Foreign investors have begun to pump huge foreign direct investment (FDI) projects into Vietnam’s real estate market, especially in Ho Chi Minh City, brightening up a previously gloomy atmosphere, a local newspaper said.
The stagnation, lasting over three years with land prices still beyond most local people’s affordability, does not discourage foreign firms from entering Vietnam for large projects.
On the contrary, they are more and more interested in this area as they see great hope in the country, with the population increasing by over a million every year.
Vietnamese living standards have been much improved thanks to the economy’s steady growth, encouraging more wealthy overseas Vietnamese to come back looking to buy houses.
Meanwhile, WTO entry is seen as a driving force for further economic development of the Southeast-Asian nation.
However, housing developers are far from satisfying the booming demand in Vietnam, said Lui Chong Chee, CEO of Singapore-based CapitaLand Residential, emphasizing that this is a very good chance for foreign investors.
To warm up the property market, the Vietnamese government is also considering permitting foreign investors to obtain property projects from local developers, particularly in big cities like Ho Chi Minh City and Hanoi.
The southern hub of Ho Chi Minh City is welcoming a wave of investment from Asian countries and territories, especially the Republic of Korea (RoK) and Singapore, as a series of real estate projects worth hundreds of millions of dollars in total are underway.
RoK’s Pumyang Group and the local Industrial Construction Joint Stock Company were allowed to develop a US$14 million office and apartment complex with 30-storey twin towers in District 2, scheduled for completion in 2008.
Keppel Land, owned by Singaporean Keppel Group, is implementing its Saigon Riviera project with 101 villas and is also preparing to launch the Saigon Sports City project. Total capital for both projects reaches US$130 million.
Capitaland Residential will join hands with two Vietnamese partners to launch a joint-venture to deploy a US$14 million apartment project in District 2. It also plans to build a new urban area in the city’s west.
Meanwhile, South Korean Daewon Co. Ltd. and the Southern Seed Joint Stock Company recently reached an agreement to build an apartment-office-trade complex worth US$45 million. The company already has licenses for three projects namely Daewon Cantavil An Phu (US$20.5 million), Daewon Binh Thanh (US$29.5 million) and Daewon Cantavil (US$30 million).
The Kumho Industrial Co. Ltd., an affiliate of the South Korean Kumho Asiana Group, in October kicked off construction of the US$230 million hotel-office complex Kumho Asiana Plaza in the city. The project includes a 21-storey hotel, a 21-storey office building, a 32-storey apartment block and other facilities. It is slated to finish in 36 months.
Two other large projects, the Saigon Happiness Square (Taiwan) costing US$428 million and the Bonday Ben Thanh Tower (Hong Kong) worth US$55 million, are in the pipeline.
Projects by Boo Young (US$170 million), Lee & Co (US$70 million), and Posco-Vinaconex (US$2 billion) are still awaiting approval from municipal authorities.
Notably, some other foreign real estate enterprises like Tradco from Switzerland and Guocoland from Singapore, are also keen on residential and shopping complex projects in Ho Chi Minh City and its outskirts.
Hanoi’s property market has been getting hotter with two major foreign-invested projects – the $314 million Tay Ho Tay project and the $114 million Hanoi City Complex.
Deputy Minister of Natural Resources and Environment Dang Hung Vo said, in the coming time, local property suppliers who failed to conduct their projects due to financial difficulty could possibly transfer them to foreign investors.
Vo added related regulations were being considered by the government, noting that current land regulations would be amended to facilitate real estate development by ensuring fair competitiveness between local and foreign investors.
Young People
Vietnamese
