The Analysis And The Assessment For The Vincity Of Vingroup

Vincity is the real estate brand name of the Vingroup and it is the first time the corporation No. 1 on high-end real estate develops the popular projects. Let’s join us to analyze and assess for it.

After many successful projects from the high-end real estate, the Vingroup Real Estate Group has recently decided to join the low-cost Vincity brand line to provide the low-income and middle-income market in some provinces and cities in Vietnam: the Vincity Apartment project. On Dec 4th 2016, Vingroup officially announced the VinCity real estate brand name. In Ho Chi Minh City, Vingroup will invest and build in District 7 and District 9…

See more: Which Do People Have When They Buy Vincity Apartment?

The impact of the VinCity Cheap Apartment (the Vincity Cheap Apartment of the Vingroup in District 9) when launching 200,000 – 300,000 apartments with the price of $31,818

Firstly, the benefit of the VinCity Apartment project in District 9. View detail information of Vincity District 9 here:

With the real demand segment, the demand for construction is simple and the Vingroup also has the construction companies, the concrete and the timber … so the profit will increase rapidly in the chain.

In construction, if the design is reasonable, the cost savings will be up to 5%, then the mass construction in large amount will be reduced about 5%, the construction companies will make the profits of 5% – 7%, the supporting companies will also make the profits of 5-10%. In general, the advantage in the chain will bring the additional profits up to 5-10%.

It will increase when coming into operation the commercial services, medical services, school, entertainment.

Analysis of the land prices suitable for the cheap apartments

The expected price for all seven provinces is $31,818, this means that the price in Saigon and Hanoi will be 20% – 30% higher, so when being launched in Saigon the estimated price is $38,181.

The average earnings yield in the real estate market is 15% – 20% of total investment capital for normal conditions and ordinary products, the cost will be about $32,454.

– The area of the average apartment: 60sqm.

– The average land use coefficient: 5

– Construction cost: $270/sqm

–  The price of land: $77/ sqm of floor space

– With the coefficient of land use of 5, the land price: $386/sqm

– With the coefficient of land use of 6, the land price: $463/sqm

– The land price: $409 – $455

*The land price is the price including the land use fee and the expectation of the buyer

ð The reasonable land price will be $318 – $363

Where to buy the land is reasonable

The prices of the land being used before are from $318 to $363, the land has not yet been paid about $182 – $227/sqm.

The scale of land: 200,000 apartments in the year, so each year it will be launched 40,000 apartments, Saigon is used about 40%, equivalent to 16,000 apartments/year. Therefore, the number of the land area to be deployed is 24 hectares/year and 120 hectares/5 years.

With this way, the Vingroup Group is creating the large area to increase the value in the future, so it is very likely that the VinCity project will select the lands over 10 hectares to deploy the project.

Ideal areas to choose

– District 9: including a part of the Green City, the area near Metro terminal…

– Thu Duc District: along Pham Van Dong Boulevard and Kha Van Can Street, Ngo Chi Quoc Street, …

– Binh Chanh District: Provincial Road 10, along with the expressway, Nguyen Van Linh …

– Hoc Mon District: Ba Diem, Dau Moi Market area.

– Nha Be District: Nguyen Binh, Nguyen Huu Tho …

– Binh Tan District: Tan Tao Industrial Zone, Vinh Loc B …

– District 12: Le Van Khuong, Resettlement Area 38 hectares …

The overview of the business, investment and financial aspects

Business viability: Good price products plus the large residential areas to meet the demand for living space, which can convince people who have real needs because of the good communal infrastructure and the number of products for 16,000 apartments.

Investment visibility: When Vin is well operating the construction chain, the supply to the facility will be very profitable.

Financial visibility: Products are priced well, suitable for the needs of the consumers, so the sales time is shortened as well as the supporting capital of financial institutions in many forms should be spent not too much.


Vincity is cheap real estate

Impact on the whole market

The number of apartments is 16,000 apartments, which will have a great influence on the investors having the apartments less than $45,454. Therefore, it will quickly eliminate the unscrupulous developers and poor quality construction. Home buyers will receive the benefit when other investors are qualified to compete with the VinCity.

The market at the end of 2016 is trading well with the apartments less than $90,910 but there are the signs of the saturation with the high-end apartments. The VinCity plans to deploy 200,000 – 300,000 apartments at $31,818 in the next five years, which will deliver “good wind” for the market in 2017.

Assessment that the VinGroup has built the VinCity brand name in District 9 will lead to the big competition with businesses running in soft-priced housing, Mr. Phuc said that this is a good thing to increase the variety to market and create opportunities for residents.

The participation of the VinGroup means that the competition will be bigger and businesses will have to create the high-value apartments and their own mark to attract customers, which will bring the nice apartments to the customer.

Considering the real estate broker, this is good news for the low-income people who have demand for housing in cities, especially in Hanoi and Ho Chi Minh City. As the VinGroup started to launch the VinCity brand name in District 9, it will definitely affect the investors who have projects in the surrounding areas. The VinGroup is considered as the first choice of home buyers when being comparing.

However, there is a disadvantage that in the next couple of years many investors will be affected by the huge housing market demand while the Vingroup’s strategy has been prolonged at least in the next 5 years.

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