Vietnam - Foreign investors keen to buy office buildings in Vietnam

Many signals showed that the deals of buying back office buildings are taking place in spite of current difficulties.

According to Saigon Businessman Magazine, a lot of foreign investors are seeking and buying office buildings Grade A, B, C in HCM City. They believe that the well-located projects will attract a group of fixed renters. However, investors are keen on center areas in Dist 1 and Dist 3. The buildings outside the centre areas do not price advantage anymore because the office rental in centre areas is more suitable and attractive.

KHM Capital, a fund representing for South Korean investors in Vietnam, said that they are managing to look for Grade A office projects to buy the whole or contribute capital to develop these projects.

Acecom Technologies Ptd Ltd, one of Singapore’s top 50 distributors and suppliers of technological solutions, is seeking and acquiring the office buildings Grade B and C. Average investment for each project is estimated at US$50 million. Buyback purchase of this firm will start in 2012-2013 and be operational from 2014.

In case it fails in seeking partners for transferring the projects or there are few renters, Acecom will use the offices to develop commodity distribution centres for their company.

Acecom focuses on office buildings Grade B and C on basis of modest investment and human resource demand, and low management cost. Once these projects are operational, investors could shorten the capital withdrawal time.

Mr Nathan Cumberlidge, Vice Director of CB Richard Ellis Vietnam, was quoted as saying that there were six factors affecting to the decision of office investors, namely prices, fulfilment ratio and adjustment potential. After considering all aforementioned factors, investors will select suitable investment methods: buying whole project, or becoming shareholders of office buildings, or renting in 40 years. Usually, the capital withdrawal time for office investors is around 10-15 years.

Office buildings Grade A, B, C depend on comfort and location of these projects. According to CBRE Vietnam, till the end of 2011, HCM City had 47 buildings Grade B and 234 buildings Grade C with the respective fulfilment ratio of 17.3% and 10.1%.

VietBiz24

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