Vietnamese real estate returns to center stage

Some 500 projects will be unveiled at a conference and exhibition next week in Ho Chi Minh City.

Vietnam Top Property Opportunities, the country’s largest such event, will take place from October 21-22. It will provide opportunities for foreign and local realtors to network, learn from each other, and make the most of the post-recession market.

The conference and exhibition will attract foreign and local investors, government officials, economists and property experts, according to the organizers from Sao Khue Communications Corp., who expects the event to inherit success from the first Vietnam Top Property Opportunities last year.

“The international real estate event brought business opportunities and benefits for not only investors but also government agencies. We are supporting the event as a bridge to introduce Vietnamese real estate projects to the world,” said the head of the Foreign Investment Agency, Phan Huu Thang.

According to the organizers, the event in 2009 with the theme Time of Big Opportunities will introduce 500 real estate projects for which foreign investment is sought. Crisis brings challenges and an opportunity to make bold changes and more fundamental restructuring, the organizers said.

Government officials from the ministries of Planning and Investment, and Construction will present the government’s views on and reactions to the crisis and how the Vietnamese government is coping with the recession and taking measures to boost economic growth. A bright future awaits the economy as Vietnam witnessed overall GDP growth of 4.6 percent in the first three quarters. Industry and construction, which account for 40 percent of the Vietnamese economy, grew 4.5 percent in the first three quarters, with the subcategory measuring construction alone expanding 9.7 percent.

The event will consist of two parts. Part one will provide a macro-vision of Vietnam’s economic status in light of the government’s economic policies as well as the global context. Part two will center on more in-depth and professional analyses of the current situation and opportunities, providing understanding that may help with investment and business decision-making.

Promising market

According to the organizers, experts and investors in real estate will discuss the prospects for investment in tourism-related real estate and retail distribution in the industry. As an excellent destination, in 2008 Vietnam attracted more than US$10 million worth of investment in tourism property. In 2009, the country has

been less attractive to foreign investors due to the recession. However, recovery will bring opportunities at year-end and next year. Retail distribution in real estate and trade markets is promising since the government introduced its stimulus package. “Vietnam’s real estate will develop in a stronger wave in the next five or ten years,” said Martin H. Kaye, chief executive officer of Millennium Group & Starbay Holdings.

More promising is residential and industrial property and infrastructure, according to the organizers. Young people dominate the country’s population of 86 million and create a huge housing demand. A national report says that, in Vietnam, two people of working age (15-60) now support one dependent relative, rather than two relatives ten years ago. This will create more opportunities for Vietnamese working-age people to spend their incomes on consumption and housing. Don Lam, director of VinaCapital, said in a meeting that the residential housing market had the most potential in Vietnam and the fund manager would focus on the market as its strategic goal for investment in Vietnam for the next couple of years. He insisted that houses priced at VND1-3 billion ($56,053-168,161) each would be the best sellers in the country when the asset was affordable for a local family to own.

Manufacturing development always goes in parallel with transport and logistics infrastructure development. The area has been the focus of Vietnam’s economic development policy for the last 20 years to the extent that there are now over 200 industrial parks and export processing zones nationwide. However, there are still shortages of key infrastructure like electric power, seaports and related land infrastructure such as roads and bridges. Any delay in solving this problem will result in a shrinking of foreign direct investment.

The Mekong Delta is the country’s largest rice-growing region but is the least developed in terms of infrastructure, leading to slow growth in the economy. The government is inviting investors to the area and encouraging infrastructure development there. The new issue will be mentioned in the event as a new destination for investors, who will meet authorities from the southern region and learn from projects.

CASINOS IN THE CROSS-HAIRS

Casinos are one of the hot topics in real estate investment. This issue will be addressed by government officials at the event. For the benefit of the Vietnamese government, one or two presentations will cover the way other countries handle casinos, and the business models they use.

The government has piloted casino investment in some provinces and cities frequented by international tourists and foreign investors. Numerous applications from major international groups have been submitted to operate casinos in different cities and provinces. The first pilot casino project started in Do Son in 1992 but since then the business has been under tight control and restricted in many ways.

source TNO