Foreign investments slide into Vietnam’s property market

30 Nov
VNREForeign realty groups and asset managers are pouring into the national property market.
After hitting $23.6 billion in registered investment capital in 2008, foreign direct investment (FDI) capital into Vietnam’s real estate sector started slowing down.

By the end of 2009, total FDI registered capital flowing into the sector was only $7.6 billion. In the first 10 months of 2010, the capital was only $2.7 billion.

The gradual decreasing of registered FDI capital mostly caused by the global financial crisis which occurred in 2008.

Market analysts however said the slow-down trend could be changed.

To underscore the trend Indochina Capital last week announced that it would put the newest private fund, Indochina Land Holding 3 (ILH 3) with $180.3 million of total capital commitments to rapidly invest on urban and suburban residences and mixed-use developments in Hanoi and Ho Chi Minh City.

Peter Ryder, Indochina Capital director, said: “Vietnam’s major urban centres continue to benefit from the country’s positive economic growth, compelling demographics and rapid urbanisation.”

“In the context of global real estate investment, Vietnam’s residential property market has demonstrated attractive domestic demand dynamics, supported by the country’s long term fundaments,” said Ryder.

Ryder said the company planned to raise two new investments, one in a $190 million project in Ho Chi Minh City, and the other in a project worth around $533 million in Hanoi.

The ILH 3 is Indochina Land’s third private, closed-ended Vietnam property fund and brings total funds under management to nearly $500 million.

Meanwhile, CapitaLand last week announced its new real estate subsidiary, CapitaLand Vietnam Investments Pte. Ltd, a $200 million joint venture to invest in residential developments in Ho Chi Minh City and Hanoi.

The joint venture’s partners are Mitsubishi Estate Asia – a wholly-owned subsidiary of Mitsubishi Estate Company Limited and an affiliate of GIC Real Estate, the real estate investment arm of Government of Singapore Investment Corporation.

CapitaLand (Vietnam) (CVI) will take up a 50 per cent stake in the joint venture, while the balance will be held in equal proportions by MEA and the affiliate of GIC Real Estate.

In another case, Malaysia-backed Gamuda Land has bought a 60 per cent stake in Sacomreal’s $293 million Celadon City in Ho Chi Minh City’s Tan Phu District.

Binh Thuan provincial people’s committee also issued an investment certificate to British West Indies-backed Birch Hill with its plan to develop the $475.8 million Birch Hill complex in Phan Thiet city.

Reported by Thuy Vu | VIR

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