Resort property developers remain mired in red ink

Data from the Hanoi Stock Exchange shows that Hung Thinh Quy Nhon reported VND199.4 billion (US$8.1 million) in post-tax losses in the first half, 5.8 times up the same period last year and higher than the VND152 billion it lost in the whole of 2023.

It developed Merryland Quy Nhon, a commercial tourism resort city in the central Binh Dinh Province.

Song Tien, the developer of the Angel Island tourism urban area in the southern Dong Nai Province, reported losses of over VND62 billion, nearly triple from a year ago.

Tonkin Land, which developed the Le Méridien Da Nang resort complex, incurred an VND8-billion loss. It has been reporting losses ever since it started disclosing results in 2021.

Van Huong Investment and Tourism, the developer of the Dragon Ocean Do Son international tourism area in Hai Phong City, and Sunbay Ninh Thuan, which developed the SunBay Park Hotel & Resort in Ninh Thuan Province, reported losses of VND34 billion and VND14 billion.

Even companies that have diversified portfolios but mainly focus on resort properties, like BIM Land and Crystal Bay, are struggling with losses.

The resort real estate segment remains sluggish despite a surge in tourism. Vietnam received 8.8 million foreign visitors in the first half of this year, up 58% year-on-year and 4% from pre-Covid levels.

A report published by real estate services provider DKRA in July said many new projects in the resort property segment have had to postpone their launches due to legal issues.

The Vietnam Association of Real Estate Brokers reported there were around 1,800 successful transactions in the segment in the first half, an increase from a year ago but only 20% of the figure in the same period in 2022.

Primary market prices remained steady but they declined by 15-20% from a year ago on the secondary market, it said.

Some properties were listed at 40-50% discounts but still had a hard time finding buyers, it added.