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Time for property investors ‘to return’
Interview with Le Tan, Managing Director of Vietnam Top Property Opportunities (vnTPO), an annual real estate conference held October 20-22 this year.
How will vnTPO 2009 differ from last year’s conference?
Le Tan: In this our second running of the international event, we want to maximize the value that the 700 participants will get out of it. The focus last year was tourism-related development but this year we will cover almost every aspect of real estate investment.
We’ll be covering everything from residential, commercial and industrial property to ports, bridges and other urban and rural infrastructure. This is being done at the behest of the Vietnamese and foreign participants who are looking for an overview of Vietnam’s real estate and infrastructure, and a deeper appreciation of the associated government policies.
Another difference will be the ample opportunities for dialogue so that potential and existing investors can get satisfactory responses from representatives of the ministries of Construction, Industry and Trade, and Culture, Sports and Tourism. These government officials will elaborate on such matters as the government’s taxation policies, and will present national and provincial plans for residential, industrial and commercial zoning and development.
One specific item of interest for prospective foreign investors that we will be addressing is the casino business. Vietnam has several casinos, one of them dating back quite a few years, but they are only pilots; their existence is on a pilot basis. What foreigners want to know is the bottom line as far as Vietnam is concerned, so this issue will be on the agenda and will be addressed by government officials at the event. For the benefit of the Vietnamese government, one or two presentations will cover the way other countries handle casinos, and the business models they use.
Will foreign investors be interested in the development projects in need of outside capital that vnTPO 2009 will present?
Yes, I think they will. Many big property projects involving Vietnamese companies and provincial governments will be introduced, for example a US$3.4 billion resort and hotels in Phu Yen Province, and residential and commercial developments in Bien
Hoa, Dong Nai Province. Unlike last year, when the focus was on high-end housing, the residential projects that we will advertise this time around are for the broader middle class.
Several provinces will be pitching projects to build housing for the mass market. Ninh Thuan Province, for one, hopes to arouse foreign interest in its overall development. Interestingly, Ninh Thuan was the first Vietnamese province to hire foreign consultants to advise on its tourism and industrial development plans. And another thing, the Vietnamese government is considering Ninh Thuan as a possible center of nuclear power generation in the future.
Can Tho in the Mekong Delta, one the other hand, is looking for outside investment to build eco-resorts and health resorts on the city’s river islands, more of a niche market really.
The recession had quite an impact on Vietnamese real estate. Do you think it’s time for investors to get back in? Does the market have potential?
Like other real estate markets in the world, Vietnam’s was unable to avoid the recession. Many businesses in the industry shut down as they could not survive the heavy losses. However, we think now is the time for investors to return as Vietnam holds several advantages over other countries in the region. To mention three, Thailand is experiencing political problems while Malaysia and Singapore are already well developed as far as real estate is concerned, so they don’t have the potential for growth we see in Vietnam.
Our real estate market is not homogeneous by any means. The office sector is just as quiet as a year ago, and commercial properties like supermarkets and shopping centers are barely moving as Vietnamese people have less discretionary income these days, which might partly explain the slow pace of development in this respect. Still, we think these sectors will pick up sooner or later. In stark contrast, the residential business is on a tear thanks to the Vietnamese people’s growing demand for new houses and apartments.
Our government definitely intends to develop the nation’s infrastructure and residential, industrial and commercial fundamentals, and there are foreign experts who see more opportunities in Vietnam than elsewhere.
Some people reckon that the recent income tax changes are detrimental to developers and therefore the industry in general. What’s your view?
Real estate businesses are worried about the new income tax policy and there are conflicts between them and state agencies. They disagree with the state’s tax assessments and say it is unclear whether the tax on property deals should be 2 or 25 percent. There are other changes in the government’s policies for the property market too. In our view, they are an improvement and have created a more amenable environment for both Vietnamese and foreign investors.
What benefits will vnTPO 2009 yield? How will it help investors and the Vietnamese government?
Prospective investors in Vietnamese real estate must take the time to study the situation and be prepared to spend money to gain a proper understanding, but they can also find most of what they need to know by coming to vnTPO. Our job is to help them, especially if they come from abroad, to understand every aspect of the market and introduce them to government officials and Vietnamese land developers. Basically, we deliver the full package.
Through vnTPO, the Vietnamese government will improve the investment climate to entice more capital from abroad. And it will give the nation’s cities and provinces, even the remotest ones opportunities they might otherwise not have.
We will be holding the event every year and supporting the participants from the start. Our hope is to draw many investors to Vietnam’s abundant opportunities and make sure they have help with all the procedures for starting their projects in Vietnam, right down to the local level.
Vinh Son
thanhnien
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