Information about the auction of land for rent at Thuy Ta restaurant (Da Lat city) with a rental price of 15.1 billion VND/year is receiving attention. According to regulations, the auction winner must pay a one-time fee for a 10-year rental period with a total amount of 151.5 billion VND. Thus, the daily rental price of this land is about 41.6 million VND/day.
On real estate groups, most people say that this rental price is very high compared to the price in Da Lat in general and the whole country in particular during the economic downturn.
Sharing with Dan Tri reporter, Mr. HB - who has many years of experience in real estate investment in Da Lat - said: "In the past, when Da Lat had not been industrialized, the location of Thuy Ta restaurant could be considered the most prime location in the center".
Thuy Ta Restaurant (painted white) in the center of Da Lat city, Xuan Huong Lake area (Photo: dalat.vn).
However, according to Mr. HB, currently, Da Lat is covered by many shops and restaurants of large and small brands, so Thuy Ta does not attract as much attention as before.
Mr. HB added that he is originally from Da Lat and usually only visits this restaurant about 2 or 3 times, the first time is to "know", the second or third time is to bring friends and relatives. In addition, for daily dining needs, Thuy Ta is not the optimal choice.
Not to mention, according to Mr. HB, on normal days, moving around the restaurant area is quite convenient. On holidays, this is the place with the highest traffic density in the city, making it quite difficult to move around because of frequent traffic jams.
Regarding the rental price of 41.6 million VND/day, Mr. HB said that if the restaurant could be renovated, renovated, and additional floors built to increase the number of customers, this figure would be feasible. However, according to regulations, the auction winner must maintain the current status quo, and no additional construction is allowed, so breaking even is impossible.
According to calculations, the covered structure in the auction area has an area of 383m2, so it can accommodate about 250 guests (each guest 1.6m2). If the maximum number of guests can be accommodated, each guest needs to spend an average of about 170,000 VND on food and drink, then the revenue point will be just enough to pay for the premises, not including the cost of staff, electricity, water, and input materials.
In addition, as a long-time resident of Da Lat, Mr. HB believes that the location of Thuy Ta restaurant is only suitable for F&B business, not suitable for other fields.
Ms. Nguyen Thi Thu Trang - director of a real estate consulting company - commented that Thuy Ta restaurant has a prime location in the center of Da Lat. "In real estate, the first choice is always location and Thuy Ta has this," she said.
Hanoi tycoon wins bid to lease land for Thuy Ta restaurant with rental price of 15.1 billion VND/year (Photo: Dalat Tourist).
However, the 15.1 billion VND/year rent will make most people question.
According to Ms. Trang, if we consider the financial problem, paying 151 billion VND in advance for 10 years of rent will make the actual rent of this area higher than 151 billion VND. Because if we use that 151 billion VND to save in the bank, after 10 years, the profit will reach hundreds of billions of VND (calculated at an interest rate of about 6 to 7%/year).
Ms. Trang said that currently, real estate is at "rock bottom". Many land owners have to cut deep losses even though they are in good locations. Therefore, she questioned whether this Hanoi-born tycoon will forfeit his deposit or not? If so, how much will the next tenant pay? According to her, the answer will only be clear when the rent is fully paid into the state budget.
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