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Other criteria in naming the groups involved media products from each company, and survey results from experts in the real estate market, as well as residents who are actually living in the projects of the candidates.

The real estate market in Vietnam experienced both highs and lows in 2019. The overall situation was still at low supply and high demand, especially in major cities like Hanoi and Ho Chi Minh City.

The absorption rate of property products last year was at 70 per cent compared to the 60 per cent of 2018, with some major locations achieving 80 per cent.

The supply to the market was reported at more than 107,000 units, only more than 60 per cent compared to this in 2018.

Of those, more than 72,800 units were sold last year, occupying 64.7 per cent compared to the previous 12 months.

According to Vietnam Report, the tightened procedures on project approvals and implementation, as well as tightened credit sources for the real estate sector, were the main reasons for the low supply.

Also last year, nearly 600 businesses were closed down within the sector. Many small-sized and startup enterprises were disbanded due to lack of investment capital and facing difficulties in capital approach.

Vietnam Report also stated that nearly 53 per cent of real estate businesses assessed that the investment environment in 2019 was slightly worse than in 2018.

High-end property has been developing rapidly, and developers also want to increase supply in low- to mid-end segments, Photo: Le Toan

According to the Ministry of Construction (MoC), the proposal to limit high-end residences is based on the difficulties the real estate market is facing, both from the low liquidity resulting from COVID-19 and the oversupply of high- and mid-end properties, coupled with the shortage in the affordable segment.

The demand for housing in the mid- and high-end segment with prices above VND25 million ($1,000) per square metre only accounts for 20-30 per cent of the total, while the affordable segment accounts for 70-80 per cent of market demand.

There are more than 4,400 new residential and urban development projects nationwide with the total investment capital of VND4.8 quadrillion ($208.7 billion). Of this, the value of properties in inventory is VND104 trillion ($4.5 billion) by the end of March.

Aidan Wee, co-founder and executive director of PropNex Realty Vietnam, believed the proposal is a step in the right direction and will help redirect financial resources in the real estate sector and put the development capabilities of developers to better use. “This would encourage the supply of affordable housing to cater to the real demand of the urban population which is key to the sustainable development of the real estate market,” Wee told VIR.

Andy Han Suk Jung, CEO of SonKim Land also said that it is good that the government is making an effort to increase the supply in the low- to mid-end segments as the supply has been far below demand in the vast majority of the market.

He believed the price must be set by supply and demand, especially in the mid- and high-end markets, in the affordable segment the government has an important role to play by incentivising developers and by facilitating the approval process so that development cycle can be shortened.

“There are many pieces of land that are under government control. If those can be allocated for affordable and mid-end apartments, the supply can be increased in rather short order,” Jung said.

However, according to Wee, while it is a step in the right direction, the proposal will not be effective by itself.

“A more comprehensive legal framework must be developed by the MoC to support mass housing. The ministry could also introduce policies to curb speculation in the affordable housing segment and issue new incentives for developers to encourage them to roll out more projects in the segment,” he said.

Well-meaning as it may be, limiting the premium and luxury housing segments to force developers to focus on the affordable and mid-end segments might not be entirely reasonable because there is still demand for high-end housing with better amenities and living environment.

“Purposely limiting supply to these segments will cause a supply and demand imbalance to greatly widen prices across different segments and put premium and luxury products out of reach for the more affluent people,” Wee added.

Jung from SonKim Land also explained that limiting mid- to high-end products would not help the market as Vietnam’s middle-income population is growing rapidly who can afford better projects, while there is also steady demand by foreign buyers who are here to work or to invest in real estate.

At a while many people may be concerned that a restriction will only drive prices in the affected segments higher as demand will keep going up while supply is frozen. “I think it would be advisable to adopt a hands-off approach and let supply and demand set the prices, and help to intervene in the affordable segment to give incentives to developers and shorten lengthy procedures to encourage developers to do more and more,” said Han.

Stephen Wyatt, country head for JLL Vietnam, said that over the past few years the residential sector has been developing and there has been a considerable amount of new mid- and high-end apartments entering the market in both major cities of Hanoi and Ho Chi Minh City. Key factors to consider, according to Wyatt, are that the total supply of residential apartments is coming off a very low base, especially when compared to other Southeast Asian cities and the ratio of apartments to the population is still low.

At the same time, it has become incredibly difficult to find land within close proximity to the city centre. This has pushed land values to artificially high levels, which in turn has increased the prices of residential apartments. Moreover, the market needs to shift focus to more affordable housing, catering for the end user. However, this can only be achieved when there is more available land and land values are cheaper.

Wyatt added that the market needs to re-calibrate and focus on real demand and a balance of all sectors.

Meanwhile Damian Sung, sales director of Asia Bankers Club, told VIR that with the optimistic results of the fight against the pandemic in Vietnam, the real estate market should be largely unchanged. However, investors seeking distressed assets prove that this is not the case.

For those that have invested earlier, they will likely see the value of their properties go up as high-end supply is limited, with heightened interest in current inventories or new projects being launched this year. This will also boost the secondary market for foreign quotas as there are limited supplies of good development in both Ho Chi Minh City and Hanoi. “However, the bad part is that there will not be newer projects for the time being,” said Sung.

Instead of limiting the high-end segment, experts suggested the Vietnamese government to issue more incentives to encourage developers to invest in mid-end and affordable housing.

Hanoi has more than 1,500 old apartment buildings. – Photo dantri.com.vn

One of the main issues is that the time it takes to rebuild an apartment building is variable, and consequently has a large impact on payback.

After more than 10 years of implementing a plan to rebuild old apartment buildings in Hanoi, only 20 have been renovated, accounting for just 1 per cent of the total in the capital. The city needed a lot of time to fulfill the plan, according to Hanoi’s Department of Construction.

Experts said there were also problems with reaching compensation agreements with residents of old apartment buildings, causing delays.

Dao Ngoc Nghiem, vice chairman of the Viet Nam Urban Planning and Development Association and former director of Hanoi’s Department of Planning and Architecture, said it was difficult to ensure the interests of all parties including residents and enterprises.

In addition, there were still many problems related to the implementation of those projects, according to Nguyen Van Dinh, deputy chairman of the Viet Nam Association of Real Estate Brokers.

Hanoi’ Department of Construction reported the city had more than 1,500 old apartment buildings, most of which were 40-50 years old located in central business districts such as Kim Lien, Trung Tu, Phuong Mai, Thanh Cong and Giang Vo.

The buildings had infrastructure and services in place, but had degraded over the years.

In response, the State has issued a policy to rebuild those buildings to improve living conditions for residents.

According to the Viet Nam Association of Real Estate Brokers, a number of investors are buying old apartments and waiting for opportunities to rebuild them to sell or lease for higher prices.

This has led to old apartment buildings becoming a hot segment in the domestic property market.

A 50-sq.m apartment on Hang Voi Street is on offer for VND70 million per sq.m, while a 40-sq.m old apartment in Giang Vo is going for 57.5 million per sq.m.

Prices fluctuate between VND40 million and VND60 million per sq.m for old apartment buildings in Dong Da District, such as Trung Tu and Phuong Mai.

This meant the price is the same as a new mid-end apartment in inner-city areas such as Tay Ho, Hoang Mai and Ha Dong, or luxury apartments on the outskirts of Hanoi, the association said.

A property broker said the higher prices of old apartments was due to their locations near schools, hospitals, markets and shopping centres.

The price of an old apartment on Hang Bong Street in the Old Quarter even stands at VND120 million per sq.m, more expensive than luxury apartments in other areas.

Savills Vietnam managing director Neil MacGregor

The pandemic could still bring positive prospects. Is it a strong time for investors to jump in the Vietnam real estate market through mergers and acquisitions (M&A)?

The fundamentals of the Vietnam real estate market remain strong and many international investors still have considerable “dry powder” ready to invest when liquidity returns. However, risk appetite will change and so must pricing expectations to accommodate this. There have been a limited number of M&A transactions driven by foreign capital in recent years; however for local developers seeking an injection of capital, opportunities abound. Savills are actively working with multiple local real estate groups to restructure their portfolios, strengthening their access to capital and assisting with refinancing. Once sellers adjust their pricing expectations to reasonably reflect the broader impacts of the crisis, capital from foreign investors will quickly follow.

How do you expect the recovery process of the real estate market in the coming time to pan out for the country?

The real estate market is set for a challenging period, which has the potential to reverberate throughout the economy. However, whilst the recovery will vary significantly across different sectors and sub-markets, the government has done a good job to position the economy for a quick rebound that should encourage a return to positive activity in the real estate market.

During 2019 the real estate market had already ground to a halt as developers worked to obtain approvals and the market suffered from a lack of new supply. The authorities have an opportunity to give the economy a strong boost from a revitalised real estate market, released from the shackles of slow approvals and allowed to become a powerhouse for the Vietnamese economy to grow.

With government support, the real estate market has a good chance of a strong recovery in the second half of 2020.

The negative impact was not felt in all segments. Which areas are in trouble and which others can capitalise more efficiently?

It is certainly true that retail and hospitality have been hit particularly hard. Whilst retailers may now be able to work towards a recovery in sales, bricks and mortar retail developers face the longstanding threat of the shift towards e-commerce, which has accelerated further over the last few months.

Hospitality has a long road ahead, with the prospect of tourists returning on normalised international flight schedules still many months away.

However, there are some bright spots with the rapidly-growing domestic market set to play a much more important role over the next 18-24 months. Destinations that had struggled to gain momentum pre-crisis, such as Mui Ne, Ho Tram, and Dalat have found a place in the so-called new normal, with the growing middle class flocking to these destinations once social distancing was relaxed.

In office markets in Vietnam, especially Ho Chi Minh City, things have been tight for some time with limited new supply. So, whilst we may see more movement from occupiers looking to save costs, the overall impact on office rents over the medium to long term will be limited.

For Vietnam, although a slowdown in global consumer spending may have a short term impact on manufacturing orders, industrial and logistics real estate is set to remain in strong demand.

How are developers preparing for resuming the market as things try to get back to normalcy?

The key challenge for the residential market is the aforementioned slow approvals, and this will remain the key focus for many developers to be able to recommence their projects. The demand for more affordable products remains strong and this will be the bright spot for the market over the coming 18-24 months.

The higher end of the market will face some headwinds, as buy-to-let investors reassess achievable total returns and foreign buyers are unable to visit.

Savills is actively working with a number of developers to help overseas buyers overcome the challenges of buying remotely and government support in this area would certainly assist.

A good starting point would be for the government to encourage local authorities to start issuing pink books to foreign buyers, which has been incredibly slow and has impacted the reputation of Vietnam as a secure investment environment for foreign investors, despite the clarity offered by the changes in the law back in 2015.

Dung Duong, senior director of CBRE Vietnam.

What trends do you foresee for the real estate market in Vietnam?

Under our research, we expect a set of key trends which will characterise the Vietnamese property market in the coming time. These are the omni-channel, flexible working space, properties with sustainability and wellness features, and the importance of property management.

Can you outline the importance of the new trend in the retail segment?

In the retail segment, consumption will slow but omni-channel retailers display a resilience to COVID-19 which has had the strongest impact on the retail sector. Omni-channel is very familiar in other countries, combining online and in-store types, a mixture of electronic and traditional commerce.

Vietnam has been approaching online consumption, but this trend has not reached adequate levels. This is because the mindset of Vietnamese consumers and a predominant mistrust of the quality and actual specifications of the goods they see online. Many Vietnamese consumers want to see and try the products on before taking them home.

Based on this demand, some retailers are expanding multi-functional services such as The Gioi Di Dong (Mobile World), Dien May Xanh, and Nguyen Kim which permit consumers to order online then come to the store to check out the goods. They also offer delivery.

However, these services require improvements in terms of card payment, logistics, and supply chain management. Vietnam is doing quite well in sectors where preservation is not heavily necessary such as electronics, fashion, and home appliances, however, the country is painfully short on preservation and storage systems for groceries and foodstuff, especially the cold storage system.

Sales will be hit in the short term, with food and beverage, and entertainment the most vulnerable. Retailers are generally in a wait-and-see mode, which has led to a significant fall in site visits and enquiries. This will increase challenges around pre-leasing for new malls. Some retailers are asking landlords to cut rents by up to 50 per cent or even waive rents for the duration of the outbreak.

While retail is set to experience severe short-term headwinds, CBRE believes the sector remains an attractive long-term investment opportunity. The ongoing transformation of shopping centres into experience centres will require strong operational expertise. This will create more opportunities for investors possessing solid retail experience as competition for retail asset will be less intense.

How about the office for lease segment?

We believe the outbreak will create further opportunities for office occupiers to test the feasibility of flexible working or agile working in many markets.

In recent weeks, the government and private sector in Singapore, Hong Kong SAR, Macau SAR, Mainland China, Japan, and Korea have ordered or encouraged employees to work from home in order to limit social contact to slow the spread of COVID-19.

Some companies – particularly those whose staff require only a computer and internet connection to perform their duties – have found this experiment to be relatively successful. While concerns remain over productivity and collaboration among employees working from home, CBRE believes this large scale trial may encourage companies to be more willing to accelerate the adoption of flexible and home working policies in the future.

What other new trends will appear in the future?

The demand for buildings with sustainability and wellness features will be stronger as occupiers strengthen their commitment to employee health and wellness. Properties with such features, particularly those related to indoor air quality, ventilation systems, water drainage systems, and other indoor environmental features to improve employee comfort, will attract stronger demand in the long term.

This could potentially hasten the development of more LEED and WELL-certified buildings.

The outbreak will force companies to reassess Business Continuity Planning (BCP), particularly the need to maintain back up locations for critical business functions and essential employees.

Moreover, property management will become more prominent. At the individual tenant level, greater sensitivity towards hygiene will require more frequent and rigorous sanitisation of the office environment, particularly of shared areas such as canteens and bathrooms along with hardware such as phones and keyboards. Hygiene concerns will require office managers to ensure that high standards of cleanliness are maintained while communicating this to employees.

Asset managers – particularly of properties that include shared amenities such as cafés, retail and agile space – will need to augment their existing hygiene policies to reassure tenants and employees.

Apart from that, data centres which are already the subject of strong investor interest amid the growing importance of big data, Industry 4.0, Internet of Things, and the mainstream adoption of cloud-based services are likely to take on a more prominent role should companies decide to allow employees to work from home more regularly. This would drive cloud storage demand and data usage, boosting date centre fundamentals.

Service apartment show stable development in the real estate market

This real estate segment targets foreign tenants living and working in Vietnam, including long-term employees and a few short-term tourists. Tenants of high-end serviced apartments often work in foreign-invested companies, embassies, industrial parks, international banks, and technology companies.

According to Savills Vietnam, as of the end of 2019, Ho Chi Minh City has had around 6,000 apartment units with an average net rental of $25 per square metre per month and an occupancy rate at 84 per cent.

Le Thi Quynh Le, associate director for residential sales of Savills Ho Chi Minh City, said that backed by strong foreign direct investment flows, the serviced apartment sector continues to perform well. This resilience will be tested in the face of increased completions of hotels and a wave of new apartment complexes.

In Ho Chi Minh City, latest grade A and B serviced apartment projects can be attributed to Mai House, D1Mension Residences, and Republic Plaza, which in total offer more than 300 new units to the market. Other big brand names in this segment are Ascott, Frasers Hospitality, and Pan Pacific. CapitaLand’s wholly-owned lodging business unit, The Ascott Limited Ascott, has been operating in Vietnam for 25 years.

Starting with its first project Somerset West Lake Hanoi, so far Ascott’s portfolio comprises of over 7,000 lodging units in 28 properties across nine cities and provinces, such as in Hanoi, Haiphong, and Ho Chi Minh City.

According to Lew Yen Ping, regional general manager for Ascott in Vietnam, Cambodia and Myanmar, the company continues to expand its presence in Vietnam with the openings of PentStudio West Lake Hanoi and Somerset D1Mension Ho Chi Minh City in 2019, as well as Citadines Pearl Hoi An and Citadines Marina Halong City in 2020.

“In addition, Ascott also will open a new brand with the Ascott Serviced Residences in 2021. Meanwhile, our first 5-star Vertu hotel in Cam Ranh under the portfolio of TAUZIA Hotels, which is slated to open in 2022, is Ascott’s first move into the lodging segment beyond its core business of serviced residences,” Lew said.

Elsewhere, Frasers Hospitality, a member of Frasers Property Group, has now a total of more than 670 units with two operating projects of Fraser Suites Hanoi and Capri by Frasers in Ho Chi Minh City. This company is opening its third project named Fraser Residence Hanoi this year.

Many other junior brands include names like Happy Homes, InterContinental Residences Saigon, Homestead Parkview, Merin City Suites, and Vinhomes Central Park Apartments.

The average rent for serviced apartment units now is ranging around $35 and $28 per square metre for grade A and B apartments respectively. By 2022, 1,500 new units will enter in response to the growing demand for long-term stays, which is mostly generated by increasingly favourable visa policies and an influx of foreign investment.

In Hanoi, by the end of 2019, there were approximately 4,600 apartment units with an occupancy rate of 82 per cent. An estimated 2,700 units from 22 projects will enter the Hanoian market this year, including three projects in the west of the city.

Different from Ho Chi Minh City, Hanoi’s serviced apartments are facing stiff competition by buy-to-let apartments. Those are located in Tay Ho, Long Bien, Ciputra, and the west of the city.

The South Korean community, leading the group of serviced apartment tenants, has changed its demand from renting serviced apartments at projects to apartments that are bought by the individual investors to rent. Many of them even decided to buy apartments or houses in Vietnam.

The impact of the COVID-19 pandemic on the real estate market was forecast to be short term only. – Photo vietnamnet.vn

The real estate market has been frozen since the beginning of this year due to the COVID-19 pandemic.

The Ministry of Construction’s statistics showed that about 80 per cent of real estate sale agents were closed or temporarily halted operations in the first quarter of this year while the others maintained operations at a modest level.

The number of new real estate firms founded in the quarter also dropped by 12 per cent while of those who temporarily halted operation increased by 94 per cent.

Transactions also slumped in the quarter, equivalent to 40 per cent of the same period of 2019. Only 14 per cent of property products available in the market in the quarter were sold, the lowest level in the past four years.

However, industry insiders believed that the impacts would only be short term and the market would be robust in the next two years.

According to Nguyen Quoc Bao, deputy director of real estate firm Danh Khoi Group, the real estate market was undergoing a purification process, pushed by the COVID-19 pandemic, to prepare for a new growth cycle.

This would be a difficult time for companies of weak capacity, but for those with strong financial capacity and professional operation, obstacles like the COVID-19 pandemic would only be short term. The pandemic even created opportunities, he said.

Tran Le Thanh Hien, chairman of Danh Viet Group, said the difficulties of the real estate market were just temporary, adding that in the long term, the market had significant potential for development.

It was time for real estate companies to expand land banks, especially those with strong financial capacity.

According to Pham Lam, chairman of real estate services firm DKRA Vietnam, the market would see increasing competition in the post-pandemic period with the participation of diversified developers, from giants to start-ups, which would create a robust picture in 2020-21.

Nguyen Van Hau, general director of Asian Holding, said that real estate firms must improve resilience and flexibility to cope with market shocks.

Although there were difficulties, the market saw positive signs, Hau said. The State Bank of Viet Nam’s move to cut rates would support the property market, he said.

According to Su Ngoc Khuong, Director of Savills Viet Nam, the COVID-19 pandemic had negative impacts not only on the real estate market but also on more than 50 relevant industries, including construction, building materials, labour and financial markets.

However, the real estate market of Viet Nam still had a number of advantages and was attractive to investors, given the population of nearly 100 million people, 55 per cent aged between 25 and 40 who had high housing demand and strong purchasing power, together with the country’s stable economic growth, improved transport infrastructure and rapid urbanisation.

The Government’s efforts in hastening administrative reforms and speeding up disbursement of public investment were expected to create impetus for economic growth which would benefit the real estate market, Khuong said.

Coworking spaces are increasing in popularity thanks to modern facilities and scope for flexibility, Photo Le Toan

The Vietnamese government, among others, is advising people to stay at home. Events have been cancelled, and companies are permitting their staff to work remotely. This is leading to an increasing demand of flexible office spaces where people can still work with enough facilities like they have at the office.

Companies have been familiar with the traditional fit-out style which comprises fixed offices, allocated workstations, and minimal collaborative work zones.

More recently however, the progressive fit-out style has been more known by customers. This model helps to redefine the changing workplace by incorporating more agile or collaborative work zones and possibly no fixed workstations.

Furthermore, the ongoing US-China trade spat and the recent COVID-19 outbreak could further exacerbate the slowdown in global trade and in turn, impact office demand in 2020.

According to Trang Bui, head of markets at JLL Vietnam, fit-out cost is expected to rise.

“The heavy reliance on imported materials in markets such as Ho Chi Minh City will continue to contribute to costs because of import duties – and increase the time it takes to complete a fit-out,” Bui said.

Flexibility, better experience has driven demand for progressive fit-out style in recent years.

Organisations acknowledge that as work becomes more fluid and employees demand flexibility, their offices should provide a better experience for employees, helping them to attract and retain talent.

Bringing the fight

Despite the real estate market is strongly impacted by COVID-19, the epidemic is imposing less impact to coworking and flexible spaces where investors and developers are positive on the development of this segment.

According to Turochas Fuad, managing director of WeWork in Southeast Asia and South Korea, as a global company WeWork is continuing to monitor the novel coronavirus outbreak closely and has implemented precautionary measures across all locations around the world.

“We are adhering to guidance from governments as well as global and local health authorities regarding the proper prevention and management of this issue,” Fuad said.

His priority is to protect the health and safety of our members and employees, while maintaining as close to normal operations as possible.

“In certain circumstances, including by request of local authorities, we may close buildings or recommend members do not come to work, to protect the safety of our employees, members and the wider community. In Vietnam, all our locations are still open and strictly following precautionary measures,” Fuad told VIR.

Tony Suh Heasung, CEO of Hivelab Vina, the operator of Dream Station, a coworking space from South Korea, said that he has not yet faced difficulties in human or finance resources.

However with the complicated situation currently, Dream Station has prepared many solutions to cope with the epidemic and save labour’s health.

Based on advantages on facilities and services compared with other traditional office space with an attractive promotion programme, Dream Station has aroused interest from many companies that want flexible office spaces. Currently Dream Station has 50 per cent occupancy, and small- and medium-sized enterprises (SMEs) are dominating the majority of tenants.

The future expanding plan in Hanoi, Heasung said, will not be changed due to COVID-19. However, Hivelab Vina also is preparing for the worst when staff have to work at home.

Meanwhile, Next Story group’s spokesperson, who is operating the Kafnu coworking network in Ho Chi Minh City, told VIR that the company business runs as usual. “We remain vigilant and take guidance from the local health authorities so that we can ensure that our members continue to have a safe and pleasant visit. We remain committed to Vietnam for the long term and believe in its strong fundamentals and resilience to overcome the current situation,” said the source.

Next Story is paying high interest to the safety of its members, guests, and employees.

“We are following the guidelines provided by the local health authorities in establishing precautionary measures in Kafnu Ho Chi Minh City. We have also communicated information on epidemic to our members and guests so that they are aware and will monitor their wellbeing,” said the source.

Employees, members, and guests who are unwell with any symptoms of fever or respiratory issues are asked to seek medical aid, the source added. Next Story Group marks its entry into Vietnam last July, with the opening of Kafnu Ho Chi Minh City.

Meanwhile Tran Xuan Kien, CEO of Cogo, also remains positive on his business results, based on the fact that tenants of coworking spaces mostly are not coming from retail, manufacturing, and trade, the sectors most impacted by COVID-19.

“I have not seen either request to reduce rent from both my landlord and my tenants but if the landlord reduces the rent, we will also reduce for the tenants,” Kien said.

Cogo has occupancy of 70 per cent in its system of five offices in Hanoi and it plans to expand its footprint to Ho Chi Minh City and Danang in the coming time.

High potential

The demand of coworking and flexible offices for lease have been developed in Vietnam, especially suitable for startups and SMEs who want to have affordable price but enough facilities offices.

According to Yann Deschamps, head of Workthere Asia-Pacific, the demand for flexible office space in Vietnam will continue to be driven by freelancers, local and international startups, and small corporates.

International startups, digital nomads, and freelancers seeking affordable workplaces could also consider relocating to Vietnam to grow their businesses.

“This growing demand both from domestic and overseas occupiers called for a more advanced solution than traditional leasing services,” said Deschamps.

Cal Lee, founder and global head of Workthere, also shared that Vietnam has seen phenomenal growth in the flexible workspace sector, with many new venues coming to the market.

“At the same time, demand for flexible workspaces continues to grow as more businesses, including startups, SMEs, and even larger corporate companies see the benefits of flexible workspaces over a more traditional lease,” Lee said.

In reality coworking space brands will continue to expand their network of systems in Vietnam. Of those, the race for rental prices will no longer be a decisive factor, but any coworking provider who have prominent brands and close connection to a specific group of customers will take the leading position.

With the rapid and broad development of competitors in the market, coworking spaces are no longer a model that only attracts startups and technology companies. A number of large scale groups with hundreds of employees are also gradually moving to work in coworking spaces because of the flexibility, creativity, modern facilities, and good service available.

Last week, the Ministry of Construction sent a proposal to Prime Minister Nguyen Xuan Phuc to officially approve the investment plan to set up this project, after investors have completed the necessary procedures.

The Saigon Peninsula project was initiated in 2007 by Van Thinh Phat Holdings Group, a domestic developer which has many large-scale property projects in Ho Chi Minh City, to build large-scale infrastructure system and a modern urban area located in District 7 of Ho Chi Minh City.

The $6 billion Saigon Peninsula property project was referred to the PM’s approval

In 2011, the investor was granted the land plot for land clearance and compensation. More than 93 per cent of the land was cleared.

In 2016, a consortium named Saigon Peninsula Group was formed between Van Thinh Phat Investment as well as Malaysian partners Genting and Pavilion.

According to the developers’ announcement, the 118ha project will encompass a shopping mall, a five-star hotel, high-end apartment blocks, deluxe resort villas, and upmarket office towers – all planned by Pavilion.

Meanwhile, Van Thinh Phat Holdings Group is in charge of the land development and Genting will construct what will be the largest international cruise ship terminal in Vietnam, capable of harbouring vessels of up to 200,000 gross register tonnage (GRT).

In 2017, Ho Chi Minh City People’s Committee assigned the local Department of Planning and Architecture to co-ordinate with local district committees to review all delayed projects.

Saigon Peninsula has been delayed for a long time due to changes in the legal framework. Ho Chi Minh City People’s Committee, therefore, had collected opinions from the ministries of Planning and Investment, Finance, Natural Resources and Environment to request the investor to finish all procedures to submit for final approval by the prime minister.

In 2018, the government has assigned related bodies to actively resolve obstacles for this project.

After many years of process, the project site has been left unused except for a fen system around the site.

This is Genting’s second project in Vietnam after its failed attempt to partner with VinaCapital on a $4 billion casino resort in Hoi An six years ago.

The Saigon Peninsula project marks Pavilion’s debut in Vietnam, while domestic partner Van Thinh Phat Holdings Group is already established in the market with many well-known and sizeable real estate developments, including Union Square, the Sherwood Residence, the Windsor Plaza hotel, and Times Square in Ho Chi Minh City.