According to foreign investors, this is the best chance to invest in real estate market of Vietnam at present. The term “frozen market” is not appropriate because demands for housing and other real estate are huge.
While most of enterprisers in real estate have had a gloomy outlook recently in the context of a “frozen real estate market”, the Managing Director of the real estate services company CB Richard Ellis (CBRE) has an optimistic view: “the Vietnamese real estate market is very optimistic”
The trend to invest in building is increasing. Offices and high - grade flats for rent remain on the top list of both price and demand wanted. This is attractings several foreign investors to put their money in hundred million - dollar projects.
According to investment statistics of CBRE, the number of multinational corporations and companies coming to Vietnam will increase. Accompanied with them are a lot of foreign experts, the tendency to improve offices and headquarters of domestic and foreign companies, especially banks and insurance companies. Almost all other investors share this view.
The concept of “frozen” is unrealistic because the demand of housing and other real estate remains large. An investor of a project in Thu Duc District of Ho Chi Minh City said: “Look at the purchasing power of flats of Phu My Hung, apartments in The Manor building on Nguyen Huu Canh Street or in Catadivi in District 2 we will know how great the demands are”
According to foreign investors, an important reason for this is the better investment environment. Instead of forming joint - venture companies; investors can directly invest in 100 per cent foreign capital projects in real estate. Foreign investors also can invest in building houses for sale due to the Land Law of 2003.
Sharing CBRE’s view, Mr. Tran Anh Vu, Head of Investment Department of Vina Capital estimated:
“The Vietnamese real estate market will focus on real estate of housing and commerce. Because of the huge remittance of US$3.5 billion in 2005, it is probable that overseas Vietnamese will intensively invest in real estate. The remittance will create considerable purchasing power. Thus building, renting, buying for residence, production or businesses are investment targets of overseas Vietnamese"
Vina Capital is an investment fund with 100 per cent foreign capital. It has cooperated with many domestic companies to invest in real estate projects, such as a 30 storey - building on Nguyen Thi Minh Khai Street, a golf course in District 9, villas in Thu Duc District, Ho Chi Minh City, and a hotel in Nha Trang.
He also took figures as comparison: in 2005, remittance of the Philippines was US$5 billion while the area of commerce building was 5 million square metres. The area that in Vietnam was 0.3 million square metres only. This is a great attraction with both domestic and foreign investors of real estate.
From this potential, in 2005, besides the sum of US$20 million invested in real estate, Vina Capital are speeding the process to set up a new fund of real estate investment named Vina Land. This fund is expected to mobilise about US$50 million from investors in Japan, Malaysia, Singapore and European countries.
Vina Land will be posted on the London Stock Exchange (England) in the near future. Indochina Capital is looking to find an estate investment fund to the Vietnamese market with the entire capital of UD$100 million.
Several other foreign investors are also “jumping into” Vietnamese real estate market. In early 2006, a US$314 million project of South Korea has been authorised to build the new urban area of West Lake (Hanoi), which is 207 hectares large. The LG Engineering & Construction Corporation also prepared to invest in a new urban area in Nha Be District, Ho Chi Minh City with an entire capital of US$300 million.
General Director of CBRE, Mr. Marc Townsend also said that construction of 15 buildings for rent in Ho Chi Minh City had recently been completed, 5 of which are in District 1 with two over 10,000 square metre buildings. Many building, which are being built or will be built in Ho Chi Minh City, are under the foreign investment capital.
CBRE Investment shows that investors form South Korea, Japan and Taiwan have explored and studied the Vietnamese market to invest in real estate.
According to Mr. Tran Vu Anh, most foreign investors in real estate are finance organisations; only few of them are professional real estate investors from Singapore and Hong Kong. In the coming time, with it potential, the Vietnamese real estate market will attract more professional real estate investors from all over the world.
Foreign investment projects authorized from 2004 to February 2006:
Ho Chi Minh City: apartment building Saigon Pearl (US$156 million); Saigon Riviera Villas (US$35.5 million), urban area Saigon Sport City (US$130 million); urban area Thanh Cong (US$80 million); office building Vietcombank Tower (US$55 million);
Hanoi: urban area West Lake (US$314 million); office building BIDV Tower (US$43.5 million); the complex of trade centre, flats and offices Hanoi City Complex (US$115 million)
Thanh Nien
Vietnamese
