| Foreign investors still aggressive in Vietnam's realty market |
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(Listed Jul 1, 2008) |
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 It is widely seen that the local real estate market is dampened at this time, prompting local developers to shy away from new projects and refrain from launching new products. However, foreign investors are still active and aggressive in this sector, looking for new investment opportunities and introducing new products onto the local market.
New housing products are still coming out, targeting high-income people although this segment is seen like a bubble getting flattened these days.
New apartments launched
Daewon-Hoan Cau Housing Development JVC. just announces that it will next month start selling luxury apartments and introduce model houses of the US$30-million Cantavil Hoan Cau housing project to be built in HCMC's Binh Thanh District.
Chun Eung Sik, acting general director of the company, says in a talk with the Daily that there will be 203 luxury apartments,each covering l20-153 square meters, for sale and all will be completed in the third quarter next year. The price of apartments will be at least US$3,200 per square meter.
The Cantavil Hoan Cau project will be an 18-story apartment building and other auxiliary facilities on a 3,560 square-meter site at 600A Dien Bien Phu Street in Binh Thanh District. The company has completed 10 floors and two basements for the project, and although sales have yet to begin, as many as 51 customers have put their names down to buy the apartments.
Meanwhile, Kien A Investment and Services company (Inveskia), a joint venture between SouthKorea's Vina Development holding a 75% stake and Vietnam's Kien A Joint Stock Co. and Investment and Services Co., will develop four 23-28 storey blocks and 700 apartments in An Phu Ward in the city's District 2.
The project, covering 2.3 hectares and being constructed by South Korea's Byucksan Engineering & Construction Company, will be finished in October 2010. The price will start from around US$l,700-2,400 per square meter, which will be announced in June.
Ki Woo Seok, deputy director of Inveskia, says the company has held talks with banks in South Korea and Vietnam to offer loans to home buyers. "We are targeting Vietnamese people, South Koreans working in Vietnam, Viet Kieu and other foreigners who want to enjoy Korean-designed apartments," says Seok.
"Vietnam's economy has faced turbulence and everybody has experienced difficulties, but it will recover by the end of this year and the beginning of next year," he comments.
The fact that the National Assembly has recently allowed foreigners to own houses in Vietnam has also lifted the mood of developers, especially those targeting high-income people wanting to buy deluxe homes.
Dubai-based Kingdom Hotels Investments (KHI) has just announced to offer high-class Raffles Residences apartments for up to US$1 million per unit in the central coast city of Danang next month. The Raffles Residences is part of the Raffles Danang Resort and Residences project costing US$65 million, covering 15 hectares in Non Nuoc Beach, and having a total of 138 units in three buildings.
Jeff Tisdall, vice president for real estate of KHI, says that the three residential buildings offer apartments of different sizes with prices ranging from US$285,000 to US$1 million a unit. Each apartment is designed to create the residential charm, refined elegance and cultured luxury reflective of local architecture and heritage, according to the company.
"Vietnam's leisure, business tourism and investment opportunities are in a phase of enormous growth, with the Vietnam National Administration of Tourism reporting a 15.7% increase in international arrivals in the first quarter alone," the company says.
New opportunities sought
Besides introducing new apartment projects, many foreign investors have recently come Vietnam to sound out opportunities to invest in the real estate sector.
A delegation of the International Real Estate Federation (FIABCI) from Malaysia has recently made a trip to HCMC for the purpose. Some 15 members of FIABCI, which are property, designing and architecture firms have expressed keen interest in the real estate sector in HCMC, saying they want to get involved in residential area, retail stores, office building, and housing projects here.
Some members of the delegation also are investing in Vietnam like Berjaya or SP Setia say they want to look for other projects although the real estate market is coming down.
They explain that the fall of the real estate market only happens in the short term, but in the long term the sector will be very potential in Vietnam.
Setia SP Setia Berhad is joining forces with Vietnam's Becamex IDC Corp. to develop an urban town in the southern province of Binh Duong on 226 hectares in the center of the 3,600-ha My Phuoc Industrial Park, named EcoLakes town. The company has also signed an agreement with Saigon Hi-tech Park (SHTP) in the city to develop a residential area here.
"We continue looking for other projects in HCMC and Hanoi to develop," says Khor Chap Jen, executive director of Setia SP Setia Berhad.
Meanwhile, Berjaya Land Berhad has also invested in some property projects in HCMC and Dong Nai Province with investment capital amounting to billions of U.S. dollars. The company has also been asking the city's government for permission to invest some US$3.5 billion in a project to develop a 900-hectare Vietnam International University Township in Cu Chi District.
On the same upbeat mood, Thailand's largest conglomerate Charoen Pokphand Group, or CP Group, also says it will invest billions of dollars in Vietnam in the coming years, this time expanding into the property and agriculture sectors.
CP.Group chairman and CEO Dhanin Chearavanont told HCMC Le Hoang Quan in a meeting at the City Hall last month that the new investment would be poured into new sectors including urban development besides its traditional sectors of animal breeding and food processing.
Chearavanont said CP Group wanted to develop a US$l-billion complex in the city "which will bt more advanced than what we have ever built successfully in Shanghai.' C.P.Group has built in Shanghai "a new city" which included many hi class hotels, restaurants, supermarkets, office and apartment buildings.
Foreign funds also see the real estate sector a highly potential one. Protego Real Estate Investors LLP for example, has plans to set up ; US$500-million fund to invest in Vietnamese residential properties very soon, which will be the UK-based asset manager's second venture in Asia.
Equity investment of US$200 mil lion is being sought and the fund will focus on luxury apartments in popular urban locations, estates in suburban and coastal locations an boutique-branded resorts and villas, London-based Protego said in statement on its website. The Protego Qudos Vietnam Property Fund will start by acquiring five projects, mostly apartment buildings in downtown HCMC.
Figures of foreign direct investment (FDI) in Vietnam also proves the tendency of increasing FDI in th country's real estate sector. In the first quarter, FDI in real estate project reached US$4.6 billion, or nearly 90% of total foreign direct investment (FDI) in the period of US$5.4 billion and it was nearly equal to FDI in real estate projects for all of last year (about US$5 billion).
Source: Saigon Times |
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