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Expert Opinion: Matt Powell on Wellness Real Estate

Wellness real estate, or residential or commercial properties that incorporate intentional wellness elements into their designs, has great potential in Viet Nam. Like other countries in Southeast Asia, Viet Nam has the capacity to develop wellness tourism. This sector not only presents great investment opportunities but also could be a tool to ensure sustainable development. We sat down with Matthew Powell, Director of Savills Ha Noi, to hear his thoughts on the industry.

Real estate with health services, which range from resorts to retirement homes, is a growing segment worldwide. According to Global Wellness Institute (GWI) report released in December 2021, wellness tourism is expected to grow by 20.9% per annum between 2020 and 2050.

In Asia, Thailand is a pioneer in wellness tourism, with many brands providing therapeutic resorts, spas, and yoga retreats. Bali is also a popular wellness destination. Currently, Viet Nam is also witnessing more resort brands, such as Fusion Hotel Group, offering wellness retreats.

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Question: Within the wellness real estate market, which segment has the most potential for growth in Viet Nam?

Matthew Powell:

Viet Nam has a lot of potential to develop real estate for the elderly as the number of nuclear, rather than multi-generational, families are on the rise. Shifts in household composition are being driven by a number of factors, including urbanisation and lifestyle changes. Viet Nam also has an ageing population with an increasing life expectancy, which means increased demands for healthcare services for the elderly.

Their requirements are diverse and range from specialised facilities to 24/7 care services. Many elderly people do not need to be hospitalised, but they do need spaces with specialised care and suitable facilities and services.

Real estate for the elderly can be rental properties or homes for sale. While this market is well-established in countries like the UK or New Zealand, it is still quite new in Viet Nam. This is based on tradition as multi-generational households are common, and children are expected to look after their parents in their old age.

When looking at the opportunities in Viet Nam, one needs to remember the crucial role foreign retirees play. The appeal of retiring abroad is increasing, and many retirees are looking for destinations where they can relax and enjoy their retirement while still having access to good healthcare facilities.

Currently, Malaysia’s foreign direct investment (FDI) inflows are reaping the rewards from this segment. The country has introduced the “Malaysia Second Home” (Mm2h) programme, a special program for foreign retirees, and has introduced tax breaks for medical imports.

As Viet Nam has many Korean and Japanese expats, there are good opportunities to develop real estate for both local and international retirees. These customers will prefer destinations with golf courses or sports centres, like Da Nang or Phu Quoc.

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Question: How should investors cater to foreign guests, particularly in the wellness resort market?

Matthew Powell:

They should partner with a professional real estate manager. This will not only differentiate resort properties, but it will ensure high-quality services. Often, foreign visitors feel more confident about frequenting familiar brands, as they know that they will receive a certain level of service, quality, and comfort. When managing resort projects, these established brands invest in upholding service standards.

While it may be more expensive in the short run, reputable brands could help developers earn higher long-term profits.

Recently, many mid-to-high-end resort properties have entered the market. Well-developed, branded properties have been popular with investors. International hospitality brands are also keen on opening in Viet Nam.

As the hospitality sector is on the road to recovery and borders are now open, we are working with operators and developers to deliver the most appropriate and effective solutions for their resort properties.

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Question: How should developers approach wellness tourism and real estate for long-term success?

Matthew Powell:

For long-term success, developers should focus on sustainability. Rather than building large-scale projects, investors need to consider environmental and ESG concerns from the design stage.

Properties that do not complement the local landscape and culture will face difficulties as, ultimately, they diminish the overall experience the resort provides. To entice visitors, resort developers should take inspiration and learn from other countries that have implemented projects that take advantage of the beauty and natural benefits of the area.

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There is a gap in Viet Nam’s wellness tourism and real estate. While Viet Nam has great potential, this sector is underdeveloped and needs a clear strategic direction. As this sector will cater to high-end customers, properties need to be bespoke and offer high-quality services. To meet these demands, developers should employ reputable property management brands. To ensure sustainability and attract guests and buyers, developers also need to consider the environment and the local surroundings, steering away from large-scale projects.

 

 

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