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ECONOMYREAL ESTATE

Foreign real-estate developers keen on Vietnamese market

Updated at Sunday, 09 Oct 2016, 16:52
The Hanoitimes - Many large foreign corporations have more and more investment in the housing market of Vietnam by forming joint ventures or buying shares of domestic enterprises.
Hanoi and Ho Chi Minh City  are the most attractive markets in the eyes of investors from Asia like Japan, Korea, and Singapore.


 
In the third quarter, the real estate market in Hanoi and HCM City recorded the formation of Maeda JV between Maeda - a Japanese firm and Vietnamese company Thien Duc to develop Waterina project. Maeda is the builder of the underground segment in District 1 of the Ben Thanh - Suoi Tien metro lines. Waterina is the first apartment project of Maeda Group in Vietnam.

As revealed by a survey consultant, Maeda spent years studying the real estate market of Vietnam before officially investing in the luxury apartment segment. Similarly, Mitsubishi Corporation joined Bitexco to establish a housing development joint venture with initial investment capital of $290 million. Kajima, the 176-year-old building group from Japan and Indochina Capital, has launched a joint venture with total investment of $1 billion dollars in the next 10 years. The capital contribution rate between Kajima and Indochina Capital is 50-50.

In the next 12-15 months, this joint venture will develop four luxury real estate projects in
Hanoi, HCM City and Danang. Indochina Capital revealed that the four projects were selected from a list of 50 potential projects in Vietnam. At first, the new joint venture will focus on luxury real estate projects in the form of high-end resorts, serviced apartments, hotels and housing. Frasers Centrepoint Limited (Singapore) recently bought 70% stake in the G Homes project from the An Duong Thao corporation. Mirae Asset Securities Co. (Korea) has collaborated with AON BNG to acquire Keangnam Hanoi Landmark Tower at the price of $350 million.

In the past nine months, big names such as Lotte and Mapletre announced they would pour capital into big real estate projects. Most recently, a foreign billionaire paid $15 million to purchase a beach villa in Da Nang. General Director of CBRE Vietnam Marc Townsend said the interest of foreign investors in the real estate market in
Hanoi, HCM City and coastal provinces is huge. They are hunting for opportunities to develop housing projects that are well connected with the city center or assets already inoperation which can bring about a stable cash flow.

According to CBRE, in the January-September period, Vietnam attracted $16.4 billion of FDI, with 6% of the volume inreal estate. According to Jones Lang LaSalle (JLL) Vietnam, project information transparency has notably improved in the residential market. In recent years, numerous policies and regulations in terms of transparency have been implemented. More recently, a list of mortgaged projects at local commercial banks has also been published, in response to the local authorities’ request for more clarity on project status across the second city. These steps are collectively being seen as positive actions to promote transparency in the market.

Hanoi now has prime land plots located in the city’s busiest streets, which have been offered to attract investors. However, due to a variety of reasons, the selection of investors has been delayed for a long period of time. The main reason given was the difficulties faced in land clearance and compensation, and the complicated procedures required to proceed with the projects.

By Tuan Minh
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