Vietnam - Property developers start year with a bang

Scores of property developers are eagerly embracing new projects amid a gloomy market outlook.

During the first day of the Lunar New Year, Vietnam’s leading state-owned building material manufacturer Viglacera Corporation began construction of its Dang Xa II new urban area over 39 hectares in Hanoi’s Gia Lam district with around 2.49 trillion dong ($118.5 million) total investment. The project, 12 kilometres from Hanoi downtown, envisages providing accommodations for around 15,000 residents.

According to Viglacera’s general director Nguyen Anh Tuan, once completed in 2016, the project could provide 352,598 square metres of floor space to Hanoi and be connected to Dang Xa I new urban area to form a modern integrated urban complex northeast of Hanoi.

Tuan added that Viglacera would capitalise on being a leader in manufacturing and supplying new building materials and join efforts with construction firms to shorten construction time and lower housing costs to fuel a dormant property market.

The second phase of Cat Ba Amatina, a hi-end tourism property project in Haiphong city’s Cat Ba township, was also launched on Lunar New Year first days. Vinaconex ITC general director Tran Ngoc Quang told that the current property market brought lucrative investment opportunities.

“In 2012, we would pursue secure investments with suitable products to match market fluctuations,” said Quang, adding that a Vinaconex ITC priority in 2012 was to foster cooperation with Cerberus investment fund which was chaired by former US Treasury Secretary John Snow in tapping Cat Ba Amatina project potential. Accordingly, a joint venture was founded between Vinaconex ITC and Cerberus to make the most of the project advantages.

“A difficult market is when developers could benefit from competitive costs from the part of contractors and material suppliers to save expenses, while the project quality is still secured. That is also a way developers share project added values with their customers,” said Nguyen Huu Nghia, a member of Hanco 9 Management Board.

Nghia said scores of young couples with accumulative saving of around 1 billion dong ($47,000) were hunting shelters, hence the opportunities are multiple for property developers targeting this customer segment with certain financial support schemes.

Hanco 9’s Berriver Long Bien apartment project, rolled out in late 2011, was reportedly warmly received by customers.

Tax and law consulting firm DFDL Mekong’s Real Estate Practice Group head Ta Chau said the property market could potentially be the fastest growth channel after a long sluggish period.

“I have positive views about Vietnam’s property market movements in 2012 in the wake of recent legal changes. The Ministry of Finance’s proposal to open real estate investment trust REIT, once being handled effectively, could provide a shake-up to the market in the coming period,” said Chau.

VIR

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