VietNamNet Bridge – More and more investors are pouring money into the education sector because of its low risks and high profitability.
The movement of opening foreign-language centers and international schools has settled down after a hot development period. Instead, building schools and kindergartens in high-end residential quarters or new urban areas, where the demand is high and parents can afford high tuition, has become the preferred choice of more investors.
“You will never lose your money if you invest in the education sector,” said Dinh Hong Hai, chair of Tan Hoang Thang Company, the investor of Ruby School in the Rubyland urban area in Tan Phu district, HCM City. “The question is when you begin to make a profit”.
As for Ruby School, Hai initially thought it would take him eight to 10 years to recover the investment capital. However, things have been going more smoothly than he expected.
According to Nguyen Thi Thuy, deputy headmaster of Ruby School, the school needs to enroll at least 200 students for 10 classes at the primary education level to be able to make a profit. To date, it has received 110 students.
“We hope to begin making a profit from the sixth year of operation, or four years ahead of the schedule,” he said.
Pascal School in Co Nhue new urban area in Tu Liem district in Hanoi has broken even after five years of operation.
Hoang Thi Trong, headmaster of Pascal, said the school now can fulfill its plan to enroll 60 students for every grade. Though the school still cannot make a profit, investors have injected more money to upgrade facilities to attract more students.
“I think Pascal will begin making a profit in two or three years,” Trong said.
Analysts noted that investors in the education sector are all financially powerful, and strive to create a high-quality and high-cost education model.
Hai said that the parents in high-end residential quarters and new urban areas, the high income earners, tend to set high requirements on high quality education. Therefore, schools with low quality and poor infrastructure will not be able to exist, even though they charge lower tuition.
“We would rather accept losses for many years and strive for a sustainable development, than to try to make profits as soon as possible under the ‘hit and run’ business model,” Hai added.
Vingroup has made a heavy investment in Vinschool in Times City. The school includes well-equipped classrooms and functional rooms on a large area of two hectares. There are also modern entertainment and sports complexes which can best serve the students at different education levels.
Regarding education quality, the investor said all the students of the school will be prepared in a way to pass the entrance exams to domestic universities and obtain scholarships from foreign schools.
A representative of SSG, a real estate group, has revealed that, encouraged by the success of Wellspring Hanoi, SSG plans to expand the Wellspring Saigon bilingual school system at Saigon Pearl Complex.
It is expected that SSG would have a total of four schools in Hanoi and HCM City by 2020, which would enroll some 10,000 students.
DNSG