Sunday, July 10, 2016

The rising of Vietnam economy - 中国终将直面一个东盟最强的越南


在美利坚两百多年的历史记忆之中,大概没有一场对外战争可以像越南战争那样强烈、持久、深入触及到灵魂,甚至包括将其推上权力巅峰的两次世界大战。
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Monday, June 6, 2016

In only 15 years, Hanoi will be the mega-cities, comparable to the financial centers Hong Kong


In only 15 years, Hanoi will be the mega-cities, comparable to the financial centers Hong Kong

 "Hanoi strong, country will be strong", the Minister of Planning and Investment Nguyen Chi Dung said in Hanoi events of 2016 - Cooperation and Development of investment takes place 4/6 morning.
According to the Minister Dung, Hanoi after 2030 sets a target to become a super city (mega city).

With the rapid pace of urbanization and the increasing population, in less than 20 years, Hanoi will achieve a super-city scale. Hanoi will build satellite cities from model center to border, reduce population pressure and congestion in the downtown area.
 
The development with city 5 satellite cities will open to investors in the field of infrastructure, transportation and real estate. Besides, Hanoi may consider developing 5 satellite cities as City of Science, City Finance, Services..., connected through the downtown area, which complement, support mutual development assistance.
 
Second suggestion of the Minister Dung of Hanoi must become green and innovative urban. Must determine orientation green growth for the city, promote creativity in all fields, particularly in science, management, development of R & D (research and development), business incubators.
 
"There is such, Hanoi to catch up the general trend of the world, catch up knowledge economy", Minister Dung said.
 
Third, Hanoi deserves to be at the heart of the country in many ways. Hanoi is the city must take the lead to implement the policy of the Party and the State, in the first 19 and 35 of Resolution of the Government on administrative reform and investment.
 
"Finance is the blood flow to the enterprise, economic, Hanoi is the heart, the blood supply to enterprises in Hanoi, for the whole country. This center to develop comparable financial center of Hong Kong, Singapore, "Dung expectations.
 
Fourth, Hanoi must develop to become a city of peace and friendliness. City of Peace is a prerequisite for sustainable development, which is the first factor for investors to determine the long-term laid the foundation of investment in the country.
About the friendliness, look beyond, to develop friendly culture of Hanoi. How to help businesses operating in the city can feel at home, working in his city. This is an important factor to attract investors.
 
According to Chairman of Hanoi People's Committee Nguyen Duc Chung, Hanoi expects 2020 will be 200,000 more businesses are established and operate . Plus 180,000 existing businesses, Hanoi will contribute more than 1/3 to 1 million target by 2020 now that Prime Minister Nguyen Xuan Phuc proposed.


Hanoi strong, country will be strong. The goal of Hanoi after 2030 will be a super city. The capital will be a financial center like Singapore, Hong Kong's financial center. Hanoi is a special city, the center of the country in all aspects, including politics, economy, culture, education, and also the economic hub superlative trading. Hanoi is also the place of headquarters or branches of corporations, large enterprises, financial institutions and international organizations.

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Wednesday, May 18, 2016

Private developers lead way in Vietnam

Private developers lead way in VN

Seven in 10 of the most prestigious property developers in Việt Nam are private enterprises, with the top three being property developers with headquarters in Hà Nội, the Vietnam Report has announced.

According to the report carried out by the Vietnam Report Joint Stock Company from February 2015 to February 2016, the top 10 prestigious property developers were Vingroup Joint Stock Company, FLC Group Joint Stock Company, Hòa Phát Group JSC, Viglacera Corporation, Novaland Group, Hà Đô Group, Urban Infrastructure Development Investment Corporation, Him Lam Corporation, Hòa Bình Company Limited, and Phú Mỹ Hưng Development Corporation.
The report also listed the top five prestigious real estate consulting and brokerage firms in 2016, led by well-known brokerage Đất Xanh Real Estate Service and Construction JSC.
Following Vingroup on the list were Sài Gòn Thương Tín Real Estate Joint Stock Company and two FDI consulting companies CBRE Vietnam, and Savills Vietnam.
Hải Phát Investment JSC is the only Hà Nội – based company on the list.
Vietnam Report also announced polling results of property enterprises on business prospects in 2016.
All respondents said that 2016 revenue would be higher than 2015. Eighty-three percent expected revenue to increase sharply in 2016, and the remaining 17 percent only a little.
The Vietnam Report is an independent research report, developed based on scientific and objective principles. Companies are evaluated and ranked based on criteria of finance and media reliability.
Data on project numbers, progress, the rate of successful transactions, price of sales, and others, were used as complementary elements.
“Companies named on the lists all have stable financial capability, have development and business experience, and have made great contributions to general development of the entire Việt Nam’s real estate sector,” the report said.

Kevin Vu - Kevinvuproperty.com
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Fears of a property bubble unfounded

Fears of a property bubble unfounded

Property-oriented credit jumped 26 per cent last year, triggering concerns from the State Bank, which is considering putting the brakes on credit growth. Dr. Le Xuan Nghia, former deputy chairman of the National Financial Supervisory Commission and head of the Business Development Institute, explains why it might not be a smart move to tighten credit flow into the real estate sector.
The massive rush by banks to finance property has worried the State Bank of Vietnam (SBV), which recently issued a warning about avoiding another real estate credit tragedy. What’s behind this concern?
To put the market, property investors, and people’s minds at ease, policy-makers should not look at different phenomena separately, but should take a more holistic view and see events in their proper context.
Since 2005, the real estate market has undergone two upsurges (2005-2007 and 2015-2016), which took place in different circumstances.
The following factors therefore should be taken into account:
First, from 2005-2007, the real estate market rallied and grew robustly as Vietnam was on the threshold of joining the World Trade Organization. At that time, domestic and foreign investors were overly optimistic about Vietnam’s prospects, leading to booming investment growth in trade, tourism, and also in the real estate market.
Similarly, in 2015, the property market rebound came after Vietnam signed a raft of free trade agreements (FTAs). Foreign investors’ sentiment, however, has remained at a moderate level. They are proceeding to invest here with more caution, as their understanding of Vietnam has markedly improved.
Second, credit grew rapidly (at above 30 per cent) from 2005-2007, whereas in 2015 it expanded moderately, at 15-17 per cent, within the limit suggested by the International Monetary Fund.
Third, in between 2005-2007 Vietnam witnessed its first wave of foreign direct investment (FDI), with a sharp (but unsustainable) growth in capital volumes. FDI volume rose phenomenally (setting an $80 billion record), but disbursed volume was a mere $8-9 billion on account of poor infrastructure conditions and economic institution complexity.
Meanwhile, the period starting in 2015 is seeing a second wave of FDI in Vietnam, but this FDI is more sustainable, as there is not much difference between committed and disbursed FDI volumes.
Fourth, inflation was deemed as “explosive” during 2005-2007, and in fact did explode in 2008, setting off a crisis in the macro-economy. Currently, inflation remains at a low level and is well under control. The macro-economy is stable, with long-term growth expected.
Fifth, bank interest rose sharply during the 2005-2007 period, undermining firms’ investment and business efficiency in addition to increasing costs. The market was driven by speculation. Currently, bank interest is fairly stable, which ensures effective business operations and investment. Interest may increase, but only moderately.
Sixth, from 2005-2007 there was a boom in market demand, particularly in the real estate sector, whereas presently the demand is feeble and is rebounding slowly.
Seventh, the first wave of urbanisation took place from 2005-2007 in the backdrop of a backward and unstable infrastructure system, whereas the current ongoing second wave of urbanisation benefits from better and more sustainable infrastructure, with millions of labourers moving from rural areas to big cities, and tens of thousands of foreigners expected to come to Vietnam following the enforcement of the Trans-Pacific Partnership (TPP) agreement.
Eighth, the 2005-2007 pperiod was the tail end of a long-term development cycle that began in the aftermath of a regional financial downturn (1997-1998), whereas the current period is the first stage of a long-term development cycle in the wake of a global economic slump.
The current property market revival may have a more stable footing, but the market’s reliance on credit is common to both development periods. Does this signify a high level of risk?
Vietnam is not unique in this case. The real estate market is largely reliant on bank capital in many countries all across the globe, for both house builders and home buyers.
In the US, for instance, trade and industrial groups don’t rely as heavily on credit from banks, whereas real estate groups source most of their capital from bank loans. It is because the real estate business requires enormous capital volumes and also because real estate firms are rarely listed on stock exchanges. American citizens almost always use bank loans to buy houses, and use their own money to invest elsewhere for higher profits.
The SBV intends to amend their Circular 36/2014/TT-NHNN to reduce the ratio of short-term funds used for providing medium- and long-term loans, and raise the risk-weight ratio of loans granted to finance the real estate and securities sectors from 150 per cent to 250 per cent. Is this possibly a hasty move?
To deliver a warning to banks and the market, the risk-weight ratio can be scaled up to 200 per cent. The 250 per cent ratio would be the highest worldwide. There would be no more room for adjustment in a later period.
In my view, tightening the credit flow at this point is somewhat hasty, as the market needs a more lasting policy framework. To support the economy and the property market rebound, monetary polices should be moderately loosened, coupled with a strategic vision to stabilise the interest rate as well as setting forth solid plans to manage the exchange rate.
Tightening credit could push up the interest rate. Once the interest rate goes up, all of our efforts to recover businesses’ health, grow the economy, and restructure the banking system might fail.
Residents and developers alike are worried that the real estate market might drop if the SBV decides to tighten credit flow. What will the market do in this scenario?
Policies must be based on careful calculations to avoid hurting the market. We have developed a predictive model for real estate market developments. The model shows that if the TPP impacts are taken into account, supply and demand in the property market would balance by 2018 (at present, supply exceeds demand), and demand should outstrip supply from 2019 onwards.
On account of the TPP, about 2.5-3 million people in rural areas will move to cities, and tens of thousands of foreign employees will come to Vietnam to find jobs, leading to a jump in housing demand across all market segments.
After 2019, supply may decrease against rising demand because of increasingly depleted land resources coupled with investors’ finite financial capacity. Several months ago, we predicted rapid growth in the real estate market by 2023. Our most recent estimates, however, show that this growth momentum may arrive sooner, possibly starting in 2021. In addition, if the market is in the doldrums, it could be extremely difficult for us to tackle bad debts.

Kevin Vu - Kevinvuproperty.com
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Vinhomes Golden River launched to the market

Vinhomes Golden River launched to the market

Savills Vietnam and Vinhomes on April 12 introduce its latest project - Vinhomes Golden River to the market.
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Sunday, March 27, 2016

10 biggest real estate transactions in Vietnam in 2015

10 biggest real estate transactions in Vietnam in 2015

VietNamNet Bridge – In 2015 major real estate firms in Vietnam sought and conducted many large affairs to acquire "golden land" in the center of big cities.
The real estate market in 2015 showed many positive signs. The number of transactions increased in many segments, while the price was relatively stable. According to statistics of 60 real estate enterprises listed on the stock market of Vietnam, total sales in 2015 grew 13%, reaching more than VND37,400 billion.
2015 is also the year of large acquisitions on the estate market.

1. Lotte acquired Diamond Plaza

10 biggest real estate transactions in Vietnam in 2015, vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news
South Korea’s Lotte Group has replaced Posco as the foreign investor in a joint venture which owns and operates the Diamond Plaza, a commercial, office and apartment complex in downtown HCM City.
Lotte has joined the management of the Diamond Plaza after acquiring 70% of the project. However, the amount of money the group had spent on the deal was not revealed.
The Diamond Plaza was inaugurated in August 2000 with 22 floors, including two basements. The building, which overlooks the landmark Notre Dame Cathedral in HCMC’s District 1 and had an initial investment of some US$60 million, was the joint venture between Construction Corporation No. 1 (CC1) and Posco Engineering & Construction Co. (Posec) under Posco Group.
The Diamond Plaza deal is yet another move of Lotte to deepen its involvement in Vietnam’s real estate market, particularly the commercial property segment, via mergers and acquisitions (M&A).
In 2013 Lotte bought a 70% stake of Japan’s Kotobuki at the Legend Hotel Saigon and the remaining 30% is now held by Hai Thanh Company, according to foreign property service providers. The five-star hotel was renamed as Lotte Legend Saigon in April last year and is now under the management of the hotels and resorts arm of Lotte.
The investment amount of Lotte in the 283-room hotel on Ton Duc Thang Street in HCMC’s District 1 remains unknown.
The group is expanding its presence in supermarkets and other areas as well. Retailer LotteMart has opened a commercial center in the Pico Plaza building in HCMC’s Tan Binh District. Earlier, a Pico shopping center in Hanoi was turned into a Lotte property.
At present, Lotte is proceeding with a US$2-billion property complex in District 2, HCMC. The Korean group will cooperate with Japanese investors to develop the Eco Smart City project in Thu Thiem New Urban Area.  
The group has invested billions of U.S. dollars in projects in hotel, food, supermarket, cinema, construction and home shopping sectors in Vietnam.

2. Sacomreal and Thanh Thanh Cong transfers Celadon City for Gamuda Land


10 biggest real estate transactions in Vietnam in 2015, vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news

The Saigon Thuong Tin Real Estate JSC (Sacomreal) and the Thanh Thanh Cong JSC (TTC) have transferred Celadon City to Gamuda Land Vietnam for an estimated VND1.4 trillion ($64.1 million).
On an area of 82 ha, Celadon City is located in Son Ky ward in Ho Chi Minh City’s Tan Phu district. With estimated original investment of VND24.8 trillion ($1.1 billion), the project, which kicked off in 2010, comprises a cultural and entertainment center, education facilities, commercial areas, and sports areas.
Gamuda Land, a division of Malaysian property developer Gamuda Berhad, has many large-scale projects in Hanoi, including the 500 ha Gamuda City and the 323 ha Yen So project.

3. Vingroup acquires 32ha Me Tri project


10 biggest real estate transactions in Vietnam in 2015, vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news
Vingroup, one of the country's largest private businesses, has bought more than 67.1 percent stake in the Hanoi-based Me Tri Sport and Entertainment Development Co., Ltd. for nearly VND560.2 billion (US$24.87 million).
Vingroup’s acquisition of the controlling stake in Me Tri Sport and Entertainment Development Co., Ltd. is its latest effort to expand its business activities in Vietnam, following different acquisitions in retail and health sectors.
In 2007, Me Tri was assigned with 32.1 hectares of land in the city's center to build a $15-million sports and entertainment complex.
However, in 2010, Hanoi's authorities changed the land's designated purposes to only allow non-commercial projects, effectively canceling the original plan.

4. Japanese corporations invest in Nam Long’s Flora Anh Dao project

10 biggest real estate transactions in Vietnam in 2015, vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news
Japanese companies Hankyu Realty and Nishi-Nippon Railroad have decided to invest into an affordable apartment project developed by the Ho Chi Minh City-listed Nam Long Investment Company (HOSE: NLG).
The Flora Anh Dao is Nam Long’s first Flora branded-product targeted at middle and upper class earners. The total investment for the project is estimated at VND500 billion ($23.8 million).
Apart from contributing investment, the Japanese companies will also share their ample development experience, as well as providing products based on a 3G concept: gettable, green and greater.
Nam Long chairman Nguyen Xuan Quang said that Flora was an upscale brand of the company’s existing EHome concept which leads the affordable housing segment in Vietnam.
Quang also said that the Flora product would provide profits of 12 to 15 per cent and account for about 15 per cent of Nam Long’s total turnover in 2015.
Located at Nam Long – Phuoc Long B residential area in District 9, Flora Anh Dao has good transport links.
Set for completion in 2016, the 16-floor Flora Anh Dao block will offer 500 units, a Japanese-style garden, community club, children's playground and other amenities. Ranging from 54 to 67 square metres, Flora Anh Dao apartments will cost around VND18.9 million ($900) per square metre.
Nam Long is one of the pioneering township developers in Vietnam. With 23 years of development experience, it is well-known for projects in Ho Chi Minh City, Binh Duong, Can Tho, Long An, Ba Ria-Vung Tau, and Dong Nai, currently holding 572 hectares of land for development.
Having supplied more than 3,300 units since 2008, Nam Long’s EHome brand is known in Vietnam for its affordable flats.
The company intends to develop 6,000 Flora apartments in the next three to five years in Ho Chi Minh City and is keen to acquire suitable land plots to develop this product.

5. Indochina Land transfers four projects for Gaw Capital Partners

10 biggest real estate transactions in Vietnam in 2015, vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news
Indochina Land on June 2 announced it has transferred four property projects in Vietnam to Gaw Capital Partners, a real estate fund manager head-quartered in Hong Kong.
Indochina Land said one of its investment fund, Indochina Land Holdings 2 (ILH2), pulled out of Indochina Plaza Hanoi in Hanoi City, Hyatt Regency Danang in Danang City, one project in Quang Nam Province and one in HCMC. They are among a dozen projects that ILH2 has invested in.
Indochina Plaza Hanoi located on Xuan Thuy Street of Cau Giay District has one 16-storey office building and two apartment buildings with 32 and 36 floors. Meanwhile, Hyatt Regency Danang is a resort nearby the Danang beach and comprises of a five-star hotel, 174 apartments and 27 villas.
The two projects were completed and put into operation.

6. Van Phu Invest invests in 1.5 hectares of "diamond land" at 138B Giang Vo

10 biggest real estate transactions in Vietnam in 2015, vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news
Hanoi-based real estate investment company Van Phu Invest has purchased a prime land on Giang Vo street, Hanoi, for VND643.8 billion ($29.67 million).
The land is currently the campus of the Hanoi School of Public Health, with a total area of 15,600 square metres. As the Ministry of Health has decided to re-locate the college to another district, the land is being sold in exchange for Van Phu’s investment in the new facility, which is estimated at VND643.8 billion.
Van Phu Invest is expected to hand over the new facility next year. Meanwhile, on the company website, Van Phu Invest has added a new project called the “Giang Vo Complex”, but no information about the development has been updated.
Van Phu Invest is one of the five realty firms that recently bid for the Hoa Binh Tower on Hoang Quoc Viet street, Hanoi. However, the bid was won by An Cu Co Ltd, which paid VND735 billion for the development.

7. Khang Dien House acquires Binh Chanh Construction JSC

10 biggest real estate transactions in Vietnam in 2015, vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news
Ho Chi Minh City-based Khang Dien Housing JSC in late November decided to pay nearly VND800 billion ($38 million) purchase an additional of 32 million shares of the Binh Chanh Construction Investment Shareholding Company (BCI) to raise its ownership rate to 57.3 percent.
The current holding of Khang Dien in Binh Chanh is 20.4 percent equity stake, which translates into 17.7 million shares, making it the largest investor in the company.
Besides owning several realty projects in southern Vietnam, Binh Chanh revealed that it has expanded into infrastructure construction projects under the BOT model. Additionally, the company planned to partner with Cavi Retail Limited to enlarge the presence of the French supermarket chain Big C.

8. Hoanh Son cooperates with Gold Star Rubber Corporation to develop golden land at 231 Nguyen Trai

10 biggest real estate transactions in Vietnam in 2015, vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news
After Hanoi decided to move polluting establishments and factories out of the urban center, the 6.2 hectare plot of land at 231 Nguyen Trai Road of the Gold Star Rubber Corporation was eyed by many real estate firms.
It was predicted that the Gold Star Rubber Corporation would transfer the land or cooperate with a large corporation like Vingroup, FLC Group, T&T, or BRG to develop an estate project on that plot. However, in November 2015, this firm signed a contract with Hoanh Son JSC to build a housing and commercial centre project.
Accordingly, the two sides will set up the Gold Star – Hoanh Son JSC with expected charter capital of VND1,673 billion ($83 million).
Hoanh Son JSC’s Chairman is Mr. Pham Hoanh Son, who was born in 1972 in the central province of Ha Tinh. This businessman is not very popular in Vietnam although his firm has carried out many large projects in the central region.

9. Song Da Thang Long transfers part of Usilk City to Hai Phat Thu Do

10 biggest real estate transactions in Vietnam in 2015, vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news
Song Da Thang Long has just transferred the CT2-105 building in Van Khe new urban area (Usilk City) to Hai Phat Thu Do Joint Stock Company. CT2-105 is a block with 50 floors and two basements, providing 752 apartments.
According to initial information, Hai Phat Thu Do has acquired this building for VND50 billion (nearly $2.5 million). This block is part of the Usilk City project developed by Song Da Thang Long JSC, a relatively large apartment complex in Ha Dong district, Hanoi.
Usilk City features 13 buildings from 25 to 50 floors, satisfying the demands of more than 10,000 households. With three connected ground retails over 13 buildings, the project is expected to be an ideal shopping destination in the near future. Also, Usilk City offers two spacious basements over 1 km of Le Van Luong Street, which will provide sufficient parking spaces for both residents and customers.
Usilk City is only 4km from the Trung Hoa – Nhan Chinh urban area. It lies at the intersection of some of the capital’s main roads, including Le Van Luong, Le Trong Tan, Street 72, Thang Long Avenue, Zone 4, etc.

10. SCIC divests from Kim Lien Hotel

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Based on the Vietnamese State’s policy of withdrawing capital from unnecessary fields, in November 2015 the State Capital Investment Corporation (SCIC) announced an auction of a lot of 3.6 million shares of Kim Lien Tourism JSC, the owner of Kim Lien Hotel. The starting price was set at VND30,600 per share, equivalent to VND112 billion ($5 million) in total.
Kim Lien Hotel is located on an area of 3.5 hectares, which is considered the "golden land" in the heart of Hanoi. The auction attracted many giant organizations and individuals. The winner had to spend more than VND1,000 billion, nine times more than the offering, to acquire the shares.

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Monday, March 21, 2016

Resort sales follow realty resurgence

Resort sales follow realty resurgence

Supported by stable economic growth and the upturn of the market, Vietnam’s resort and hospitality segment is expected to see a surge in investment capital this year.


High-end beachfront property sales will likely continue to swell nationwide in 2016 thanks to the increased demand
and the recent recovery of the real estate market   Photo: Le Toan

Segment upswing

According to Nguyen Tran Nam, chairman of the Vietnam Real Estate Association, 2015 saw the local economy stabilise, with an increase in local income. This led to a rise in the demand of the property sector generally, and a marked climb in demand for resort realty.
Duong Dung, director of Research and Consulting for CBRE Vietnam, commented that in 2016 resort development would reach fever pitch.
The basis for this statement lies in the recovery of the residential, retail, and office-for-lease segments of the real estate market in 2014 and its continuation into 2015.
“The resort segment will follow the trend of recovery of those other segments within the next six to 12 months,” Dung told a seminar themed “Resort Property 2016 – Potential and Challenges” organised early this month in Ho Chi Minh City.
Optimism vis-à-vis the resort segment is also attributed to the skyrocketing of tourist numbers to beachfront resorts such as the central cities of Nha Trang and Danang, and the southern island of Phu Quoc.
The latest figures from CBRE Vietnam show that the resort segment ascended sharply in 2015. In Danang, transactions increased 26-fold, from seven units sold in 2014 to 180 units in 2015. In Nha Trang, only 103 units were sold in 2014, compared to 481 units last year. The strongest ascent, however, was reported in Phu Quoc with nearly 850 units sold last year from zero in the previous year.

Great potential

Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, said that Vietnam had great potential in terms of resort development. “With recent regulations allowing foreigners to conduct real estate business in Vietnam, this segment will have added momentum to take off in the near future.”
Vo said, however, that a developer’s success in this segment would depend ultimately on their good brand name and professionalism. Additionally, developers must diversify the types of resort they build, so as to offer more options for new potential customers.
“Vietnamese developers should learn lessons from the development of resorts in other countries like Thailand, and adopt them here,” Vo said.
Peter Mach, vice chairman of Tanzanite International, the developer of The Hamptons in the southern city of Vung Tau, said that Vietnam had a particularly long holiday season. As such, it had vast potential for expanding resort and hotel accommodation. Besides, Vietnam lured about seven million foreign visitors per year with a great demand for resort products and high expenditure on tours. “These factors will spur the strong future development of the local resort market. We have no worries regarding a lack of demand for resorts,” Mach said.
According to Leong Boon Hoe, managing director of CBRE Singapore, Singaporean investors have recently set their sights on Vietnam’s vacation villas, as they are far cheaper than those in other countries.
For instance, a 300-square-metre villa in Sentosa Singapore is sold at between $12.6 million and $14 million, and a three-bedroom apartment is offered at between $500,000 and $840,000. Meanwhile, a similar villa at Sun Group’s Premier Village Phu Quoc Resort, in the Premier Village Danang Resort, or in Premier Residences Phu Quoc Emerald Bay was priced at between $1 million and $2 million; those at InterContinental Danang Sun Peninsula Resort between $3.8 million and $6.5 million; while a Sun Group apartment was offered at between $150,000 to $1 million.
Real estate broker and chairman of G5 Nguyen Quoc Khanh said that even high-end resort villas priced at $700,000 to $1.5 million were sold in their thousands in 2015.
“Buyers are paying attention to the potential gains from re-leasing their resort properties, and not so much as a second home, as was previously the case,” he said. The majority of projects are offering attractive rental yields at present, from 8 to 10 per cent per year.

From the south to the north

The local market has attracted many domestic buyers through the launch of many large-scale resort projects with synchronous infrastructure development and reasonable sales prices. In the south, Phu Quoc, Phan Thiet, Binh Thuan, and Vung Tau loom large on investors’ radar.
The Ho Chi Minh City beachfront villa market has heated up recently with the news that Vingroup received approval from the local people’s committee to become a strategic partner in implementing the 821-hectare Can Gio sea urban area.
During the past three years, a range of three- to five-star resorts have begun construction in the Ho Tram area of Vung Tau, including VietsoPetro, Ho Tram Beach Resort & Spa, Carmelina, Huong Phong-Ho Coc, Saigon-Binh Chau, Sanctuary, River Bay, Loc An, and Marine City. Vung Tau now has over 7,900 hotel and resort rooms, while the city welcomes around 16 million tourists per year.
Phu Quoc has undergone sweeping changes since a master plan for the development of the island was approved by the government in 2004, making it more attractive to tourists and investors from around the world. Major changes on the island include a road network that runs around and through Phu Quoc, the connection of the island with the national power grid, and the construction and upgrade of ports and airports, particularly the international airport.
Hefty investments from Vingroup and Sun Group, together with a long list of other major investors like LDG Group, CEO Group, and BIM Group have livened up the island’s investment environment. One of the island’s most iconic developments to date is Vingroup’s Vinpearl Phu Quoc resort complex on 300ha in Ganh Dau commune.
Sun Group is speeding up work on large resorts like J.W. Marriott, Premier Village Phu Quoc, and Sebel Phu Quoc, along with a water sports complex on Hon Thom and a cable car connecting it with An Thoi town.
According to the Kien Giang Department of Planning and Investment, the southern province has licensed almost 200 investment projects with a combined registered capital sum of around $10 billion.
The central provinces, meanwhile, still boast the country’s most popular destinations. Graced with some of the most beautiful beaches in the world and located in close proximity to world-famous cultural relics such as Hue citadel, Hoi An ancient town, and the holy land of My Son, Danang has continued to attract millions of domestic and foreign tourists. Unsurprisingly, the resort and hospitality sector there continues to go from strength to strength. 
Nha Trang has also been luring many buyers for vacation properties in recent years, which has caused many apartment projects to increase their prices. Some outstanding projects include Costa, Cham Oasis, Stellar, and Muong Thanh. The heating up of the property market in this city has motivated investors to develop their apartment and villa projects by the end of this year, including in Phuc Khanh 1 urban area, Royal Marina, the Riviera, and Mipeco urban area.
Even though the northern provinces have no easily accessible beaches to speak of, developers are still pursuing the sale of resorts here. Syrena Vietnam Investment and Development JSC (Syrena Vietnam), the property development subsidiary under  BIM Group, recently launched its Green Bay Village and Lotus Residences  in the northeastern province of Quang Ninh’s Halong city. These projects have proven quite attractive to second-home buyers.
FLC Group, another real estate heavy hitter, opened its five-star FLC Vinh Thinh resort in the northern province of Vinh Phuc last week, becoming the province’s biggest luxury resort so far. The group also began work on the resort’s second phase of construction, covering 250ha, with the total investment of VND4.6 trillion ($286.4 million).

Kevin Vu - Kevinvuproperty.com

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Friday, March 18, 2016

Less risks won't harm property market: SBV

Less risks won't harm property market: SBV

The amendments to Circular No 36 are meant to urge commercial banks to strengthen the risk management of lending activities, rather than tighten the credit sources for the real estate sector, said Pham Huyen Anh, Deputy Chief Inspector of the State Bank of Viet Nam

In a draft document from the central bank circulated for public opinions, the risk index of receivable lending for real estate and securities would be raised from 150 per cent (the lowest level) as stipulated in Circular No 36 to 250 per cent.- Photo petrotimes.vn
He made the statement to reassure real estate insiders amidst fears that the new regulations would have negative impacts on the real estate market which has seen signs of recovery.
In a draft document from the central bank circulated for public opinions, the risk index of receivable lending for real estate and securities would be raised from 150 per cent (the lowest level) as stipulated in Circular No 36 to 250 per cent.
The maximum ratio of short- term funds used for medium and long term loans would be reduced from 60 per cent to 40 per cent.
Chairman of the Viet Nam Real Estate Association Nguyen Tran Nam said that since Circular No 36 had come into effect a year ago, the number of transactions in the housing market increased, proving that there was considerable demand for houses.
Outstanding loans in the housing sector were still under control, Nam added, and suggested that the circular be unchanged at the moment.
Pham Duc Toan, general director of the EZ Viet Nam Real Estate Development and Investment Company, said that the amendments would make it difficult for property investors and traders to get loans, which could increase house prices.

Good sentiments

Contrary to the opinions of real estate developers, the amendments received praise from experts and commercial banks.
Nguyen Thi Kim Thanh, member of the Board of Director of the Bank for Investment and Development of Viet Nam (BIDV) and former head of the SBV's Monetary Policy Department, said that the new policy was an indirect method that the SBV could apply to prevent a bubble in the real estate market.
"I think that the market now is over supplied as too many projects are underway while people who have real demand for a house can not afford one due to their low income.
"Housing enterprises must find ways to adapt themselves to new economic and policy conditions," Thanh said.
HSBC Viet Nam General Director Pham Hong Hai said to Thoi bao Kinh te Viet Nam (Vietnam Economic Times) that this was a signal to housing enterprises that they should be more cautious.
"The change in risk index of receivable lending for real estate (250 per cent) is suitable, because a large amount of capital has been poured in the real estate sector."
Enterprises should look at both the supply and demand sides of the market to ensure efficient performance, Hai added.

Good decision

Chau Dinh Linh, a lecturer at the Banking University of HCM City, said that implementing the amendments would be a good decision.
"The new regulations would help not only prevent risks from the property market but also redirect the capital flow in the financial market. We have relied too much on the monetary market as a capital supplying channel while the capital market including bonds and securities is underdeveloped.
"The country's economic development does not depend only on the real estate sector, but on the real production and consumption," Linh said.
"If real estate developers want to have sustainable businesses, they should not count on short-term capital sources to do medium- and long-term investment projects," he added.
Anh said that the amendments were drafted to ensure the banking system's health. If the banking system was not exposed to excessive risks, then enterprises would find it easier to access loans, he explained.

Fire rekindled

According to Anh, monetary policy was not the only way to boost the real estate market's development. He said that the market had got out of the worst situation and real estate companies should not count on bank capital.
Banks have completed their role in "rekindling the fire" and it is necessary to have policies to lure capital from other sources such as foreign investment or remittances into this sector.
A long-term and stable property market needed the consistent implementation of many policies such as fiscal, tax and land.
The SBV official said that they had predicted the response of stakeholders when issuing the draft amendments. However, the SBV would do further research before a final decision and draw a roadmap for the market to have time to adapt, Anh stressed.

Kevin Vu - Kevinvuproperty.com

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