VietNamNet Bridge – The foreign direct investment (FDI) in the real estate sector in HCM City decreased sharply in 2012. However, experts say this is not bad news at all.
Worry or joy?
According to the HCM City Statistics Office, in 2012, the city granted licenses to eight real estate projects which had the registered capital of US$117.7 million, accounting for 21.7 percent of the total FDI in the city. This was the second attractive investment field just to trade which had the investment capital of $514 million.
This proves to be the “modest” figure since 2008, the year when the city had a “bountiful crop” in the FDI in the real estate sector. In that year, the five real estate projects alone had the registered investment capital accounting for 80 percent of the total FDI capital of the year. All of the projects were the big ones capitalized at $400 million and higher.
Since then, real estate had always been topping the list of the most attractive investment fields in the city. Of the 40 projects capitalized at $100 million at least, 25 are in the real estate sector.
However, things changed a little in 2012, when trade projects topped the list. Meanwhile, the number of real estate projects and the scale of the projects both decreased significantly. The eight registered projects had the investment capital of $117.7 million, which means that every project is capitalized at less than $15 million.
Le Chi Hieu, President of ThuDuc House, a real estate development firm, believes that the investment flow into the real estate sector would be decreasing further, because the government plans to restructure the market, halt the project implementation to restrict the supply.
However, the decreases in the investment in the real estate sector should not be seen as bad news at all.
In fact, though the city attracted a lot of investment projects in 2008, only a few of them have been implemented so far.
Of the registered projects, the VIUT – the international university urban area, VFC – the financial center, which have the registered capital of $3.5 billion and $900 million, respectively, still have not been fulfilled necessary procedures to be kicked off.
Local newspapers recently reported that a lot of foreign investors have given up their projects due to the financial problems in the global economic crisis. The investors received the investment licenses at noisy ceremonies, but have left Vietnam quietly.
As such, the number of registered projects and the scale of the projects both still cannot show the actual situation. Only when the projects are implemented in reality, should they be counted on as investment projects in Vietnam.
The authentic investors still exist
The registered FDI capital has been decreasing not only in the real estate sector, but in all business fields, which has been attributed to the global economic crisis.
However, in the crisis, a lot of investors still have been implementing their projects. According to the HCM City Planning and Investment Department, in 2012, the FDI disbursement reached $470.2 million.
These include Daewon – Thu Duc’s project ($20.5 million has been disbursed) on building three 16-storey apartment blocs, and Riviera Point ($206 million). As for the high end complex on Nguyen Hue – Dong Khoi road in district 1 developed by Times Square Company, $37.5 million has been disbursed.
Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Health care and Life Science with expertise in ASEAN 's area. We are currently changing the platform of www.yourvietnamexpert.com, if any request, please, contact directly Dr Christian SIODMAK, business strategist, owner and CEO of SBC at firstname.lastname@example.org. Many thanks.