Many real estate companies are boosting investment in segments which generate the highest added value.
Indochina Land and Savills Vietnam have offered 207 new apartments at Indochina Plaza Hanoi projects. This is a new move for firms to boost their investment in the Vietnamese realty market.
Making the difference
Tony X.Diep, Director of Indochina Land, said the fund is preparing US$460 million to pour into the realty market. From now to the end of this summer is the “golden” time to boost the implementation pace of projects. Indochina Land will add US$100-US$150 million into realty investment.
He said, after the impacts of the global economic slowdown in 2009, Indochina Land will cooperate with leading real estate firms and focus on infrastructure projects. However, this year, Indochina Land will concentrate on the segment with the highest added value at present such as high-end apartments, resorts and trade centres. Its top choices are still Hanoi, Ho Chi Minh City and Danang.
Nathan Cumberlidge, Head of Market Research and Valuation at Colliers International, said all segments of the Vietnamese realty market have seen changes since early this year. Many businesses expect changes in the housing segment.
At the launching ceremony of the Sunrise City project and two Duplex and SkyVilla villas, Huynh Du An, Deputy Director of Novaland, the projects’ investor said, the company invested in two strategic products to meet increasing customer demand.
An said there two distinct investment trends in the realty market currently, but they are profitable. They are medium-class and high-class segments. Therefore, despite being sold at prices of US$2,100-US$3,000/m2, Sunrise City investors believes they can sell out apartments in the near future.
High-end realty beginning a development stage?
SaiGon Investment Import Export group Corporation (Incomex Saigon Group) has introduced Ocean Hill Village villas project at Duong De, Vinh Hoa, Nha Trang city with a total investment capital of VND600 billion. Sharing the same view with An, Nguyen Kim Lan, Chairman of Incomex Saigon Group, said the biggest worry about project imple mentation is if site clearance costs hundreds of billions of VND. However, the high-end realty market of Vietnam has entered the development period; therefore, customers are very keen on investment in the market.
Colliers Company said the Hanoi realty market is developing more strongly than other cities and provinces, and rich local people are ready to invest in high-end realty. Owning a luxury realty project is an advantage that the rich aim for.
In an interview with Vneconomy on things learned from realty investment in 2009, Tony X.Diep noted that Indochina Land will increase investment in cleared projects to keep its capital safe.
Tony X.Diep said that entering an emerging market like Vietnam is not completely easy. The success of Indochina Land has been built over 18 consecutive years, in the midst of ups and downs on local realty markets. Establishing a new investment fund in the Vietnamese realty market is difficult as realty investors are more careful with their investments. In realty, many investment funds did not initially gain impressive business results.
However, with strong human resources and a proper investment strategy focusing on product and services and bringing customers a special value, success is within reach.
Excitement in medium-class house trading segment
According to Colliers, in the first quarter this year, several realty segments have seen positive changes. Trading of medium-class houses priced at US$1,000 – US$1,500 USD/m2 was very exciting. This is a segment suitable for demand of low-income households, with the focus on apartments of two bedrooms and covering 70m2 – 90m2.
Many investors said investment trends this year and in the following years should concentrate on segments for low-income people or areas which will be “hot spots” of investment in the near future.
A survey by Savills Company showed that, in the first three months this year, price increase in luxury apartments was just 1 per cent, while low and medium-grade properties increased up to 33 per cent.
Districts with big new urban areas such as Ha Dong have attracted investors’ attention for apartment projects. Apartment projects in Ha Dong mostly cover 60m2 –100m2 each and price level often fluctuates from US$800 – US$1,500 m2. The district will provide a big apartment supply in the time to come. It is also connected with trade projects in Cau Giay and Tu Liem districts. Park City built on 77ha was among projects kicked off in the first quarter.
Areas of Hanoi attracting great attention from investors are Hoang Mai, Ha Dong, My Dinh-Me Tri, Lang-Hoa Lac, Nam Thang Long, Tay Ho, and National Highway 32 and expanded Hoang Quoc Viet Street.
A report from Colliers and some market research firms indicated that as many as 47,400 apartments will be launched in Hanoi by the end of 2013. Of these, 39 per cent will be built in Ha Dong, 14 per cent in Cau Giay and 12 per cent in Tu Liem.
Notably, medium and high-grade apartments will account for up to 82 per cent of the city’s total supply source. Only a small number of projects are for medium and low-grade segments.
With these figures, Tony X.Diep said, it is necessary to have policies to encourage investors to pour money into realty for medium and low-income people. (VNE)
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