Thanks to the Vietnamese state owned bank, AgriBank which has tightened up on it’s lending policy to calm down the overheating property sector, investors have turned their attention to a new sector to Vietnam – the Timeshare industry.

Mention must also be given to the brave resort owners, and developers who have grasped this new opportunity. There are numerous, in fact at least 50 resorts, or villa developments, that can be be purchased via the shared system.

Casablanca Villas from Vinalinks Land

Vinalinks Land, one of the first to the timeshare sector, began construction of Casablanca Villas in March in Dai Lai, in the northern province of Vinh Phuc, 48km west of Ha Noi city centre.

Nguyen Tuan Anh, Vinalinks Land’s chief executive officer has remarked “We want to provide customers with a reasonable and effective investment. A US$3,000-membership card will allow an investor to hold the right to use a villa or a room in the resort for one week annually for 25 years. That of course is much cheaper than buying an entire villa or apartment.”

The 8.6 ha resort has 60 villas, and is expected to be completed in 2014, was the first timeshare in the north of Viet Nam. The eco-resort is attractive to investors because of its flexibility and the relatively low outlay required. A number of membership cards were issued soon after the project was announced to active buyers.

“You can spend VND7 billion ($300,000) to get an ownership of a timeshare villa. Investors can authorise Vinalinks Land to lease the villa or part of the property for a net profit of between $12,000 and $31,000 each year,” said Phuong Thao, from Vinalinks Land’s marketing staff.

She added that the company was also a member of Resort Condominium International-RCI, which helps provide 4,500 options for customers wishing to swap holiday destinations with other timeshare holders around the world.

Hoang Van Quyet, is another ambitious developer which is investing in resorts in suburban Lang-Hoa Lac. It predicts that demand for resort villas and apartments would grow significantly over the next 20 or 30 years as infrastructure improved.

“There will be more well-off city-dwellers relocating to quieter, healthier and bigger places. They are able to buy a villa or a house for between VND1.5-2 billion ($75,000-$100,000) in a resort, but they still hesitate because of poor transportation and infrastructure facilities,” Quyet said.

“Resort projects are profitable investments as investors can get back their initial capital as soon as they finish the project. However, infrastructure plays an important part,” he added.

Another developer which has recently made public it’s plans is SaigonLand which is to offer villas at its 36-property Emerald resort for $1 million each at the end of this year. The company has also launched a 84-ha resort project in Nhon Trach in southern Dong Nai Province.

CB Richard Ellis Vietnam (CBRE) has teamed up with Resort Condominium International (RCI) to introduce the timeshare concept in ‘second home’ market to local property developers.

Adrian Lee, managing director of RCI Asia, said in a statement “that the potential for the vacation home ownership market in Vietnam was promising as the company’s research shows a surprisingly high number of families with income eligible for resort timeshares in the country”.

“We are committing good resources in the Vietnam market as we see large growth in the future of this country,” Lee added.

Commenting on the business model, Mauro Gasparotti, CBRE’s senior manager of hospitality consultancy, said “Developers were looking at alternative solutions to shorten return periods, sourcing different capital contributions or simply reducing investment risks”.

He also states that “Structural ownership required developers and owners to understand the basic principles, costs and risks. The timeshare legal structure is under development in Vietnam”.

According to RCI, there are some three million members and 4,000 resorts around the world joining the system. Among Asian countries, Japan, Malaysia, Korea and India are on the top list applying the vacation ownership.

Gavin Cheong, director business development for RCI Asia, said “The use of timesharing structures was relatively well understood and accepted in other counties. However, it is new in Vietnam, thus the company is spending more time in educating and guiding developers in the country”.