Hi Guys,

Foreign investors bullish on Vietnam?s real estate market

An improved investment climate, continued growth, and interest from overseas Vietnamese have alerted foreign investors who are buying into Vietnam?s real estate market like never before.

Unlike their local investors, brooding over the stagnant housing market since last year, foreign investors remain expectant about the market with several foreign-invested projects worth hundreds of million dollars being implemented or licensed in the country.

Zooming demand has been forecast for all kinds of work space and housing, especially office high-rises and luxury apartment buildings.

?You can get a sense of how strong housing demand is by judging the heavy sales at luxury apartment buildings, such as Phu My Hung, Manor or Caltavil in Ho Chi Minh City,? said the owner of a project in the southern hub?s outlying Thu Duc district.

Auspicious factors

A survey by US real estate financing and management specialist CB Richard Ellis (CBRE) last year forecast an influx of multinational corporations, particularly banking and insurance groups.

There thus exists an enormous demand for office construction or upgrade among the companies, as well as residence for their huge staff.

Besides, the local investment environment has seen encouraging improvements in recent years, investors said.

Foreign banking and insurance groups can be actively involved in the market place, operating their own projects instead of just as partners for local companies, and trade in the housing sector based on the Land Law issued in 2003.

Meanwhile, Tran Vu Anh, head of the Investment Department of the Vina Capital, an entirely foreign invested fund that has implemented several housing projects in Vietnam, said expatriate Vietnamese?s keen interest in properties trading has also fueled the robust growth.

?Their investment capacity and purchasing demand are remarkable, with overseas remittances last year alone topping US$3.5 billion,? Anh said further.

He added Vietnam currently has only 300,000 square meters of commercial high-rises, compared to 5 million square meters in the Philippines, presenting an irresistible allure to both foreign and local investors.

Investment influx

Apart from $20 million in estate investment last year, Vina Capital is setting up Vina Land, a fund focusing on Vietnam?s realty market. The fund is expected to draw some $50 million from Japanese, Malaysian, Singaporean and European investors, Anh said.

Vina Land will also be listed in the London stock market to lure investors there.

Indochina Capital, another leading investment firm operating in the Southeast Asian region, also plans a $100 million fund to tap into Vietnam?s properties market.

Korea?s LG Engineering and Construction Corp. is also underway in their new 360ha residential area in Nha Be district on HCMC?s outskirts, with its cost estimated at $300 million.

Also, another group of Korean investors recently earned a license for their 207ha, $314 million Tay Ho Tay residential quarter in Hanoi.

Many investors from Korea, Japan and Taiwan are also eyeing the local real estate market, CBRE survey also found.

Anh, however, said most investors are financial groups, with only few being professional estate traders so far.

But the vibrant market will attract more professional traders the world over in the future, he added.

Regards!!

Anybody considering investment in Vietnam should read this article in the Asia Times from 2006. Asia Times Online :: Southeast Asia news - Vietnam's property market boils over

CB Ellis will report that it is an excellent market in which to invest because they are practically the only agents selling it and have exclusive contracts with the majority of developments to prevent any other agent selling there.

If the market was overpriced two years ago, you can bl**dy well be certain that it is now!

Happy hunting!

Andy