Ho Chi Minh City to auction 15 prime land plots in Thu Thiem area

Ho Chi Minh City to auction 15 prime land plots in Thu Thiem area

     The planned Thu Thiem Urban Area in HCMC’s District 2 seen from above.

HCMC will auction 15 ‘golden’ land plots to attract large investors to develop the Thu Thiem New Urban Area and avoid state revenue losses.

Ho Chi Minh City Chairman Nguyen Thanh Phong Friday assigned the Management Board of Thu Thiem New Urban Area to map out 15 land plots located in Functional Areas No.3 and 4. These will serve as a basis to determine the starting price for auctioning.

The city authorities said they will also work with representatives of the Thu Thiem Church and the Thu Thiem Congregation of the Holy Cross in order to acquire land for the construction of a road along the Sai Gon River.

The authorities had earlier pledged to retain major parts of these two religious complexes that are over 100 years old, but said adjustments will be made to nearby areas to make them match with their zoning.

Thu Thiem New Urban Area is a 657 hectares (1,623 acres) megaproject to develop the city into an international financial hub, located on its namesake peninsula in the south-east of HCMC.

Function Area No.3, situated along the peninsula’s north bank, is planned to be a mixed residential and high-rise multi-functional commercial area, while Function Area No.4 is planned as a mixed area with residences, high-density multi-functional commercial complexes and local administration offices.

The latest decision on the auction was made after the Government Inspectorate in late June delivered its findings on a list of violations committed by city authorities on the allocation of state capital and the wrongful awarding of build-transfer (BT) contracts for the megaproject’s infrastructure projects.

It also suggested that the city auction off some land lots to prevent loss of state revenue and attract big investors for this megaproject.

The Thu Thiem New Urban Area, touted for the last two decades as the next central business district, was originally a densely populated but underdeveloped area in the last century.

Plans to develop the area were made in the 1990’s, and land acquisition began in 2002. An international design competition was held, and in 2003, a submission by U.S. design firm Sasaki Associates was selected.

Thu Thiem residents have filed complaints and lawsuits for years, citing violations of authorities, making the project mired in repeated delays.

(source: vnexpress)

July 29, 2019 / by / in
Read more 
Shared workspace business flourishes in downtown HCMC

HCMC welcomed over 4,000 square meters of co-working office space in the second quarter, concentrated in the central districts.

A co-working office in Ho Chi Minh City. Photo courtesy of Toong.

New co-working spaces were created mainly in five locations  – three clusters in District 1, the city’s business district, and two in Binh Thanh District, a short distance from District 1, according to real estate firm CBRE’s latest report.

Co-working space has been expanding at a rapid pace, and its occupancy rate averaged 80 percent in the second quarter, the CBRE report said.

By the end of June, there were 46,266 square meters of shared offices in HCMC, up 101 percent over the same period last year. This figure is projected to increase two-fold by the end of 2019.

Nguyen Hong Hai, CEO of office rental service Pax Sky, said co-working spaces are now popular because the supply of office space in HCMC’s central districts fails to meet demand of the rising number of entrepreneurs choosing to base themselves in the city.

According to the Global Research on Flexible Workspace report, the HCMC market is among the top five developing markets with a compound annual growth rate (CAGR) of over 80 percent per year.

A CBRE report last year showed that around 54 percent of co-working space users in Ho Chi Minh City were either founders or employees of start-ups, and approximately 14 percent were self-employed freelancers.

July 22, 2019 / by / in
Read more 
Luxury property concepts on the rise

Despite occupying a small proportion of the Vietnamese property market, the luxury residential segment is becoming more attractive to domestic and international buyers.

The biggest cities in Vietnam are now flush with multi-million dollar luxury apartments built with the latest high-end features

Luxury real estate in Vietnam is heating up, luring buyers in with so-called “sky mansions” at a fraction of what their cost would be in the likes of New York City or Hong Kong.

According to Bloomberg, Vietnam is experiencing a surge in luxury ­developments thanks to a booming economy and laws making it easier for foreign buyers to purchase property.

While still a developing country, the number of Vietnamese high-net-worth individuals (HNWI) has increased significantly over the last 10 years.

With a new supply of luxury high building properties being limited across the city, Bloomberg expects pricing in general to remain strong and units to be quickly absorbed for well-located projects.

According to List Sotheby’s International Realty in Singapore, currently one of the fastest-growing economies in the world, Vietnam’s growth has averaged more than 6 per cent annually over the past 20 years.

“The reality is that factories have also been relocating from southern China, helping GDP top seven per cent in 2018,” quoted a report from Sotheby’s.

“That hot economy is causing both foreign investors as well as local buyers to look into investing in the country’s real estate,” the report continued. “Investors see Vietnam in a place where Southern China was 10 to 15 years ago. While it may no longer be considered a sure bet considering home prices have been rising steadily over the past 18 months, many still feel that it has good value especially if one is able to hold the investment for a longer period.”

Sotheby’s took the example that prices for luxury condominiums in Ho Chi Minh City climbed 17 per cent in 2018 to an average of $5,518 per square metre, and is expected to climb nearly 10 per cent by early 2020 to $6,000 per sq.m.

Attractive for the wealthy

The amended housing law, which allows for foreign property ownership in Vietnam, has been facilitating cross-border demand for prime property from regional peer countries.

Thanks to this policy, since 2015 many higher-end projects have sold their quotas to foreigners with the majority of buyers coming from Taiwan, Hong Kong, and South Korea.

According to Matthew Powell, director of Savills Hanoi, international demand fuelled by the growth of high-net-worth individuals in Asian countries is expected to expand further.

“High total returns have drawn investors to Vietnam’s luxury residential market. As market returns increase with strong capital growth and healthy rental yield, more international developers and operators will enter the high-end segment in both Hanoi and Ho Chi Minh City,” said Powell.

These global players will bring along large capital flows and introduce new concepts of prime property to the Vietnamese residential market.

Branded residences for example, are an emerging model of luxury lifestyle products recently brought to Vietnam by international hotel groups. Brand association with a well-known hotel brand provides the development with benefits from the same qualities of that brand by association and design, thus offering an edge over non-branded luxury projects, Powell added.

Moreover, new luxury concepts are pushing high-end products higher but there remains a long way to go for Vietnamese prime property to reach international standards of luxury. The large gap between the average price of luxury products in Hanoi and Ho Chi Minh City and other peer cities also implies room for further upgrades.

Richard Peiser, professor of real estate development from Harvard School of Design, said that luxury residences in Vietnam are attractive both for profit and for places to stay when people visit.

“I believe Vietnam will become increasingly attractive to foreign investors as long as the country continues its above-average growth in GDP and maintains its welcoming approach to outsiders, especially those from the US. The more buildings that are marketed, the greater the interest as more people hear about the opportunity,” said Peiser.

Damian Sung, associate director of Asian Bankers Club told VIR that many investors from Hong Kong have been paying attention to Vietnamese properties.

“Based on stable economic growth and political status, Asia Bankers Club has been looking into Vietnam for quite some time now, but what really awakened interest was when the country loosened the rules on foreign real estate ownership,” Sung said.

The demand has not only come from overseas buyers, but from the wealthy Vietnamese community also.

Many Vietnamese have become richer through real estate trading, with some middle-class families now owning properties valued at more than $1 million.

Vietnamese US dollar millionaires

Proportion of high-end foreign developers in HCMC

Proportion of high-end foreign developers in Hanoi

Hotspots for premium projects

In Hanoi, many luxury and premium projects are located in the city centre and around West Lake, which offers the greenest living space in the whole city.

The Manor and Keangnam Landmark Tower in Hanoi are favoured by South Korean buyers, while Ecopark, Ciputra, Sunshine City, Eldorado, and Pacific Place are very popular among those of other nationalities.

Starlake City, a multimillion-dollar residential project invested in by Korea Daewoo featuring a community of luxurious villas and landed homes featuring a lake, international schools, and office towers, sold out in a matter of days.

Meanwhile in Ho Chi Minh City, Phu My Hung New Urban Area remains a popular destination for its advantages of being very well planned and boasting good infrastructure.

Some high-rise projects in Phu My Hung are now reserved especially for the South Korean and Japanese communities. Phu My Hung has a population of 30,000 people, of whom 40 per cent are foreigners, including buyers and leasers.

Some other outstanding projects include Vinhomes Golden River and Vinhomes Central Park, both invested by Vingroup, The Nassim by Hongkong Land, and Keppel Land’s Estella Heights.

Luxury real estate developers are upping their game with projects like Serenity Sky Villas, featuring penthouses asking for over VND60 billion ($2.6 million), with private elevators, designer lighting, furnishings, and each with its own swimming pool on the balcony.

Nearby, the premium tower of the Feliz en Vista residences – a 34-floor mix of garden villas, penthouse duplexes, and sky mansions – boasts 5-star facilities such as a VIP lounge, cigar bar, saltwater swimming pools, hot spring jacuzzis, outdoor movie theatres, and a treetop adventure walking bridge.

In addition to the major cities of Hanoi and Ho Chi Minh City, luxury real estate activity is rising in the coastal cities of Danang and Nha Trang, beach towns like Ho Tram, and on the island of Phu Quoc.

(source: vir)

July 22, 2019 / by / in
Read more 
Stable condotel profits preferred

Developers of ­condotels and second home properties are providing more options for buyers by offering alternative incentives rather than the vanilla profit commitment.

Developers are urged to strive for realistic profit outcomes in line with global trends, Photo: Le Toan

Nha Trang Bay JSC, the developer of the Arena Cam Ranh project in Khanh Hoa province, now offers two ­options to buyers: they can either operate their unit by themselves or they can authorise the developer to re-lease their units.

At Apec Mandala Wyndham Mui Ne, invested by IDJ and Apec Group, 12 per cent profit was committed to the buyers in the first five years of the project’s operation, plus 30 nights of use a year for buyers.

Meanwhile, the developer of Goldsand Hill Villa Mui Ne did not commit profit to buyers. Instead, it gives a ­variety of incentives when selling coastal villas. Buyers who have not received any profit commitment from the developer can operate the unit by themselves or authorise the developers, who take 20 per cent of the profit as commission.

In Phan Thiet city, newly launched projects such as Goldsand Hill Villa and NovaHill Mui Ne also opted for alternative incentives.

Buyers, meanwhile, are getting a better grip on the market and see a commission-based arrangement more favourable than a flat profit commitment.

According to Tran Khanh Quang, general director of Viet An Hoa Real Estate Investment JSC, in order to ensure the high profit committed to the buyers developers have to increase the property’s price, leading to artificial inflation of prices beyond their real value.

“Departing from profit commitments will help realign market values to the real value of properties. This will help avoid conflicts between developers and buyers,” Quang said.

This is a positive development in the market and will allow buyers to have more trust in developers, according to Nguyen Mai, a condotel buyer in Ba Ria-Vung Tau province.

During past years, to be able to successfully sell their condotels, many developers have made profit commitments of 10-15 per cent a year to buyers. While lauding the market’s potential, industry experts, however, are in doubt about these claims.

Michael Piro, COO of Indochina Capital, shared his views at a recent conference on second home property, saying that the 12 per cent profit commitment of some developers was “ridiculous” because the developers themselves could hardly make that profit. “No one in the world can release this percentage,” Piro said.

Instead of promising high profit, developers should pay more attention to project quality, the developer’s brand name and prestige, and creating transparency in property trading, Piro added.

According to Nguyen Viet Cuong, a real estate consultant in Nha Trang, the high profit commitment has been attracting buyers by the droves, but actually earning the profit remains a problem.

“Developers should not rely on high profit commitments to buyers, they should carefully consider how to create stable profit instead,” Cuong told VIR.

Kai Marcus Schröter, ­general director for Hospitality Tourism Management, said that he has not seen profit commitments of 10 per cent a year anywhere else in the world.

Schröter believes developers cannot commit such a profit rate because tourism has its high and low seasons, while occupancy and rental fees also cannot be stable.

Meanwhile, Adam Bury, senior vice president, Investment Sales Asia at JLL Hotels & Hospitality Group, said that the 10-15 per cent profit was mostly for promoting the project.

“Such profit rates are not offered in other countries. In Vietnam, developers are offering such profit because they do not quite understand this type of property. The most important factor for them is to successfully sell condotels to buyers, and they do not worry about how to get such high profit through the lease programme,” Bury said.

“Condotels can only reach such high profits when they are located in famous tourist hotspots,” Bury added. “The developer may be able to maintain this profit commitment for one or two years, but it is not feasible for 10.”

Nguyen Manh Ha, deputy chairman of the VNREA, sad the commitments will bring developers many difficulties.

“The profit is attractive to customers, but it is not true that all places have high occupancy, especially as the tourism market is becoming more competitive,” Ha said. “Buyers should be warned. When they invest, they have to bear the risks. The more profitable the condotel, the higher the risk,” he added.

Since 2017 there have been signs of oversupply in the condotel segment, with too many developers jumping into the segment, a trend which turned into a lull in 2018 and the first quarter of 2019.

(source: vir)

July 22, 2019 / by / in
Read more 
Vietnam a top destination for expats

Being listed among the top ten by the  HSBC’s latest global Expat ­Explorer Report has gone some way to prove the significant advances in Vietnam’s investment and living environment.

Vietnam is one of the most popular expat havens for its easy living and rewarding working condition

26 years ago, Tetsu Funayama came to Vietnam for the first time to work as an intern at itsubishi Vietnam. At that time, Vietnam was still in the early stages of development and had only a few large foreign direct investment (FDI) projects. Tetsu returned to Vietnam seven years ago and was strongly impressed by the positive changes in the country. Now that he is turning 50, Tetsu is president and general director of Mitsubishi in Vietnam, nurturing ambitious plans to boost investment in the country.

“Vietnam has changed a lot compared to 26 years ago, especially in infrastructure and business environment, thanks to the government’s policies,” Tetsu told VIR.

At the mid-term Vietnam Business Forum in June, many representatives of foreign investors in Vietnam expressed appreciation for the country’s efforts in reforming the Law on Foreign Investment as well as simplifying and cutting administrative and tax procedures.

Vietnam has recently emerged as a hotspot for FDI thanks to the strong development of its economy, with the GDP growth of 6.8 per cent in the first quarter of 2019 after a vibrant 7.08 per cent last year. The country is currently home to more than 80,000 foreign employees, a number which has been continuously rising over the years. Expat communities have been formed such as South Korean groups in Hanoi’s My Dinh area, Japanese groups in Ba Dinh district, and a Western community in Tay Ho district. Similarly, there are expat diasporas in some of Ho Chi Minh City’s most popular areas, such as Phu My Hung in District 7 and Thao Dien in District 2.

The survey, completed by over 18,000 expats across the world, featured 27 questions related to living, aspiration, and little expats.

In the first category (living), expats ranked Vietnam 12th in overall life; sixth in fulfilment; ninth for openness and welcoming communities; and sixth for ease of settling in.

Meanwhile, the country occupied the third spot after Switzerland and Poland in the aspire category. Expats are said to be happy with their disposable income here, placing seventh. The average annual income of foreign employees surveyed in Vietnam was $78,750, higher than the global $75,970. Around two-thirds of respondents agreed that they could save more in Vietnam which provides them with far more spending power to enjoy everything the country has to offer. Expats also named economic stability and work-life balance as the major factors keeping them here.

With such positive work-life balance, it is no surprise that expats find more time to invest in making new friends. Hence, the country ranks fourth in this category, beating even Singapore (13th).

Most expats moving to Vietnam say they quickly adjusted to the local way of life, feeling at home within the first few months of arriving. Many respondents say this is thanks to welcoming Vietnamese communities and the ample chances to get involved with local and cultural events and to form friendships.

The HSBC report concluded that Vietnam makes for a great choice for experienced expats, with 60 per cent of respondents expecting to stay for at least five or 10 years.

According to Pham Duy Khuong, director of SB Law, Vietnam’s immigration laws have also seen positive changes, especially after the implementation of the 2014 Law on Entry, Exit, Transit and Residence of Foreigners.

Foreign individuals now can own houses or can buy, rent, donate, or inherit commercial buildings, including common apartments as well as residential and individual houses in projects, with very few exceptions.

The provisions of the law also increased the duration of temporary residence cards from three to five years, depending on the purpose of residence. In accordance with the policy of attracting talented and skilled workers, the law also offers permanent residence to foreign scientists and experts staying in the country temporarily.

The country’s position among the top ten countries for expats has also sparked interest from international investors and experts, which could result in a real estate boom.

The Wealth Report by British independent real estate consultancy Knight Frank shows that the number of ultra-high-net-worth individuals in Vietnam will increase by 170 per cent from 2016 to 2020, which is the fastest growth rate in the world. This brings tremendous opportunities for long-term investment and vast potential for capital appreciation in luxury real estate. Although the country’s property market is not yet on the same level as the likes of Hong Kong or Singapore, it is well on the way to becoming Asia’s next tiger.

“In my experience of promoting Vietnamese properties overseas, the country has become an enticing destination with tremendous economic growth in the last 10 years,” said Nguyen Khanh Duy, director of sales at Savills Vietnam.

According to Duy, foreigners, especially those from Hong Kong, Taiwain, and mainland China, are finally diving into the market.

Despite significant improvements, administrative procedures are still too mechanical and complicated. Additionally, inadequacies in personal income tax policies, work permits, and insurance for foreign employees have been rising issues that the country should focus on, not to mention environmental problems.

There are more and more progessionals like Tetsu, who are finding Vietnam an agreeable place to live and work for the long term. “We are looking at many positive changes in the country’s legal framework, especially considering public-private partnerships (PPP) which will facilitate our future projects,” he added. He elaborated that his company is planning to venture further into healthcare, retail, and hi-tech agriculture.

(source: vir)

July 22, 2019 / by / in
Read more