Golf course real estate setting trends
Golf course real estate setting trends
The openness in policies, the explosion in the number of golfers, and the trend of resorting and enjoying high-class services have created an impetus for golf real estate to develop rapidly and become an investment channel for the market.
Appearing in the 15th century in Scotland, golf quickly developed throughout Europe and North America before reaching Asia – the fastest-growing market today.
In Vietnam, the first golf course built was the Dalat Palace Golf Course in 1990. From 2010 onwards, golf entered its golden age in Vietnam. Dozens of courses were built, the number of players spiked to tens of thousands, golf tourism was promoted heavily, and production and distribution activities of related products were born.
According to statistics from the Vietnam Golf Association (VGA), there are around 80 golf courses in operation across the country. It is expected that the number will reach 200 by 2025. The localities with the strongest golf development are Hanoi, Hoa Binh, Bac Giang, Quang Ninh, Danang, Vung Tau, Dong Nai, and Binh Duong. Participating in this game are big names such as Geleximco, Vingroup, BRG, FLC, Sun Group, and Sovico Holdings, as well as overseas names such as Asian Coast Development and Tanzanite International.
In 2019, Vietnam welcomed around 1.5 million international golfers, bringing revenues of VND4.5 trillion ($195 million), according to the Vietnam Golf Tourism Association.
ATTRACTING BUYERS
The boom of golf has promoted the related real estate segment. Golf course projects with integrated real estate and services were born and quickly created an investment fever.
Three groups of customers who have a high demand for this type of real estate include investors who have a hobby of collecting special, rare properties, golf enthusiasts, and investors who are looking for green living space but full of facilities and services.
There are many factors that make up the special attraction of golf course real estate. Among those are a unique location, limited products, the ability to rent with high yield thanks to a focus on high-class customers, and the great potential for increasing the asset’s value.
Statistics from the VGA show that among the 80 golf courses in operation across the country, 32 courses meet regional and international standards and half of that can be combined with residences.
Nguyen Van Dinh, chairman of the Vietnam Association of Realtors said, “The golf courses available with residences are now offering hundreds of products, a very limited number compared to demand.”
Dinh added that golf course real estate, typically golf villas, is a high-class product, aiming to serve a certain customer base with extremely high benefits for the project owners. “Golf villas will be the segment that investors aim for. I believe that investing in those products creates long-term and sustainable benefits because its value will increase for sure,” Dinh said.
According to real estate company DKRS, worldwide golf courses are considered "diamond businesses" because the average selling price of this product is always higher than other high-end products in many countries. For example, in the US, a golf course project has a selling price about 10 per cent higher than other products.
Meanwhile, the selling price of a golf course villa in the UK can be double the price of an ordinary one in the same area. Villas and apartments next to golf courses in the world often cost millions of dollars.
In Vietnam, according to a survey by DKRS, golf resort projects have a selling 19 per cent higher than other high-end resort products, and from 20-35 per cent in projects located near big cities.
“That means the investment ratio in Vietnam is at an attractive level. The value and exploitation of golf villas will be very good and people who invest in this product are investing for the future," said DKRS.
CLASSY HUNTERS
Many investors choose to buy golf course villas as a second home so that they can both relax every weekend with family and friends, and can make a profit by renting while real estate value increases steadily every year from 10-25 per cent depending on each project and location.
Nguyen Le Hai Dang, an independent real estate strategist, said that majority of golf real estate hunters were the ones who have a hobby of collecting special and limited properties and golfers.
“A large number of businesspeople are playing golf for health improvement and for connecting their business network. In addition to that, investors look for green and fresh living spaces,” Dang said.
He added that real estate projects combined with golf courses must be classy and fully equipped to serve the needs of investors as well as their partners. In addition, the project must be convenient for traffic and well connected to economic business areas.
The strong increase of the rich class in Vietnam makes the demand for real estate associated with golf courses even greater.
According to Knight Frank’s latest Wealth Report released in March, the number of ultra-high-net-worth individuals in Vietnam is set to grow by 26 per cent between now and 2026. The growth in Vietnam is mirrored by the dynamic Asia-Pacific region, which trails only North America in the growth of this demographic.
“We have witnessed prime apartment sales break the $10,000 barrier this year driven by local demand, and with that 26 per cent on par with Hong Kong and Taiwan, we can see the potential for ongoing growth well into the future beyond that,” said Alex Crane, managing director for Knight Frank Vietnam. "Vietnam will be represented prominently in this report in the next few years as economic fundamentals and Vietnam’s position on the world stage continue to accelerate."
Hoang Duc Viet, sales director of Tran Anh Group, shared that compared with other countries around the region, the number of players and golf courses in Vietnam is still very modest, with nations like Thailand boasting many hundreds of golf courses and millions of players.
“Therefore, the potential of golf courses combined with real estate will be an investment trend that many people are interested in, especially for projects located not too far from Hanoi, Ho Chi Minh City, Danang, and Dalat,” Viet said.
