Cocobay Đà Nẵng Seeks to Restart Project after Profit Commitment Failure

Cocobay Đà Nẵng, a high-end resort and housing project, recently announced the unilateral termination of contracts with its customers. The company, Thành Đô, the investor and developer of The Empire, also known as Cocobay Đà Nẵng, is currently in the process of restructuring and preparing resources to restart the project in the second quarter of 2024. The extension of sales contracts with customers during the past period was an undesirable outcome.

Restarting the Project

Thành Đô, in its announcement, stated that it wants to restart the Cocobay Đà Nẵng project in the second quarter of 2024 after years of stagnation. As a result, the company has unilaterally terminated the sales contracts, effective from the date of the announcement. Customers will be required to hand over all relevant legal documents and assets received within 15 days of receiving the notice. They will also need to cooperate with the company in order to liquidate the sales contracts.

Government’s Role

During a press conference on March 20th, Le Van Tuan, Deputy Director of the Department of Construction in Đà Nẵng, stated that the department has not yet received any notification from Thành Đô regarding the termination of contracts with customers. However, he emphasized that this is a civil dispute between the investor and the customers. The department will become involved if there are any issues related to the government’s role in managing the project.

Project Details

Cocobay Đà Nẵng is comprised of two zones: Zone 1, covering an area of 300,797 square meters, and Zone 2, covering an area of 212,529 square meters. Both zones have been approved for detailed planning by the Đà Nẵng People’s Committee. The project has been partially completed and put into use.

Regarding Zone 1, on February 1st, 2019, the Đà Nẵng People’s Committee approved an adjustment to the detailed planning. This adjustment included the conversion of 50% of the ongoing construction of apartment hotels in clusters HH2, HH3, and HH5 into apartment buildings. The remaining high-rise apartment hotel projects in clusters HH4, HH6, HH7 would be converted into apartment buildings, villas, semi-detached villas, and townhouses. Additionally, the height of the HH1 high-rise project was reduced from 50 floors to 40 floors, with 50% of the area being converted into apartment buildings.

In 2022, the investor requested further adjustments to blocks HH2 and HH3, turning one block into apartment buildings and the other into apartment hotels (condotels). However, the Department of Construction has guided the investor through the necessary procedures, which have not been implemented to date.

Background of the Project

Cocobay Đà Nẵng, developed by Thành Đô (Empire Group), commenced construction in June 2016 along the Trường Sa coastal road, Hòa Hải Ward, Ngũ Hành Sơn District, Đà Nẵng City. In 2017, after partial completion, including the construction of condotels and various recreational and resort facilities, the project was put into operation.

As part of the project, Thành Đô promised to provide a return on investment of up to 12% per year for condotel buyers over an 8-year period. However, on January 1st, 2020, Thành Đô unexpectedly announced the suspension of income commitments to customers. Since then, the project has been at a standstill.

At the time, the investor stated that the legal framework for condotels had not been clearly defined by the relevant authorities, and the business operation of this type of real estate still faced many challenges. As a result, the project encountered numerous difficulties, and the investor took responsibility for its inability to fulfill the profit commitments made to customers.

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