With five companies from the Republic of Korea licensed to invest US$314 million in to West Ho Tay urban area is evidence of the increasing interest of investors from East Asia in Vietnam’s real estate market.
Many Korean companies are exploring and promoting investment in real estate projects, not only in Hanoi and Ho Chi Minh City, but also other provinces, such as Ha Tay, Binh Duong, and Da Nang city. Daewon, one of the five companies joining the West Ho Tay project, is promoting the implementation of the biggest flat and house project in Da Nang. Yunam Howang, overseas director of Daewon, said that the company would invest US$80 million in building 1,200 flats, offices and shops on an area of 4.3 hectares near the Han river. The project, with many phases, will have its construction finished in between seven and eight years. If procedures for investment are completed smoothly, Daewon will start the first phase, building between 300 and 400 flats with a total investment of between US$20 million and 25 million in late 2006.
The project is within a plan for investment expansion of Daewon in Vietnam, after the company was licensed to invest in the first flat and office project in Ho Chi Minh City under the trademark of Cantavil. Cantavil is a joint venture set up by Daewon and the Thu Duc Housing Development Joint stock Company with a total investment capital of US$20.5 million.
In 2005, Daewon was licensed to set up a join venture with the Hoan Cau Company to invest in a block of flats, valued at US$29.5 million in Ho Chi Minh City. The project started in late March. Yunam Howang said that the company was negotiating for its investment in Hanoi.
After Daewon, another company from the Republic of Korea, Booyoung, started its operation in Vietnam. According to the People’s Committee of Ha Tay province, the company is promoting its investment of US$200 million in building a high block of flats in the Mo Lao new urban area, which is 10 kilometres away from Hanoi’s centre. Also, the company has pledged to build a bus station in Ha Tay, which is valued at US$2 million.
In Ho Chi Minh City, LG Engineering & Construction is negotiating about its plan to build a 360 hectare new urban area in Nha Be district and some projects in other places. Thai Van Re, director of the Ho Chi Minh City Department of Planning and Investment, said that the company had been expected to build 14 kilometres of the Tan Son Nhat - Binh Loi motorway, valued at US$318 million. In exchange, Ho Chi Minh City will lease the company an area of land of the same value, so the company will be able to develop urban areas and other real estate projects.
Re said that the plan was good as Ho Chi Minh City lacked capital for infrastructure development. The building of the motorway will ease traffic from the Tan Son Nhat airport, while the city would have another beautiful and modern urban area like Phu My Hung.
Despite the fact that the local real estate market seems to have been frozen, Yunam Howang said, many Korean companies were heading for Vietnam, considering it an emerging market with a more dynamic economy and improved investment environment. The investor said that the Vietnamese market had a huge demand for high quality flats at reasonable prices. These are products Daewon have marketed and will market.
P.V
Vietnamese
