VietNamNet
Bridge – Big assignment deals in the
real estate market are expected to be made in some more days, when the market
conditions are good enough for purchases and sales.
Soho
Vietnam, a real estate consultancy firm is conducting negotiations with its
partners to promote some assignment deals. Soho Vietnam’s President Phan Xuan
Can said he has in his hand the list of 10 investors, who have ordered to buy
some projects, committing to disburse 30-500 billion dong in cash.
Can has
revealed that some of the affairs would be wrapped up right in the second
quarter of 2012.
There
are three different groups of buyers. The first group includes the long term
investors, who previously did business in other fields but now want to jump
into the real estate sector when they see the real estate projects’ prices are
getting attractive.
The
second group of buyers includes the enterprises, which have to lease business
premises for their head offices and storehouses, and now want to own land plots
of their own.
The
third group is the real estate investors, who luckily sold out their products
in 2009-2010, at the very beginning of the real estate market crisis, and now
return to the market to seek business opportunities when the property prices
drop to the deepest low.
According
to Can, the real estate assignment market has been very bustling recently. It
is estimated that 80 projects are offered for sale, but only 15 percent of the
projects can be assigned. Most of the projects are located in the central
districts of Hoan Kiem and Ba Dinh, and the suburb district of Tu Liem.
“There
are some big affairs worth tens of millions of dollars, on which clients have
left a deposit,” Can said.
Phan
Thanh Mai, Secretary General of the Vietnam Real Estate Association, also said
that the merger and acquisition (M&A) market heated up in the first and
early second quarter of the year.
Mai
said that he can see the growing tendency of transferring real estate projects
nowadays, since real estate developers are now under the a hard pressure. They
have to borrow 70-80 percent of the total investment capital needed for
projects from banks. Meanwhile, bank loan interest rates have been staying
firmly high, thus making the financial costs unbearably high for them.
Especially,
the new real estate developers, who joined the real estate market 3-5 years
ago, have been facing big difficulties. When they began doing business, the
market was very hot, but it later cooled down and got frozen, thus making their
products unsalable and unable to recover investment capital.
As for
the projects which are still under implementation, but lacking capital to continue,
investors would rather sell products at low prices to get money back.
“Once
the prices of real estate projects decrease to reasonable levels, there would
always be the investors who consider buying the projects,” Can said.
“They
would consider if the projects can meet the requirements of the market in short
term (2-3 years) or long term (5-7 years). And these would be the golden chance
for the new investors to jump into the property market at lower opportunity
cost,” he added.
“It is
now also the right time for the investors who have poured big money into the
projects to finish half-done projects and start a new investment cycle,” he
concluded.
However,
some analysts have noted that in thoughts of many investors, selling properties
now mean admitting failure. Therefore, they do not feel convenient when
contacting investment funds or brokers.
Source:
TBKTSG
Business & Investment Opportunities
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