Authorities in Da Nang recently gave permission for the conversion of thousands of condotel units into residential apartments.
The permission to convert the condotels was signed by Le Quang Nam, deputy chairman of the municipal People’s Committee, on Wednesday and will affect an area of 3,988 square meters encompassing the CT1, CT2, CT3, and CT7 towers at the Da Nang Times Square project, located by My Khe Beach in Phuoc My Ward of Son Tra District.
The four affected towers were designed with 30-50 floors each, housing thousands of condotel units.
In Vietnam, such units are permitted to be built on commercial and service land as hybrid properties that combine condominiums with the option to rent out the units in much the same way as traditional hotels.
As per Wednesday’s authorization, investors will be allowed to change the land use purpose of the Da Nang Times Square project from commercial services to urban residential land used to build apartment buildings.
Ownership certificates will also be granted to the buyers of condotels at the project with a term until March 30, 2056.
The grant follows a government decree issued last month about amending and supplementing several points of the decrees guiding the implementation of the Law on Land.
Before this amendment, condotels still lacked legality and buyers of this type of hybrid property could not obtain ownership certificates.
The regulation on granting ownership certificates for condotels was expected to tackle the legal bottlenecks for enterprises and individuals investing in these properties.
The 2016-18 period witnessed the rapid development of condotels with a number of projects built across Vietnam as a new investment wave in the real estate market, including the construction of Da Nang Times Square in the eponymous city in central Vietnam.
However, this segment has fallen into stagnation in recent years because of the market downturn and the legal obstacles in granting ownership certificates.
There are about 239 tourism property projects throughout the country with a total of 114,000 condotels worth around VND297 trillion (US$12.7 billion), according to the Vietnam Real Estate Association.