Foreign Capital Is Poured Into Real Estate

One year after the Housing Law came into effect, a series of foreign investors poured capital into real estate. In the near future, many new projects will be broken ground and blanket projects will be changed owners.

Real estate ranked the second

According to Ho Chi Minh City Planning and Investment Department, in the first nine months of this year, more than 1,000 foreign investors have implemented procedures to contribute capital, buy shares, buy back capital from domestic enterprises, with registered capital about $1.128 million.

Of which, the total number of foreign investment projects granted new investment registration certificates is 478, an increase of nearly 50% over the same period of 2015 with a total registered capital of $693.43 million. There are 86 projects adjusted to increase investment capital with the total investment capital increase of nearly $265.57 million.

Statistics from the Foreign Investment Agency, Ministry of Planning and Investment also show that the real estate sector ranks second in attracting FDI into Vietnam with nearly 30 new projects. Total newly registered and added capital is $ 604.8 million, accounting for 5.3% of the total registered capital.

Mapletree Group of Singapore has acquired Kumho Asiana Plaza

Most notably, the Midtown project with a total registered capital of more than $225.6 million. This project is located in Nam Vien area of Phu My Hung. Midtown is divided into two stages. In the first phase, the area of 28,000 sqm, the construction scale includes five buildings supplying 1,100 apartments.

In addition to direct investment, investors also witnessed many mergers and acquisitions in the real estate sector but both the buyer and the seller also contributed capital to foreign investors.

For example, Keppel Land has signed an investment agreement to hold 40% of the capital in Empire City Limited. Keppel Land will invest $ 1.2 billion to build an 86-storey high-end complex of luxury apartments, offices, retail and observation towers in Thu Thiem.

Next are valuable deals such as Singapore’s Mapletree Group acquires Kumho Asiana Plaza for $ 215 million. Frasers Centrepoint Limited Singapore buys 70% stake in G Homes from An Duong Thao Dien Group.

However, the biggest and most valuable deal since the beginning of the year has been Korea’s Mirae Asset Securities Co in collaboration with AON BNG Group to spend $ 350 million to acquire Keangnam Hanoi Landmark Tower.

Japanese investors lead

According to CBRE, in the past nine months, Vietnam attracted $ 16.4 billion in newly registered FDI and increased from 1,820 projects. Compared with the same period in 2015, FDI has decreased by 4% but still considered as a good level in the region. Of this amount, 6% of capital inflows into real estate business.

With these positive signals, Vietnam’s economy in the last months of 2016 is forecasted to grow strongly. Real estate market is expected to have many positive and exciting developments in the last months of 2016.

Maeda Group and Thien Duc Company develop Waterina Project

The latest foreign investor in Ho Chi Minh City is Japan’s Maeda Joint Venture. This joint venture and Thien Duc Development Company Waterina project in District 2. Maeda is also the construction of the underground passage in District 1 of Metro No. 1.

Waterina is a high-end project in district 2 with 86 apartments. Most of them are high-rise apartments with high standards of luxury and convenience. This is the first housing project of the Maeda Group in Vietnam. The project has a total investment capital of $30 million, which will be developed on a scale of 2.00 m2.

Similarly, Kajima Group of Japan also signed an agreement with Indochina Capital to establish a joint venture specializing in real estate investment in Vietnam with a total investment of about $ 1 billion in 10 years.

This is the first time Kajima Group has invested in Vietnam as a developer. This joint venture will acquire real estate projects of domestic enterprises.

Creed Group has contributed capital to implement River City project on the scale of 11.25 ha in district 7. This project has total investment capital of about VND 12,000 billion with 8,000 apartments, offices and gates. with a construction density of 23.6%.

Creed Group contributes capital to deploy River City project

Mitsubishi Group signed with the Bitexco Group to set up a joint venture to develop a housing project with a total initial investment of $ 290 million. Mitsubishi’s real estate investment subsidiaries have also cooperated with Korea’s Lotte Group to implement the Thu Thiem Eco-Smart City complex in Thu Thiem New Urban Area.

The total investment capital that Lotte committed to pouring into the Thu Thiem Eco-Smart City complex is about $ 2.2 billion. The project covers an area of 16.71 hectares, including a commercial center, hotel, serviced apartment, office, apartment … This project will be groundbreaking in early 2017.

According to the HCM City Real Estate Association, foreign investors are focusing their business on Vietnam. In the form of mergers and acquisitions or joint ventures, foreign investors are trying to gain a foothold in the market. Consumers also benefit from more supply.

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