Tall & Urban News

Once known to the public as a grand tourism real estate project, CocoBay had made a striking impression on the market at first, but soon underwent into difficulties for not having a proper construction permit for almost two years.

Coupled with the unresolved legal framework governing the “condotel” model (a building which is legally a condominium but is operated as a hotel) that CocoBay has adopted for its projects, the difficulties have continued to mount. When the project could not be carried out and no sales were generated, homebuyers became rather cautious with the condotel model. CocoBay has ended up with a severe cash flow problem.

As the talented young management team became overwhelmed with these issues, the burdens were passed on to senior personnel such as Nguyen Duc Thanh, chairman of the Empire Group—the owner of the CocoBay Da Nang project.

Thanh officially returned to operate the project in July 2018 to disentangle each of the difficulties that have come about. He is confident he can bring this project back to life.

Legal issues were possibly the biggest challenge for CocoBay. These were solved, thanks to a change in the planning of CocoBay, which modifies the original condotel model into an urban area and the high-rise buildings into residential and low-rise structures. The project has also received its use of land rights and is expecting to gain its construction permit to kick off construction.

The change in the project planning, as Thanh said, is necessary to address the issues related to the operation of such large-scale projects. As initially planned, CocoBay would have had up to 12,000 hotel rooms, but when 2,000 of these were completed and put into operation, difficulties in operation and management started to appear.

In fact, Vietnam has not had any 5,000-room resort complex put into operation at this stage, let alone a project of 12,000 rooms like CocoBay.

Reducing the construction density, with more low-rise buildings instead of high-rise buildings, was therefore the only solution.

In addition, part of the condotel project under construction was converted into apartments to avoid legal concerns over the condotel model. Due to these changes, apartment and land/house buyers at CocoBay can gain land-use rights or ownership certificates.

The project has also added other facilities into its master plan, such as a management office, schools, health clinics, community spaces, and commercial centers.

Another important change in the project is the construction timeline, which will see to the project being completed two years earlier than the original plan.

Target customers of CocoBay have also been expanded to East Asian nations like Japan, South Korea and China, instead of focusing solely on the EU and US markets as previously.

“As soon as these changes are implemented, CocoBay will be turning into a new page of life, with change in both quality and quantity. The standard of the project has also been set on a higher rank,” said Thanh.

For more on this story, go to The Leader.