Opportunities available here – in Vietnam

In mid October, Malaysia’s biggest real estate group, SP Setia, opened a representative office in the Broadway building in the Southern Saigon area in HCM City. The group’s president, Tan Sri Liew Kee Sin, said that this was the right time to develop real estate projects in Vietnam. The group is planning to make investments in big projects in the city, anticipating that the demand for high-grade accommodation and office buildings will increase sharply.

Like SP Setia, many foreign investors also said they thought that real estate projects could bring a lot of profit. Minh Calvin Lam, a Viet Kieu in the US, was optimistic about his decision to establish Pacific InDe Corporation, specialising in investment in real estate projects in HCM City. As a managing director, Mr Minh said he planned to set up an investment fund with the capital of $50mil, which will be injected into real estate projects.

“We can see big potential here, in Vietnam, as the demand for high-grade accommodation, especially by young people, who have just begun working, is increasingly high. They have got used to high buildings, and that is why we have decided to make investments,” he said.

The Republic of Korea’s (ROK) Daewon group proves to be most agile in Vietnam. It is investing in many projects in Vietnam. After being successful with Cantavil building in district 2 in HCM City, Daewoo has been developing many other projects in HCM City, Da Nang, in the central region, and in Hanoi.

Tran Trong Hieu, Investment Director of IDJ, which organised two big investment workshops recently in Hanoi and HCM City, said that 60% of investment commitments made at the two conferences were in the real estate sector. He said that foreign investors were interested in projects on infrastructure development in industrial zones, office buildings and resorts. Most of the said investors are coming from Asia.

Do Thi Loan, General Secretary of the HCM City Real Estate Developers’ Association (HoREA), said that HoREA receives five or six delegations of investors a day these days, who come to seek business opportunities.

Everyone has their own way

The fact that the ROK’s Topvina group has reached an agreement on leasing Tuan Chau tourism complex, which has been developed by Vietnam’s Au Lac Company for business purposes, has become a hot topic among investors these days.

Analysts said that Topvina has taken a shortcut to reach its target: developing one of the best and most lucrative tourism complexes in Vietnam. The next few years will be the ‘age of resorts’ in Vietnam, and developers will be able to make fat profit with their resorts.

Topvina would have spent a lot more time to seek a project for itself, had it not leased Tuan Chau complex. On average, it takes an investor 5-7 years to find places for a project, construction work and the installation of facilities before the project can make profit. Meanwhile, the time will be much shorter for Topvina.

Director General of Kumho Asiana Plaza Saigon project, Bok San Chang, revealed that his group had to spend an additional $9mil compared to the initial estimates to get the rights to develop the project. The most important thing is that the site clearance process has finished; that part of the work always takes a lot of time, he said.

A source said that the project on a 46 ha modern entertainment area in the Southern Saigon new urban area, called ‘Saigon Max’, may fall into the hands of a foreign investment fund.

Source: TBKTSG