VietNamNet Bridge – The investors in the tourism real estate
sector, who thought to be unhurt by the gloomy real estate market, have also
tasted the bitterness of the economic crisis.
Real estate investors once rushed
to pour money into tourism projects, believing that the “early bird can catch
the worm.” The investors who come late, would not be able to find the “golden
land plots” on advantageous positions, which is a very important factor that
makes a project successful.
However, the investors have been
put into dilemma. They cannot arrange capital to continue the projects in the
current context of the economic downturn. Meanwhile, even if they can seek
capital for the projects,, they are not sure if the works can be put into
operation to bring profits in such conditions.
The information that the father
of Michael Jackson has announced his decision to quit the two billion dollar Happyland
project has stirred up the media. Kicked off on February 14, 2011, the project
has become well known to everyone in Vietnam and abroad because of its big
scale.
The latest information released
by Khang Thong Group showed that the investor is gathering the strength to
develop the project, hoping to put the 50-hectare Vietnamese culture area into
operation prior to the 2013 Tet. However, this is just one of the 150 items of
the Happyland complex.
Local newspapers have reported
that 60 percent of the works of the item have been fulfilled. Another item, a
balloon with the expected diameter of 20 meters capitalized at over one million
dollars has been well inflated, which would be into operation soon.
The works on the 3.7 kilometer
embankment adjacent to the Vam Co Tay River, which costs tens of billions of
dong, is also nearly completing.
However, the construction of a
lot of other important items of Happyland, including the five star hotel,
shopping area, or cinema has not been started yet.
The main reason behind the slow
project implementation is that the investor still cannot arrange capital.
Lacking capital is also the
problem that many other tourism real estate developers are facing.
In 2007, the Tan Tao Group (ITA)
got the license to build a film studio Vina Universal with the capital of 50
million dollars. The investor hopes to set up a big complex of shopping mall,
service center and film studio, covering a total area of 2600 hectares in Quang
Ngai province.
However, four years later, in
2011, ITA stated that it would give up the project because it could not
mobilize capital for the project.
In June 2010, Tran Kim Chung,
President of CT Group, announced the investment in the Vinh Loc Park in Binh
Chanh district in HCM City with the estimated investment capital of one billion
dollars.
However, the investor has not
taken any further move so far, because the local authorities have not allocated
land. However, people believe that the real reason behind this is the lack of
capital.
As for Happyland project, in
order to mobilize capital for implementing the other items slated for the first
phase of the project, Khang Thong would have to call for foreign investment.
According to Nguyen Huu Viet,
Deputy General Director of Happyland Media, a subsidiary of Khang Thong Group,
said three investors from South Korea, Japan and Sweden have expressed their
interest in the project. The foreign partners are negotiating the capital
contribution to the five-star 1000-room hotel, an item of the project.
Viet also said that Tran Group,
owned by a Viet Kieu in the US, has also shown its interest in Happyland.
As such, lacking capital has
hindered the investors to develop their projects. However, analysts believe
that even if they can mobilize capital, they would be facing big difficulties
when putting the projects into operation.
Thibault Paquin, President of the
US based Celebrating Life, specializing in designing modern leisure parks, said
though the model is very popular in the US and some Asian countries still
cannot develop well in Vietnam.
“Vietnamese people would have to
wait some more years to have money to pay 50-100 dollars for the admission
tickets,” he said, adding that 90 percent of the leisure parks in China are taking
loss, which should be a lesson for Vietnamese investors.
Compiled by C. V
Business & Investment Opportunities
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