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FDI flowing into HCMC's property sector rises three times

 

Ho Chi Minh City’s real estate sector attracted 984.4 million USD in foreign direct investment (FDI) during January-November, triple the figure from the same time in 2016.


The surge in FDI capital was led by large projects, including Mizuki Park residential area in Binh Chanh district with total investment of 351 million USD with Japanese partners Nish Nippon and Hankyu. Japanese investors also put 100 million USD into another real estate project in the city while Singapore-based Keppel Corporation is spending more on property projects in District 2 and District 7.

capital-flow-in-ho-chi-minh-city


roup in collaboration with Bitexco group. A joint venture valued at 1 billion USD between Kajima Corporation, also from Japan, and Indochina Capital is slated for investment in the city in the next 10 years.
According to CBRE Vietnam’s Managing Director Marc Townsend, foreign investors are increasingly interested in property in Ho Chi Minh City. They are hunting investment opportunities in housing projects with well-developed transport infrastructure or those which have been put into operation as they can bring back stable income, he stated.

Rapid urbanisation, a stable economy, deep integration, a growing middle-class population and a transparent business market have made Ho Chi Minh City attractive to foreigners, CBRE said. Foreign investors can easily access property market information, legal frameworks and procedures for project licensing.

Ho Chi Minh City was ranked third in a survey of 50 cities worldwide for property rental growth. The survey, conducted by real estate firm Savills, also placed the southern hub fifth in terms of investment prospects, and second for development prospects.


(Source: hanoitimes.com)


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In 2017, foreign capital into real estate Vietnam set a record

 

Foreign capital inflows into Vietnam's real estate market may set a record in 2017.

real estate vietnam 2017

More than $ 2 billion


A report by the Foreign Investment Agency shows that in the first 10 months of 2017, one of the six large-scale foreign-invested projects is the smart complex at functional area 2A in Thu Thiem new urban area. (District 2, Ho Chi Minh City), with a total registered investment of $ 885.85 million invested by Korea. Of the 19 industries attracting foreign investors, real estate ranked third with registered capital of 2.04 billion USD, accounting for 7.4% of total foreign investment in Vietnam in 10 months.

Ho Chi Minh City is the leading locality in attracting foreign investment in real estate. From the beginning of the year to the end of October, in more than $ 5 billion of foreign capital, real estate ranked second, accounting for 32, 9%. In the first 10 months of 2017, Ho Chi Minh witnessed many "handshakes" between domestic developers and foreign investors.

Notably is the cooperation between Nishi Nippon and Hankyu (Japan) with Nam Long Investment Joint Stock Company to build Mizuki Park residential area of ​​26ha in Binh Chanh distric with total investment capital of 351 million USD or Kim Son Land attracted $ 100 million from Japanese investors.

Meanwhile, Dong Nai, Long An attracts foreign capital inflows into industrial real estate.The investors are mainly from Japan, Taiwan and Singapore.

Talking about more than $ 2 billion of foreign capital into the real estate market in the past 10 months, Mr. Ngoc Khuong - Director of Savills Vietnam's investment division said this is a huge amount because a the package of 30 trillion dong of housing loans and housing support under the Government's Resolution 2 2013 only completed disbursements in 2016 (including extended period), while in just 10 months, foreign capital for real estate has exceeded $ 2 billion. This shows that the real estate market in Vietnam is attractive to foreign investors.

In answer to the question, is there a paradox between $ 2 billion of foreign investment capital and the reality reflected in the stock market recently when real estate stocks are always in the category of net sales, a specialist in the capital market, said that listed companies reflect only part of the picture of the real estate market. Actually foreign investors are quite interested in real estate stocks. However, the value stocks such as VIC (Vingroup), Novaland (NVL), Khang Dien (KDH), the area for foreign investors to participate is no longer.

Continuing to capitalize


Commenting on foreign capital inflows, in a statement on M & A real estate shortage of clean land, issued in August last, Jones Lang Lasalle Vietnam (JLL) said that the inflows of foreign investment into the real estate sector is expected to hit record levels in 2017 and 2018. Accordingly, in large cities, residential real estate is still "fertile land."

This is evidenced by the research report on apartment market with the theme "Big Wave" that Savills Vietnam launched. Accordingly, TP. Ho Chi Minh City and Hanoi are the two provinces with relatively high number of new households, 58,000 and 42,000, respectively, leading to the continuous increase in housing demand.

JLL Vietnam commented, generally, the houssing segment is still the most attractive segment with foreign businesses. Foreign investors now tend to move into the commercial real estate market, especially in grade A offices that are well located in major cities such as Ho Chi Minh City, which has potential growth in capital value and relatively high investment yield, ranging from 7-8%.

"We find that office rents in Vietnam are higher than in other countries in the region, which reflects a shortage of supply," said JLL Vietnam.

(Source: tapchitaichinh.vn)

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Real estate calls for more foreign investment

 
Real estate calls for more foreign investment

The number of foreigners buying real estate products in Việt Nam has increased, but the domestic property market needs policies to attract more foreign investment. – Photo cafef.vn

The number of foreigners buying real estate products in Việt Nam has increased, but the domestic property market needs policies to attract more foreign investment, according to experts.

Nguyễn Trọng Ninh, director of the Housing and Real Estate Market Management Department under the Ministry of Construction, said a policy on licensing foreigners buying and owning houses in Việt Nam was issued in 2008.

In 2014, the Ministry of Construction reviewed and evaluated this policy during its study of the amendment of the Law on Housing. According to the ministry, from 2008 to 2014, some 126 foreigners owned property products in Việt Nam. Therefore, it proposed to add conditions for foreigners to buy houses in Việt Nam. The amended Law on Housing 2014 including those proposals was passed in 2014 and came into effect in 2015, Ninh said.

Following two years of implementing the amended Law on Housing, the domestic property market has developed in the positive direction in the segment of selling real estate products to foreign buyers, and foreigners have supported the proposals, according to reports from localities sent to the construction ministry.

From 2015 until now, some 750 foreigners received housing ownership certificates, six times higher than the period from 2008 to 2014.

However, there are not many transactions involving foreigners buying property products in Việt Nam due to many reasons, including financial ability of foreigners, their jobs in Việt Nam, demand, location and price of houses, according to Ninh.

As a state management agency in the field of housing, the Ministry of Construction said in the current period, regulations on housing and policies related to housing in Việt Nam for foreign individuals and organisations had been open, including subject, conditions on ownership and the number of houses that can be owned by foreign buyers.

Meanwhile, regulations on the number of houses that foreign organisations and individuals can own in buildings and housing projects are in accordance with the actual conditions of Việt Nam and international regulations.

Nguyễn Khánh Duy, Savills Việt Nam’s HCM City residential sales director, said a limit on the number of apartments owned by foreigners was very important to minimise and prevent negative impact on domestic socio-economic development.

Việt Nam’s Circular 19/2016/TT-BXD and Decree 99/2015/NĐ-CP regulate the number of houses owned by foreigners to tighten procedures on re-sale of real estate products and increase transparency in the process of implementing administrative procedures for these property products.

However, Duy said an adjustment that will create suitable quotas for certain kinds of property products, such as resorts or Grade A apartments, should also be considered carefully. The state should have flexible quotas to create a positive dynamic for the local property market because Việt Nam has 82,000 foreigners working and living here and more than four million overseas Vietnamese, who have high demand for buying housing products in Việt Nam

According to Savills Việt Nam, the 2015 amendment of the Law on Housing allowing foreigners to buy houses in Việt Nam was considered a positive change in policy. That action has promoted further development of the local real estate market.

It was expected to create more favourable conditions in stimulating development of investment, tourism and service in the real estate sector.

In fact, property projects and products attracting foreigners have been mainly in the high-end segment.

Markets attracting foreign buyers include HCM City, Hà Nội and Đà Nẵng, according to Savills Việt Nam. However, there are a small number of red books or land use rights certificates that were licensed to foreign organisations and individuals buying houses in Việt Nam. The number is lower in comparison with the high demand from foreign buyers because foreigners are not yet clear about legal procedures in Việt Nam, while state administrative offices in some localities are not familiar with regulation related to foreigners.

For large investors, to find suitable property projects, they often choose to work with an international consulting firm that has a network of offices and branches in many countries to ensure that all questions related to legal and trading procedures will be explained satisfactorily. Sometimes, they do not need to pay more money for consulting services.

The big investors will choose a company with experience, reputation and ability to communicate well in many languages to save time and money.

However, in terms of customers, these investors should have specific requirements on the project to get the most detailed consultation information, Duy said. 

(Source: Vietnamnews.vn)

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Why Vietnam's Property Market Is Like China's (In A Good Way)

 
Vietnam is looking more and more like the “next China.” It has similar demographics as the mainland, with a burgeoning middle class, and is also emerging from a Communist administration that is slowly opening the door to foreign investment. Vietnam has a particularly young population driving strong economic growth, and is undergoing the leap from an agrarian economy right into a post-industrial, service-driven economy in a matter of a couple of decades.

That is driving demand for urban property. Real estate in Vietnam saw a 12% increase in investment this year compared with the year before. Greater market transparency and projected economic growth of 6%, similar to this year’s rate, add to the momentum.

Residential property and hotel space are in particular demand. The Vietnamese housing market has not been well-developed in the past, with a very small supply, so it experienced huge booms and massive busts. Prospective buyers got into fistfights while waiting in line to buy the handful of flats on offer. But Vietnamese property appears to be in a steadier upward trend now that the market is maturing.

Why Vietnam's Property Market Is Like China's
High residential buildings under construction near Saigon river in Ho Chi Minh City. (Photo credit: HOANG DINH NAM/AFP/Getty Images) 


Ho Chi Minh City – the former Saigon – is the second-most popular market in Asia for investment into residential apartments, according to the Urban Land Institute’s report on "Emerging Trends in Real Estate Asia Pacific 2017." In all, 71.4% of institutional investors rate Vietnamese apartments a buy, behind only Bangalore, where investors are unanimous that condos are a good bet – but they will struggle to find supply.

The supply is coming on line in Vietnam to meet demand from its population of 95 million. Investors are targeting smaller flats that appeal to domestic buyers. The residential sector “has now come good after a number of false starts, particularly if you focus on the local purchaser market,” one investor told the ULI.

Affordable urban apartments are what the locals moving into Vietnam’s cities for the first time are seeking. Relocation of industry out of China is one factor causing Vietnam’s economy to thrive. Economic growth is running at 6.4%, according to Trading Economics, almost matching China’s rate of 6.7%.

Vietnam is benefitting economically from rising wages and higher operating costs in China. For instance, Ningbo-based Shenzhou International Group Holdings is ramping up operations in lower-cost Vietnam, alleviating some of its capacity constraints. Unfortunately, however, the Trans-Pacific Partnership appears to have fallen apart with the election of Donald Trump – economists calculated that Vietnam would have been the biggest beneficiary.

Still, Vietnam is a strong industrial draw. Shenzhou is an OEM company that makes clothing incorporating materials such as Lycra and thermal fabrics, with a specialty in sportswear. Behind the scenes, it supplies Uniqlo and other top brands such as Adidas, Mizuno, Nike and Puma, approaching 15% of the clothing supply of those companies except Puma's, which is at 30%.

The factories that companies like Shenzhou are building are bringing people into cities, and causing demand for urban housing. Farming has shrunk from some 25% of the economy in 2000 to 18% in 2014, a dramatic shift, while industry has risen from 36% to 38% of output, according to the CIA World Factbook.

Services, including tourism, has seen the biggest boom and now accounts for 44% of the economy, per a 2015 estimate from the CIA Factbook. (The previous numbers are from 2014, explaining why the sectors add up to more than 100%).

Vietnam's Property Market
High residential buildings under construction near Saigon river in Ho Chi Minh City. (Photo credit: HOANG DINH NAM/AFP/Getty Images)


Vietnam has a few advantages over China. For instance, when I was traveling around Vietnam, I was surprised at how few old people you see. This may sadly be a result of the “American War,” as the Vietnam War is known in country. The median age is 30, whereas it is 37 in China.

That means the bulk of the population is at the point of maximum productivity. The enthusiasm to make things happen is palpable – you feel, as a tourist, as if you could venture into the street and tell someone you want to go hang gliding, or spelunking, and they would make it happen that day.


(Source: Forbes.com)


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Foreign investors target Vietnam’s property market

 

Vietnam's real estate market is showing signs of flourishing.

Vietnam's real estate market is showing signs of flourishing with international investors trying to secure a foothold in the market either through mergers and acquisitions or by forming joint ventures.

Foreign investors target Vietnam’s property market
A view of Hanoi, where investment in Vietnamese real estate is surging. Photo by Reuters


Foreign buyers, mainly from Japan, South Korea and Singapore, have their eyes on the country’s two major cities: Hanoi in the north and Ho Chi Minh City in the south. Notably, investors have expressed an interest in luxury properties, according to a Ho Chi Minh City-based property consulting firm.

Vietnam’s property market has captured the attention of international buyers, especially Japanese, as a potential investment destination which may generate an annual return of between 20 and 25 percent.

Japanese real estate companies are planning to invest up to $2 billion in the Southeast Asian country, said Than Thanh Vu, president of a merger and acquisition consulting company.

One of Japan's largest builders, Kajima Corporation, has formed a joint venture with Indochina Capital to channel funds worth of $1 billion into property developments in Vietnam over the next 10 years. The 50:50 partnership has plans to kick off four large-scale high-end property projects in Hanoi, Ho Chi Minh City and Da Nang in the next 12-15 months.

Vietnam is currently viewed as one of the markets with the most potential in Asia for foreign direct investment, said Keisuke Koshijima, Market Development Executive.

Kajima has identified the country as the next key driver for its growing business in the region, he added.

The company’s strategy is to create high-value properties to cater for the growing middle class in Vietnam, he continued.

Foreign investors are also entering Vietnam’s property market through mergers and acquisitions.

Singapore-based investment fund Frasers Centrepoint Limited has acquired a 70 percent stake in a luxury residential apartment project from a local real estate developer. The $100-million project, G Home, covers one hectare in downtown Ho Chi Minh City.

Securities firm Mirae Asset, part of independent financial services group Mirae from South Korea, spent $350 million to become the owner of Vietnam’s tallest building, the Keangnam Landmark.

Marc Townsend, general manager of CBRE Vietnam, a commercial real estate services and investment firm, said at a workshop last month that foreign buyers prefer stable operating properties like apartments so that they can make a quick return on their investments.

According to CBRE, newly-registered foreign-direct investments in Vietnam hit $16.4 billion in the first nine months of the year, and about 6 percent of that went into the real estate sector.

The number of newly-established companies in the real estate sector almost doubled on-year to 2,160 from January to September, said the Ministry of Investment and Planning in a report, adding that registered capital also increased 2.5 times from the same period last year. That means on average eight property firms have been launched daily in the past nine months.

Investor interest has been fueled by Vietnam’s fast-growing economy, accelerating urbanization and expanding middle-class population with higher incomes

In the newly released biannual Global Real Estate Transparency Index 2016 by property consultancy firm Jones Lang LaSalle (JLL), Vietnam ranks 68th out of 109 markets, far below other countries in the region such as Singapore 11th and Thailand at 38th.

According to JLL, transparency across Vietnam’s real estate markets has steadily improved over the last few years with better access to market information, increased availability of market data and improved enforcement of planning and land use regulations.


(Source: Vnexpress.net)

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Vietnamese Government encourages OV to invest in real estate market

 
The Ho Chi Minh City People’s Committee has asked relevant departments to tackle problems in granting house ownership certificates to overseas Vietnamese to encourage their investment into the real estate market.

Vietnamese Government call for investment real estate market
Foreigners are provided with information about buying houses


Statistics of the municipal Department of Construction revealed that only 15 overseas Vietnamese and foreigners were granted house ownership certificates in the city during the past two years. The figure was too modest compared to the number of overseas Vietnamese and foreigners who lived and worked in HCM City, the department said.

Experts said that this was caused by complicated procedures, as well as slow progress in identifying areas and projects, which cannot be sold to foreigners. Tran Hoa Phuong, Deputy Chairman of the HCM City Overseas Vietnamese Committee, said that the most difficult procedure was still in identity confirmation.

The confirmation of identity for overseas Vietnamese was jointly conducted by the Vietnamese embassies, the State Committee for Overseas Vietnamese Affairs and provincial/municipal judicial departments of foreign countries, Phuong said. He added that the money transfer from foreign countries to Vietnam also needed to be in compliance with the laws.

Vietnamese Government call for investment real estate market


Expert Nguyen Tri Hieu said the regulations must be more open while the promotion of projects, which can be owned by foreigners, must be enhanced.

Deputy Chairman of the municipal People’s Committee Tran Vinh Tuyen said in a document sent to relevant departments urged them to speed up the identification of areas which cannot be owned by foreigners, to ensure national security. The Department of Construction must clarify the list of commercial housing projects, which cannot be sold to foreigners and make it public on the department’s e-portal, he said.

The legal framework for the Department of Natural Resources and Environment to grant ownership certificates to overseas Vietnamese and foreigners must also be improved, he added. Statistics of the HCM City Real Estate Association revealed that around 22 percent of remittances into the southern city flew into real estate.

In the first nine months of this year, HCM City attracted more than 3.3 billion USD worth of remittances, up 6 percent over the same period last year.


(Source: Hanoitimes)


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FDI continues to invest in Vietnam’s real estate

 
The domestic real estate market continues to receive hundreds of millions of dollars from foreign investors, mainly through mergers and acquisitions (M&A), Savills stated.

FDI continues into Vietnam’s real estate
Vietnam is witnessing an increase in the value of real estate projects. (Credit: kinhtedothi.vn)


According to a recent report by the UK-based real estate services provider, in the first six months of 2017, Vietnam continues to attract significant foreign direct investment (FDI). Disbursed FDI reached US$7.72 billion which is up 6.5% over the same period last year, while registered capital was estimated at US$19.22 billion, up 54.8%.

According to Savills Vietnam, the increase in FDI is largely focused on the manufacturing sector and producing results in the field industrial infrastructure development. In May, Hemaraj Land&Development of Thailand and Cienco 4 of Vietnam officially confirmed their cooperation to set up a US$1 billion industrial park on 3,200 ha in Nghe An province.

The report stated that, in addition to being the engine of industrial infrastructure development, FDI also contributes to the growth of other segments in the real estate market. Both office and hotel areas show high demand, with increased rental space and stable rental performance.

Savills Vietnam stated that while these segments are becoming increasingly attractive, active assets are getting more attention from investors, with the exception of new projects in prime locations in the centre of Ho Chi Minh City and Hanoi. However, with limited supply, the market is witnessing an increase in the value of real estate projects in all segments.

Japanese investors are active in the market. Nishi Nippon and Hankyu cooperate with Nam Long to build a 26 ha Mizuki Park residential project in Binh Chanh district, Ho Chi Minh City, with total investment reaching up to US$351 million.

In addition, famous Japanese retailer Aeon Mall officially cooperated with BIM Group to develop the second shopping centre of Aeon in Hanoi with an area of 16.7 ha, at an estimated total capital of US$200 million. Son Kim Land has also successfully called for US$100 million in project development from Japanese investors.

Dr. Su Ngoc Khuong, Director of the Investment Department under Savills Vietnam, stated that M&A continues to be a form that the majority of investors will use to enter the Vietnamese market.

This continues to be an essential trend as the market becomes more mature and investors will have to show their skills and experience to gain opportunities for cooperation to participate in projects that display value and potential.

(Source: Nhandan.com.vn)


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