Ho Chi Minh City and Hanoi are two areas of interest to investors in Asia (Japan, Korea, Singapore) in the past nine months.
In the third quarter, Ho Chi Minh City real estate market recorded the formation of Maeda Joint Venture (a company from Japan) and Thien Duc Company developed the Waterina project in District 2. Maeda is the construction unit of the Underground work in District 1, HCMC, a part of Metro line 1 Ben Thanh – Suoi Tien. With housing development channel, Waterina project is the first luxury apartment project of Maeda Group in Vietnam.
According to a real estate consultant in HCM City, the foreign investor spent many years researching the Vietnamese real estate market before officially joining the luxury apartment segment.
Similarly, Mitsubishi Corporation signed with Bitexco to establish a joint venture to develop a housing project with a total initial investment of US $ 290 million. Another case, Kajima, a 176-year-old Japanese construction company and Indochina Capital, has launched a joint venture with investment capital of US $ 1 billion over the next 10 years. The capital rate of the joint venture Kajima – Indochina Capital (ICC – Kajima) is revealed 50-50 per side.
In the next 12-15 months, the joint venture will deploy four luxury real estate projects in Ho Chi Minh City, Hanoi and Da Nang. The Indochina Capital disclosed that the forthcoming four projects were screened by partners on the list of 50 potential projects in the Vietnamese market. At the beginning, the new joint venture will focus on luxury real estate projects in the form of resorts, serviced apartments, hotels and residences.
Kajima Group’s foreign market development director, Keisuke Koshijima, said: “Vietnam is always a key market for us, and we want to create worth real estate for the investors and customers in this market. “
In the private stock investment channel, Frasers Centrepoint Limited (Singapore) has purchased a 70% stock in G Homes project from An Duong Thao Dien Group. Mirae Asset Securities (Korea) has cooperated with AON BNG Group to spend the US $ 350 million to acquire Keangnam Hanoi Landmark Tower.
In addition, over the past nine months, big names such as Lotte and Mapletre have also announced focusing strongly capital into real estate projects in East HCMC. Recently, the market has just recorded more trades of individual investors. A foreign billionaire has spent the US $ 15 million (equivalent to 330 billion) for Da Nang beach villas.
In the HCMC real estate market report last September, Marc Townsend, CEO of CBRE Vietnam recently received a series of questions about the wave of FDI in Vietnam.
Mr. Marc Townsend confirmed that the interest of foreign investors in real estate market in Ho Chi Minh City, Hanoi and the coastal provinces is very large. Taste of these investors is the hunt for opportunities to develop housing projects that are well connected to the city center or those that have been put into operation, can bring about stable cash flow.
However, the expert also said that most foreign investors do not make decisions quickly but spend a lot of time studying and researching the market, then specific moves.
According to CBRE, in the past nine months, Vietnam attracted US $ 16.4 billion of newly registered FDI and increased from 1,820 projects. Of these, 6% of capital flows into real estate business. The current reaction of foreign investors to the Vietnamese market is quite positive.
The wave of real estate investment in Vietnam of the foreign companies has been more and more strongly, it is explained by two reasons. Jones Lang LaSalle said that the attractiveness to foreign investors first because of the basic indicators of the market. It is the speed of urbanization, the young population, the expected income growth rate, the economic stability and integration, the middle class more and more … In addition, efforts to improve transparency index of the real estate industry also plays an important role in attracting foreign investment.
According to Jones Lang LaSalle’s 2016 GRETI report, Vietnam ranks relatively low on transparency in the real estate market (ranked 68th out of 109 countries). However, compared with previous years, Vietnam’s image is improving year by year.
At present, foreign investors can easily access market information and legal framework gradually forcing stakeholders to follow the transparency process. Domestic project developers have also taken a long leap in adopting a technology. These are three typical factors that improve the transparency of Vietnamese real estate. According to this unit, the transparency index has contributed significantly to improving the investment environment for Vietnamese real estate in the eyes of foreign investors.
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