Phu Quoc Island looks forward to the sunrise of a “special economic zone”
A thriving market
Among nearly 200 guests who were invited to the Opening Ceremony of the five-star Novotel Phu Quoc Resort, there were so many potential customers who covered transportation expenses on their own to take flights from Hanoi, Ho Chi Minh city and other cities to Phu Quoc in order to see and evaluate the projects themselves before making investment decision.
The sales speed at Sonasea Villas & Resort project is quite impressive. 200 shophouse lots of Phase 1, ranging from 120 – 200 m2 each have been sold up. Until the opening ceremony of Novotel Villas in the middle of April, 30/96 villas have been reserved for purchase by customers. Sales staff of a real estate floor here said that most of shophouse buyers came from Hanoi and Ho Chi Minh city. In particular, some customers even bought up to 10 lots and upgraded the shophouses into mini hotels with restaurants on the 1st floor.
Other customers bought at least 3 lots. At the initial phase in 2016, the unit price of each land lot was about VND10 mil/m2. At present, secondary investors have to pay VND 17-18 mil/m2.
With the total expenses (including land fee and construction cost) of VND6.5 mil/m2, each shophouse is valued VND5-6 billion, which matchs with investment capacity of many investors. For villas at higher level, the price of each villa is at least VND 14 billion. However, many investors participating the Ceremony said that this price was affordable to them even without bank loan.
From nearly two years ago onwards, the sales of Vingroup’s villas has been quite high. In a site visit, a customer told the reporter of Real Estate Investment that he had spend about VND 65 billion to buy two villas at the same time. A sales staff of Vingroup said all villas in Phase 1 have been sold up and many investors have shown their interest in Phase 2’s villas although these villas have not been offered to the market.
An investor looking to buy Sungroup's products said that he had two condotel apartments in Da Nang, two others in Nha Trang. This time, he seeked to invest into Phu Quoc because of the potential for further increases in real estate prices. In addition, the occupancy rate of this island is higher than other tourism centers.
His friend bought three shophouse lots of CEO Group and upgraded the upper floors into rooms for rent and lower floors into restaurants and coffee shops, etc. After deducting expenses, they earned more than VND200 million a month. Obviously, Phu Quoc resort real estate is enjoying great advantages, allowing buyers to have stable cash flow, besides the possibility of value increase when the Pearl Island’sfuture is gradually becoming brighter.
Prospect of a special economic zone
Mr. Pham Vu Hong, Chairman of Kien Giang People's Committee told the reporter of Real Estate Investment that the Scheme to build Phu Quoc special economic-administrative unit is the result of more than 8 years of direction and implementation by the Politburo, the Government, ministries, sectors and Kien Giang province. Most recently, the Politburo's Summary Notification No.21-TB /TW dated March 22, 2017 on the schemes for the establishment of special administrative-economic units was issued.
Based on that, Kien Giang province will develop a scheme on Phu Quoc special economic – administrative unit under the model of outward economic development with high openness. With limited intervention from the State, this special unit will operate on the principle of market economy with economic breakthrough mechanism and policies. The main pillars of Phu Quoc will be entertainment industry, tourism, resort, financial – banking services and marine economy.
The goal is to use special preferential and outstanding policies with high international competitiveness to build and develop Phu Quoc into a major tourism and service center of the whole country and Southeast Asia under a open economy model.
Accordingly, the governmental organizational structure of Phu Quoc special economic-administrative unit is also organized in accordance with the characteristics of Phu Quoc in the model of one-level urban administration in the direction of streamlining and efficiency, multi-sectoral and multi-disciplinary management and transforming existing communes and towns into sub-zones. Professional decentralized bodies such as military, police, courts, procuracies, customs, treasury, tax, social security, etc. will be organized in line with the new model.
According to Mr. Pham Vu Hong, Kien Giang province will set up a Provincial Steering Committee chaired by the Provincial Party Committee Secretary to direct drastically, comprehensively and effectively the formulation of the Scheme on Phu Quoc special economic – administrative unit. It aims at developing legal institutions and corridors, actively reviewing administrative procedures, building e-government, public administrative service centers and mobilizing financial resources (approximately USD 40 billion from now to 2030) …
"Together with the Ministry of Planning and Investment, Kien Giang province with the pilot model of Phu Quoc special economic zone is also focusing on studying and gathering experiences of special economic zones in the world in order to make proposals to the Government. We plan to complete the proposal by August to be submitted to the Government, so that it can be included in the draft law in October and submitted to the Standing Committee of the National Assembly and incorporated into the year-end agenda of the National Assembly. With such progress, we expect that at the next May session, the National Assembly will consider passing this bill,” Kien Giang PPC’s President shared on the progress of the new model.
If Phu Quoc becomes a special economic zone with preferential policies, real estate in this island will certainly have new look and new level.
Mr. Doan Van Binh, Chairman of CEO Group, said that compared with other tourism paradises in the region, Phu Quoc has many natural and geographical advantages.
It takes only 2 hours for flight from Phu Quoc to the capitals of ASEAN countries to approach the 700 million people market. To reach the market of 1 billion populations, it takes only 3 hours. Especially, Phu Quoc is located in the Gulf of Thailand without storms nor risk of business interruptions with low property insurance. With 150 km of coastline with many white sand stretching beaches, warm seawater, average temperature of 28 degrees Celsius and low humidity, Phu Quoc can welcome visitors all year round.
The infrastructure of the Pearl island has been heavily invested with an international airport which can receive 5 million passengers a year, an international seaport with a capacity of 7,000 passengers which is expected to be completed in 2017. The traffic system bypass and through the island has basically completed. Phu Quoc Casino is expected to go into operation from 2017, the cable car system over the sea has been put into operation from December 2016 …
If the major tourism cities such as Da Nang, Nha Trang have reached more than 15,000 rooms/per city, Phu Quoc so far has only 4,000 rooms. The presence of the largest international management brands in Phu Quoc such as Accor, Melia, Marriot, Intercontinental … promises to create attraction to international tourists and make this place become a vibrant market.
Under this new model with a series of breakthrough mechanisms, there will be a boom not only in tourism but also in other services such as finance, health, etc. in the Pearl Island. Mechanical and natural populations will increase dramatically, which is several times higher than the current figure of 100,000 people. Bali as a typical example when the population of the island is now up to 3 million people.
