Although economic slowdown has brought on stagnation in the Vietnamese property market in all segments, many property projects, especially those invested by Singaporean companies, are operating very effectively. This business sector is still very attractive to Singaporean businesses in particular and foreign-invested businesses in general.
Vietnam Business Forum has an interview with Mr Phan Thanh Mai, Secretary General of the Vietnam Real Estate Association, on market forecasts as well as opportunities for real estate cooperation between Vietnam and Singapore, one of four main topics of discussions at the Vietnam - Singapore Business Forum 2013 which takes place from April 17 to 19, 2013 in Ho Chi Minh City. Thu Ha - Anh Son report.
How do you assess Singapore's investment in Vietnam in recent years, especially in real estate sector?
In recent years, despite impacts of global economic downturn, investments of Singaporean business in particular and of foreign-led businesses in general in Vietnam are still on the rise. By the end of 2012, Singapore had 1,099 investment projects in Vietnam with a total registered capital of more than US$24.67 billion, ranking fourth among more than 98 countries and territories with investment capital in Vietnam, and ranking first in ASEAN bloc. In 2012 alone, Singapore had 89 projects worth nearly US$490 million. Particularly, real estate investment accounts for a large proportion of Singapore’s total investment in Vietnam.
On investment, Singapore is now present in most economic sectors of Vietnam, from oil and gas exploration and exploitation, industrial production to processing of agriculture, forestry and seafood. Its investment capital is mainly channelled into infrastructure, service and real estate business. Furthermore, Singaporean businesses are also involved from planning, designing and construction of housing, urban and industrial zones to management.
Operational real estate companies of Singapore in Vietnam include CapitaLand and Keppel Land. For instance, Keppel Land has invested in some projects in the country, consisting of Sedona Suites Royal Park (Hanoi), Saigon Central Building (Ho Chi Minh City), upmarket Villa Ricera and The Estella villa zones, Rach Nam complex (HCM City) and Dong Nai riverside city project.
Besides, the Vietnam - Singapore Industrial Park (VSIP) is also regarded as an ideal model of cooperation for the two countries.
How do you assess operating efficiency of those projects?
The high operating efficiency of many Singapore-invested projects has helped increase employment, export turnover and economic growth for Vietnam. Vietnam International Container Terminals Joint Venture (VICT) in Ho Chi Minh City and Vietnam - Singapore Industrial Park (VSIP) in Binh Duong province are cited as the evidences for right investments of Singaporean corporations in Vietnam. The Ministry of Planning and Investment of Vietnam, through its subordinate Foreign Investment Agency (FIA), coordinated with the Singapore Economic Development Board (EDB) to choose mutually positive projects and stepped up the approval of projects to enhance attractiveness to investors around the world.
Besides, 5-star hotel projects in Hanoi are reaping successes thanks to broad customer base, particularly foreign business executives and investors visiting Vietnam.
In addition, industrial, housing, urban infrastructure projects are also economically efficient, helping boost the two-way cooperation.
Currently, some big Singaporean corporations are cooperating with Vietnamese partners to build social housing while accelerating surveys on affordable social housing in Vietnam to take part in on the basis of mutual benefit. This trend matches the current context and complies with the Government’s Resolution 02/NQ-CP dated January 7, 2013.
The Vietnamese real estate market has not been recovered from the steep slump. How do you think this trend affects investment [in Vietnam] of Singaporean companies in particular and foreign firms in general?
In recent years, in the wake of global economic slump, the Vietnamese real estate market slid into recession. Very high inventories and bad debts undermined consumer confidence and reduced market attractiveness to foreign investors.
However, I think this is a very appropriate time to restructure enterprises and investment and domestic companies need to boost cooperation and linkage. The slowdown of real estate market in Vietnam will create long-term opportunities for investors and opportunities for Singaporean financial institutions. In the face of prolonged lacklustre market, the Vietnamese real estate market remains an attractive destination in the long term. Singaporean businesses are gradually shifting to affordable houses and houses for rent - two segments with really huge demand at present and in the future. This trend is also confirmed in the Vietnam National Housing Strategy until 2020, vision to 2030, stipulated in the Decision No. 2127/QD-TTg dated November 30, 2011.
With close cooperation tradition between the two countries, Singapore investors deeply and broadly understand Vietnamese people and thus easily make inroads in the Vietnamese market. This is the reason why many Singapore companies have, and will, invested in real estate in Vietnam.
In addition, Vietnam has appropriate opening policies in line with international business and investment practices, always respects, values and supports true investors in Vietnam because the country has all conditions to develop its business into other areas.
In the coming time, what will the Vietnam Real Estate Association do to address the current reality and promote foreign investment attraction?
To promote foreign investors in general and Singapore’s companies in particular, Vietnamese businesses need to step up investment promotion on the basis of selecting good projects and financially viable investors with technologies that Singapore is strong at and Vietnam is in need. In particular, the two sides need to promote cooperation in drawing investment capital from third countries into Vietnam.
In the coming time, the Vietnam Real Estate Association - through its Research and Investment Construction Centre - will also continue to give detailed remarks, assessments on analyses on the market to give Singaporean investors comprehensive and insightful views to outline long-term investment plans.
Besides, the association has many members in all provinces and cities in Vietnam. The members will provide useful information about market situations, preferential policies and other aspects of concerns to investors. Particularly, not only assisting Singapore’s companies to invest in Vietnam but the association also supports and promotes Vietnamese enterprises to make investment in Singapore.
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