Nearly 250 projects in seven fields of investment introduced at the fair grasped the attention of investors. But retail service, finance, real estate and infrastructure development, which are considered “burning” and “sensitive” areas, were the most attractive.

Marc Towsend, CEO of CBRE real estate consulting firm, said: “Investment in real estate in HCM City will remain hot.”

Rich Mayo Smith, Chairman of Indochina Land, revealed that besides underway real estate projects, Indochina Land will invest in many more real estate, securities and tourism projects.

According to Smith, Indochina Land is not only interested in HCM City, but other provinces in the southern key economic region.

Nguyen Huu Tho, CEO of Saigontourist, also disclosed that Saigontourist would invest VND8,000 billion (US$500 million) to build a 600ha tourist zone in Can Gio and the project would be kicked off in late November 2007.

Though there is still one more year until the opening of the retail market of Vietnam (January 1, 2009), foreign investors are urgently preparing for a landing in Vietnam, especially in the southern key economic region.

“This is a sensitive issue which is attracting the interest of many investors,” said Hoang Tho Xuan, Head of the Domestic Market Policy Agency under the Ministry of Industry and Trade. Xuan said that many local and foreign retailers were racing in this field.

Domestic retailers are exerting their efforts to associate and expand their distribution networks. Foreign retailers and wholesalers which have entered Vietnam already are also trying hard to broaden their bases. Meanwhile, foreign distributors who are not in Vietnam yet are urgently preparing for the “G” hour – January 1, 2009.

New advantages for investment

Foreign investors no longer see low investment costs as an advantage of Vietnam. “Investment costs in Vietnam are not cheap now. Labour costs and accommodation costs have doubled,” said Don Lam, CEO of Vina Capital.

But it doesn’t mean that Vietnam is facing challenges in attracting investment. Some experts say that the increase of input means the growth of income and living standards and thus consumer demand is stronger. And that is a new and very important advantage of Vietnam.

“We should not disregard the purchasing power of the domestic market of Vietnam at this moment and in the future,” warned Uwe Hoelzer, CEO of Metro Cash&Carry.

The competitive advantage, according to the new concept, is not low costs, but the professionalism and the quality of the workforce. Despite some weaknesses, the quality of Vietnamese human resources and the professionalism partly satisfies the demands of investors.

Some provinces in the southern key economic region, especially HCM City, are choosing suitable investment projects, instead of picking up all as they did in the past.

Nguyen Thi Hong, Vice Chairwoman of the HCM City People’s Committee, said that the city was attracting big, hi-tech projects, which could create high added value. This is also a new trend of investment of foreign investors when they decide to pump their capital into key economic zones of Vietnam, especially a dynamic city like HCM City.

Source: Tien Phong