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Foreign investors now targeting middle class apartment projects
Trying every possible method to arrange capital for real estate projects in Vietnam, foreign investors have changed the way of approaching the market.
Nguyen Khanh Duy, Marketing Director of Vietnam City Garden Company, the owner of City Garden project in HCM City, said that foreign investors nowadays not try to obtain as many investment licenses as possible, but they more pay attention to the locations of the projects, the demand of the market and sale capability of the projects.
Some “well-known guys” in the real estate sector have decided to put off their projects in the Vietnamese real estate market to gather strength to develop the projects in their home markets. French EEM Group, for example, which owns the resort chains bearing the Victoria brand, have sold all of its five hotels in Vietnam to restructure its investment portfolio.
The same thing has also been done by JSM Indochina which has transferred Peninsula project.
Park Hee Hong, Business Development Director of South Korean Daewon Cantavil Company, which is holding 5 million square meters of houses in Vietnam, also said that the financial difficulties are the problems of not only the investors in Vietnam, but also of the investors in many other markets.
However, he has affirmed that Daewon will try to mobilize capital from different sources, from the parent group in South Korea, commercial banks and it will also use the profit of Daewon Cantavil to develop ongoing projects.
As for City Garden Company, besides the City Garden project and Sanctuary Ho Tram resort project, members of the company once committed to join forces to develop the projects in the central area of HCM City, including President Palace in district 1.
Another real estate project, located on an advantageous position, is reportedly nearly completed in terms of legal procedures. Sources say that besides Refico Company, Cube, the independent investment manager headquartered in the UK, which is managing the assets with the total value of one billion dollars, would also join the projects.
Some other big giants in the real estate sector, such as Keppel Land or Capital Land, have also expressed their high hopes on the Vietnamese market, together with China and India.
The 2010 annual report of Capital Land group also said that Vietnam is the newly emerging market for Capital Land. Young population, high economic growth rate and high urbanization speed all have been cited as the factors which makes Capital Land highly valuate Vietnam, even though Vietnam now is facing high inflation and monetary problems.
However, Yip Hoong Mun, Deputy General Director of Capital Land Vietnam, said that foreign investors should offer suitable products with high liquidity in real estate trade.
As for Capital Land Vietnam, besides the four high grade apartment projects in Hanoi and HCM City, it has been eyeing the middle class product market segment. The investor has kicked off three projects in districts 2, 9 and Binh Chanh in HCM City, aiming to provide 2200 apartments priced between 1.2 and 1.8 billion dong per each.
It is expected that by the end of 2011, Capital Land would put 940 apartments in district 2 on sale.
Prior to that, the changes in the product strategy to make foreign investors get adapted to the Vietnamese market were announced by Indochina Capital, an investment fund management company in Vietnam in early 2011. Indochina Capital announced the investment in the middle class house project Saigon South Residences, which comprises of 1200 apartments.
Sources say Daewon Cantavil has also expressed its intention to “join the games.”
Park from Daewon Cantavil has revealed that the real estate developer is planning to develop middle class apartments in other cities, including in Da Nang City in the central region.
vietnamnew, TBKTVN
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