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Why Vietnam industrial real estate luring foreign manufacturers?

by Vietnam Insider

Le Trong Hieu, director of Advisory and Transaction Services at CBRE, said that in some northern provinces like Haiphong, Bac Ninh, Hanoi, Hai Duong, and Hung Yen the supply of industrial real estate is around 9,600 hectares with an average occupancy rate of 79 per cent.

Meanwhile, in the southern provinces like Binh Duong, Dong Nai, Ba Ria-Vung Tau, Ho Chi Minh City, and Long An, the supply of industrial real estate is around 24,000ha with an occupancy rate of 76.7 per cent. Meanwhile, the supply of ready-built factories and warehouses in the third quarter of 2020 is on an uptrend.

Related: Webinar “Vietnam’s property market trends & economic conditions”

The total supply of ready-built factories and warehouses in the north reached 2.1 million square metres, up 25.3 per cent on-year. For the south, the figure is 2.7 million sq.m, up 28.2 per cent on-year. Meanwhile, there are 2.9 million sq.m of ready-built warehouse space, up 11 per cent against 2019.

“There is a strong increase in new supply in industrial areas. The rental rates of land went up 20-30 per cent on-year and warehouses have increased as well,” Hieu said.

Specifically, in some industrial zones in Ho Chi Minh City, the rental rates have increased from $150 to $300 per sq.m for the remaining lease terms. In Dong Nai, the rental rates have increased from $110 to $155 per sq.m. Meanwhile, Long An saw rates go from $110 to $200 sq.m.

Some northern localities also witnessed an increase in rental rates, but the trend was not as pronounced as in the south. In Hanoi, the rental rates have increased from $155 to $260 per sq.m while in Bac Giang they went from $55 to $110 sq.m.

CBRE observed that tenants’ demand mainly centred around Vietnam’s key industries such as electronics, e-commerce, food, livestock, and FMCG. These industries are more developed in Vietnam and investors are looking to use the country as a hub to access new markets. There is also a clear trend of relocation among investors in automobile assembly, with the northern and central regions benefiting. In addition, many investors are looking to develop ready-built warehouses.

C.K Tong, CEO of BW Industrial Development JSC, stated that Vietnam is the first destination for foreign capital, prompting high-tech manufacturers to set up and expand their production bases in the country.

“This is good news for both domestic and foreign investors,” C.K Tong claimed, adding that over the last nine months, many enterprises moved out of China and selected Vietnam as their destination.

Besides, there have been several other investors choosing Vietnam as a manufacturing hub. For example, the transformation of Samsung has brought many foreign suppliers to Vietnam.

Therefore, it is essential to transform the whole supply chain. However, enterprises are coping with hurdles regarding capital, finding suitable locations, licenses, and labour force.

Therefore, factories and warehouses are heavily sought after, opening up opportunities for BW Industrial.When choosing factories for renting, enterprises usually focus on flexible rental areas (at least 500sq.m), flexible payment terms, proper cash flow management, construction certificates, simplified licensing process, as well as professional teams to manage the facilities.

“Most recently, we have received a lot of queries from European companies, which have manufacturing facilities in China,” he said.

It is worth noting that there is a strong demand for industrial land among furniture producers, which are not traditional manufacturers. In addition, local firms are also interested in expanding their operations and are expected to be a key drivers of industrial real estate development.

Tran Quoc Trung, deputy director general of the Department for Economic Zones Management under the Ministry of Planning and Investment, stated that foreign investors have high demand and pay avid attention to supply chain development.

Fortunately, the country has made some adjustments in the revised Law on Investment to facilitate investors to expand and develop supply chain and supporting industries.

“I hope that with the government’s efforts, more local and foreign investors will join the industrial real estate market,” he added.

Pham Ngoc Tung, vice general director of Sales and Marketing of IMG, said that it is possible for Vietnam to expect 6per cent GDP growth in 2021 due to the many positive factors supporting the industry.

The impact of COVID-19 is a lasting one, but Vietnam remains a reliable destination. Highlighting Vietnam’s stature in the international economic arena, immediately after his appointment, the Prime Minister of Japan selected Vietnam as his first foreign call.

“Location development will be our primary strategy. Currently, technology has given a great tool of communication for businesses, and we also make the most of this platform. This has helped us make our operations more efficient and attract investors from abroad,” he said.

By Vietnam Investment Review

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Enterprise

Apartment selling prices in Hanoi increase to a new level

by Daisy Nguyen

Apartment prices have increased to a new level, particularly in center city areas.

Dang Anh Tu and his wife, from Hai Phong, were seeking to buy an apartment in Hanoi after 10 years of living in a rental. Having VND1.5 billion, they wanted a 70-square meter apartment in the area not far from their offices and their children’s schools.

However, Tu was disappointed after realizing that with that amount of money, he could only find an apartment in Hoai Duc and Dong Anh districts, which are far from the central area.

The apartments in the suburbs are priced at VND25 million per square meter, while apartments in the central districts have higher prices, about VND35 million per square meter.

“Ads say buyers just need to have from VND1 billion to buy an apartment. But when we contacted the distributors, I realized that VND1 billion is the initial amount buyers have to pay, and the payment is made in many stages,” he said.

There are only two options for Tu, either buy an old apartment in the central districts, or buy a new apartment in the suburbs.

“You won’t find any apartment priced at around VND1.5 billion in Hanoi,” said Nguyen Van Thanh, a real estate broker.

Thanh said the demand for houses and apartments priced at below VND2 billion is very high. However, the supply is low. With less than VND2 billion, one can only find houses in areas far from the center.

The apartments priced at VND20-25 million per square meter are the targets of middle-income earners. However, such apartments have not been available in the market since 2015.

According to Thanh, the apartments delivered 5-10 years ago can be bought at VND25-30 million per square meter. Some owners offer apartments at reasonable prices, but they are in the suburbs.

Even in the Belt Road No 3 area, known as the area of low-cost housing projects, apartments are sold at VND30 million per square meter, though the price was just VND20 million some years ago.

Meanwhile, at high-end housing projects, the prices are no less than VND40 million per square meter.

Some years ago, the market turned hot with a series of low-cost housing projects developed by Le Thanh Than, a well known realtor.

However, the low-cost market segment cooled quickly. A realtor once announced that he would join the low-cost market with VND700 million apartments, but he ultimately did not invest in the market segment, and changed his mind, investing in higher-end products.

Because of the high demand and low supply, the prices of apartments are escalating. According to Savills Vietnam, the primary average selling price has seen an increase of 7 percent year on year.

This article was originally published in VNA

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Enterprise

Real estate reports highest number of suspended firms

by Daisy Nguyen

The real estate sector saw the highest growth in the number of enterprises registering for a temporary suspension between January and August at 923 firms, skyrocketing by 136% year-on-year, due to the impact of the coronavirus pandemic.

Meanwhile, 620 real estate enterprises completed procedures for dissolution, with the sector ranking fifth among the country’s dissolved firms over the eight-month period, after the wholesale, retail, and vehicle maintenance sectors, with some 38,000 firms, followed by the processing and manufacturing sector, construction, and science, technology, design, marketing and consulting services.

In the year to August, the country had some 34,300 suspended firms, up 70.8% year-on-year, while over 10,350 enterprises registered for dissolution, down 1.9% from the previous year’s period.

The number of newly established firms active in the property sector during the eight-month period fell by 19.6% year-on-year, VietnamPlus news site reported.

Le Hoang Chau, chairman of the HCMC Real Estate Association, attributed the hike in the suspension of housing developers to the health crisis. He said the real estate market faced multiple difficulties from 2018 to 2019 due to the policy on strict control over property loans, shouldering an additional burden caused by Covid-19 this year.

Real estate firms have been withstanding pressure and facing several challenges triggered by the pandemic, dragging the property market down this year.

The Covid-19 pandemic has interfered with marketing, advertising and selling activities for property products, sending the revenue of many property firms down, Chau said, adding that multiple firms have even incurred heavy losses as costs of management and investment and loan rates have soared.

This article was originally published in Sgtimes

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Life

Hanoi offers 23 more housing projects for foreign ownership

by Daisy Nguyen

So far this year, Hanoi has made public 45 housing projects that allow foreign ownership.

Hanoi’s Department of Construction has publicized a list of 23 more housing projects in which foreign individuals and organizations are eligible to be direct buyers.

In the newly-announced list, four projects are located in Ha Dong district; three in Long Bien district; two each in Hoang Mai, Cau Giay, Thanh Xuan districts, Son Tay town, and the outlying districts of Hoai Duc and Gia Lam; one each in Bac Tu Liem, Tay Ho, Nam Tu Liem, and Ba Dinh districts.

Ha Dong district has four projects namely An Hung New Urban Area commercial complex, high-end serviced apartment, and low-rise housing area developed by Van Phu Invest Investment JSC; Kien Hung Residential Area in Kien Hung ward invested by Military Prochemical JSC; HH complex in An Hung developed by Van Phu Invest Investment JSC; CapitaLand – Hoang Thanh commercial complex in Mo Lao New Urban Area in Mo Lao ward by CapitaLand – Hoang Thanh Co., Ltd.

Thanh Xuan district has two projects namely Thanh Xuan Tower office and high-rise apartment building invested by Quang Minh Construction and Trading JSC, and DLC Complex Nguyen Tuan developed by DLC and An Viet Consulting Co.

In June 2020, the Hanoi’s authority announced a list of 22 projects of the same purpose.

Reality

Under Vietnam’s amended Law on Housing that took effect in July 2015, all foreigners who are granted a visa to the country and not entitled to privileges and diplomatic immunity are eligible to buy not only apartments but also landed property (villas and townhouses), and requirements for their home ownership rights have been significantly relaxed.

The tenure is 50-year leasehold with renewal possibility. Foreign individuals married to Vietnamese citizens are entitled to freehold tenure.

The Ho Chi Minh Real Estate Association (HoREA) cited the Ministry of Construction’s report on nationwide real estate market in 2009-2019 that the number of houses developed in the decade reached 3.77 million.

Meanwhile, the number of houses that foreigners have probably bought in 2015-2020 is about 16,000, accounting for 0.85% of the total houses in commercial housing projects.

Under the law, the ratio of apartments owned by foreigners does not exceed 30% of each commercial housing projects.

Vietnam argues that the ceiling of 30% is aimed to ensure security.

HoREA insists on keeping the ceiling of 30% without relaxing it.

According to HoREA, only the Hanoi People’s Committee has granted ownership certificates to foreigners who buy houses in the city.

This article was originally published in Hanoitimes

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Finance

Property prices in HCM City’s east boom

by Daisy Nguyen

HCM City’s plan to establish Thủ Đức City by merging districts 2, 9 and Thủ Đức has caused property prices in the three eastern districts to increase sharply.

The prices of some existing apartments on Đồng Văn Cống Street and Hà Nội Highway in District 2 have increased by nearly VNĐ300-400 million (US$12,944-17,259) each since early 2020.

Many projects in District 9 such as Him Lam Phú An and Jamila Khang Điền have seen prices increase to VNĐ37-40 million ($1,596-1,725) per square metre from VNĐ30-35 million ($1,294-1,510) last year.

Others such as Safira Khang Điền, Saigon Gateway and Hausneo have gone up from VNĐ27-30 million to VNĐ35-37 million.

Prices at Vinhomes Grand Park have increased from VNĐ30-38 million late last year to VNĐ35-45 million now.

Metro Star in District 9 increased to VNĐ45 million in the second phase of sale, up VNĐ10 million from the first.

According to a survey conducted by Chợ Tốt online real estate platform, apartment prices in the three eastern districts have increased by 18 per cent compared to April.

Most of the city’s key transportation projects like the Hà Nội Highway, Saigon River Tunnel, HCM City-Long Thành-Dầu Giây expressway, and Metro Line No1 pass through the east.

Besides, a series of further transportation projects are planned such as the Thủ Đức bridge to the Thanh Đa peninsula in Bình Thạnh District, Ring Roads No. 2 and 3 that will link the entire eastern area and the Cát Lái Bridge connecting District 2 with Nhơn Trạch District in Đồng Nai.

According to industry experts, as the gateway connecting the ‘golden’ economic triangle of Bình Dương-Đồng Nai-HCM City, the city’s eastern part has been the leading real estate location for years.

The establishment of the new city would make the market there even more attractive, they said.

Ngô Quang Phúc, general director of Phú Đông Group, said developing Thủ Đức City into an innovation and hi-tech town associated with modernisation and digitalisation would make the east a “promising land” for young people and technocrats, and so developers would focus on smart housing there.

Nguyễn Thị Thanh Hương, general director of Đại Phúc Land, said the establishment of the innovation city would create more jobs, increase housing demand and attract domestic and foreign investment.

“Domestic and foreign investors always look for investment opportunities in both the short and long terms. The establishment of the eastern city envisaged as an innovation town and a new economic development hub will attract investments and create a driving force for the development of this area.

“Thus, real estate prices will also go up, with major projects that are well planned and offer the quality of life for residents having a great advantage in the market.”

This article was originally published in VNS

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Finance

Housing prices remain high due to limited supply: report

by Daisy Nguyen

With developers struggling to get licenses for new projects, housing prices could rise by up to 10 percent this year, according to a report by brokerage SSI Securities Corporation.

The report expected the increase to be 7-10 percent in Ho Chi Minh City and 2-3 percent in Hanoi as the licensing hassles hit supply and land prices remain high.

Housing projects are inspected to ensure complete legality if they are on land parcels of which even a portion used to be public in the past, and this is delaying licensing, said the report.

Nevertheless, SSI forecast average pre-tax profits of listed property companies to grow by 10 percent this year.

Some developers have been expanding to the suburbs of major cities and building large townships, attracting an increasing number of buyers, it said.

The report also referred to the impacts of the Covid-19 pandemic on the housing market. In the first half of the year sales of premium apartments, or those costing over VND60 million ($2,600) per square meter, fell 30 percent year-on-year, it said.

Apartment rents have dropped by 20-25 percent due to a shortage of foreign tenants, it added.

This article was originally published in Vnexpress

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Enterprise

Vietnam property market remains attractive proposition for foreign investors

by Daisy Nguyen

The first seven months of the year witnessed foreign direct investment (FDI) into Vietnamese real estate stand at US$2.8 billion, according to figures released by the Ministry of Planning and Investment.

In terms of FDI attraction among various sectors, real estate came in third, behind the processing industry and manufacturing and production.

Most notably, the Ministry of Construction state that the novel coronavirus epidemic has negatively affected both the global and national economies. Indeed, several firms have faced numerous difficulties with their production and business activities stalling amid tough times.

The realised capital of FDI projects continued to decrease over the first six months of the year, equivalent to only 95.1% compared to the same period from last year.

According to statistics released by the Ministry of Planning and Investment, total registered capital pouring in the property sector ranked 4th with nearly US$850 million, accounting for 11% of newly registered FDI capital.

As of the end of July, the country had attracted approximately US$60 billion in real estate investment.

This article was originally published in VOV

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Finance

Real estate market struggles during Covid-19 pandemic

by Daisy Nguyen

Real estate firms have had to struggle to survive during the COVID-19 pandemic, which has caused the loss of trillions of dong and job losses to 75-80 percent of workers in the field.

The deputy general director of a real estate group specializing in developing urban areas in provinces adjacent to HCM City said Covid-19 has upset the business plans and structure of the company.

To cut costs, the firm has laid off workers in large quantities. The number of workers has fell from 2,000 in 2019 to 500, which means 75 percent of sellers have been dismissed.

As for the remaining 25 percent of workers, he said the company has advanced them to to change jobs because there is low possibility of market recovery in 2020.

While the company sold thousands of land plots and street-front houses worth over VND3 trillion, it did not earn any money in the first five months of 2020.

The manager of a real estate firm in district 3, HCM City, said his firm had no new projects marketed in the first six months of the year, which was the worst period for the company in the last five years.

To minimize the risks caused by the cash shortage, the firm cleared stocks by selling at a discount rate of 20 percent.

Real estate distributors and brokers have also been sitting idle since the Tet holiday.

According to the deputy chair of the Vietnam Real Estate Broker Association, there were 1,200 real estate trading floors as of the end of 2019, including 500 in HCM City and 300 in Hanoi. When the pandemic became more complicated, 80 percent of the trading floors suspended operation in February, March and April, while most of the remaining opened only online.

Nguyen Loc Hanh, CEO of Ngoc Chau A Real Estate Investment JSC, commented that real estate firms are at high financial risks because of Covid-19. The pressure on cash flow will still last until the end of the year, or even longer, depending on the health of businesses.

The CEO said Covid-19 has weakened the purchasing power in the market, which is the biggest concern.

If the pandemic had not broken out, customers would have made payment for products for which they had registered and banks would still have disbursed money as planned.

But COVId-19 has slowed the cash flow. Clients, investors, banks and brokerage companies all lost liquidity temporarily, and they gave priority to keeping cash.

According to Hanh, during the 2008-2009 crisis, the market collapsed just after one “knockout” . During Covid-19, a battle with many rounds, businesses are getting worn down.

This article was originally published in VNA

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Finance

HCMC plans to build a new hi-tech industrial park in Binh Chanh

by Daisy Nguyen

HCM City Department of Planning and Architecture is planning to build a new hi-tech industrial park that covers 380ha in Binh Chanh District.

HCM City People’s Committee asked the department to review the current industrial and processing zones and find suitable lands to attract investments to the city and build the new hi-tech industrial park. The new park will be a new gathering place for hi-tech firms and support start-up companies.

HCM City Export Processing Zone and Industrial Park Authority (Hepza) will work with the department on how to deal with violations such as firms that operate not in accordance to their registered businesses.

Hepza must also report about suitable land that can attract immediate investment or for business expansion. They must propose solutions to violations and difficulties that firms may face.

HCM City has three processing zones and 16 industrial zones that cover a total 4,532ha. 17 of them have gone into operation in the past years. 1,716ha have been rented out. According to the plan, HCM City will have 23 processing and industrial zones that cover 5,822ha by the end of 2020.

Source: Dtinews

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Finance

Chinese people exploit legal loopholes to acquire land in Vietnam: defense ministry

by Daisy Nguyen

Chinese people are using more than 162,000 hectares of land in Vietnam by exploiting legal loopholes to establish joint ventures and pumping money for Chinese-Vietnamese citizens to acquire land in the Southeast Asian country, according to the Ministry of National Defense.

About 6,300 out of 162,000 hectares are land plots located in border and coastal areas, the defense ministry stated in a recent report submitted to the lawmaking National Assembly.

As of November 2019, a total of 92 businesses with 100-percent Chinese investment and 57 joint ventures were operating in border areas in 22 Vietnamese provinces and cities, the report highlighted.

The land lease period of these Chinese enterprises ranges from five to 50 years, the ministry elaborated, adding that most of the businesses specialize in such sectors as hospitality, tourism, entertainment, garment, aquaculture, leather shoes, children’s toys, and electronic components.

The majority of these firms are based in the central city of Da Nang, followed by Quang Ninh Province and Hai Phong City in northern Vietnam.

All of them were established in 2018 or earlier and had been granted business permits by Vietnamese authorities, the report added.

The Chinese-owned businesses have basically complied with Vietnamese law, it said, but several violations were still recorded, namely recruiting Chinese employees on tourist visas and hiring Chinese laborers without reporting to local authorities.

A more serious offense is Chinese-run companies operating under the guise of Vietnamese businesses.

Local authorities have also discovered hi-tech and drug-related crimes under the cover of business operations at many Chinese firms in Da Nang, Hai Phong, Quang Ninh, south-central Phu Yen Province, and the Central Highlands province of Kon Tum.

Some businesses were held responsible for causing environmental pollution in Hai Phong and north-central Ha Tinh Province.

Some other violations committed by Chinese employees include failing to declare temporary residence, working without permits, violence against Vietnamese colleagues, illegal marriage, and breaking workplace regulations.

Owning important land plots

The report also showed that 135 land plots in Da Nang were owned by, indirectly owned by, or leased to Chinese individuals and businesses between 2011 and 2015.

These pieces of land are located along major streets and the city’s coastline, playing a significant role in national defense and security.

In order to claim these land plots, the Chinese had established joint ventures with and pumped money to Chinese-Vietnamese citizens in the central city, the defense ministry explained.

At first, Chinese individuals would channel a small amount of capital into these joint ventures, letting their Vietnamese partners become the majority owner with a higher share of capital.

However, most of these Vietnamese contributed their capital in the form of land ownership.

The Chinese eventually raised their capital and gained control of the businesses, thus effectively ‘owning’ the land plots of their Vietnamese partners.

The municipality had ordered an investigation into such cases and vowed those responsible would be penalized.

Law amendments

According to Dao Trung Chinh, deputy general director of the General Department of Land Administration, foreigners are only allowed to buy houses in Vietnam, not land.

However, there is no law regarding foreigners possessing land via joint-venture operations in the country, Chinh admitted.

The Vietnam Land Law does not permit foreign investors to purchase land from Vietnamese citizens, an official from the Ministry of Planning and Investment told Tuoi Tre (Youth) newspaper.

To prevent Chinese nationals from taking advantage of legal ‘loopholes’ to possess land in Vietnam, the ministry is drafting several law amendments, which will require foreigners to register with provincial investment authorities if they want to purchase shares in enterprises that include ownership of land plots significant to national defense and security, he elaborated.

The purchase will be permitted if certain requirements are met, he added.

This will only solve the problem to an extent, the official admitted, adding that Vietnamese authorities must review the entire Land Law, Enterprise Law, Investment Law, and regulations relating to foreigners’ residency and movement for a long-term solution.

The Ministry of National Defense has asked the prime minister to order sectors and local administrations to examine all foreign-invested projects, especially those in border, coastal areas, and locations that play strategic roles in national defense and security.

Inadequacies of the Investment Law, Land Law, and the management of investment activities must be promptly detected and fixed to prevent any ‘loopholes’ from being exploited, the ministry stressed.

Source: Tuoitrenews

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Enterprise

Vietnam property market not hit hard by Covid-19

by Daisy Nguyen

The Ministry of Construction (MOC) said though the epidemic has affected the real estate market, causing a decline in supply and the number of transactions, real estate prices in some localities are still on the rise.

The ministry’s Q1 report shows that many real estate firms have retained 50 percent of staff for their fundamental operation, while many projects have been suspended.

In the first three months of the year, about 80 percent of real estate trading floors had to shut down or halt operation. As there were nearly no transactions, many brokers became redundant.

It is estimated that only 200 trading floors still operate, but at a moderate level. Durng the social distancing days in April, real estate developers and trading floors could not put products up for sale.

To settle the problem, some trading floors, including Vingroup and Cen Group, have launched online trading services. However, the online trading floors just serve as places for real estate developers to post information and introduce their projects.

However, commenting about the real estate market performance, MOC affirmed that the real estate market has not been affected seriously by the epidemic. The influences have been seen only in some market segments.

Regarding housing development projects, in Q1, 56 projects with 20,536 apartments were licensed. There were 997 projects with 233,313 apartments under construction, while 55 projects with 18,061 apartments were completed.

The supply of houses in Q1 decreased in comparison with the previous quarter and the same period last year. In Hanoi, the number of apartments to take shape in the future, eligible for sale, increased considerably thanks to the high number of products from Vinhomes’ huge projects.

In the long term, MOC predicted the supply would decrease.

As for tourism and resort real estate projects, five projects with 4,512 condotels and 476 resort villas were licensed, while 48 projects with 18,549 condotels and 3,359 resort villas were under construction.

Some real estate firms still continue their production and business activities. However, the progress and workload were greatly affected by the social distancing policy and the measures to prevent the virus spread.

MOC reported that 13,042 transactions were carried out successfully, including 1,167 in Hanoi (38 percent of Q4 2019) and 2,816 in HCM City (55 percent). The number of successful transactions in Q1 2020 was just 14 percent of total number of products available, a 4-year low which is just 40 percent of the same period last year.

Meanwhile, tourism and resort real estate have been in ‘hibernation’ with zero revenue of businesses in the sectors.

Surprisingly, house prices have still been increasing. In Hanoi, apartment prices have increased by 1.02 percent, while in HCM City, the figure is 3.5 percent.

Source: VNA

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Enterprise

Real estate companies are in the red due to Coronavirus

by Daisy Nguyen

The novel coronavirus SARS-CoV-2-caused acute respiratory disease (COVID -19) pandemic has cost many real estate firms trillions of VND from their market capitalisation value.

Dat Xanh Group Joint Stock Company (DXG) is one of those to have suffered the greatest impacts of the pandemic, leading falling share prices.
The price of DXG dropped strongly from VND14,300 per share on January 2, 2020 to VND7,770 on April 1, costing the group over 3.4 trillion VND (145.2 million USD) in its market capitalisation value.

LDG Joint Stock Company (LDG), has lost VND 1.13 trillion in market capitalisation value due to falling share prices during the outbreak. LDG has decreased from VND8,850 per share on January 2, 2020 to VND4,160 on April 1.

Meanwhile, An Duong Thao Dien Real Estate Investment and Trading Joint Stock Company (HAR) was at VND2,250 per share on April 1, down by VND1,700 compared to the beginning of the year. As a result HAR’s market capitalisation value has plunged 185 billion VND, reported Tien Phong (Vanguard) newspaper.

Hoang Quan Real Estate Joint Stock Company (HQC) also fell by VND 80 per share to VND1,070 per share on April 1 against the start of this year, with market capitalisation value declining by VND38 billion .

An Gia Real Estate Investment and Development Joint Stock Company’s (AGG) shares have also plummeted from VND30,400 per share on January 9 to VND26,500 on April 1. AGG has lost nearly VND300 billion in the last three months.

According to economist Nguyen Minh Hoang, the real estate market this year has been facing many difficulties due to low supply and the impact of COVID-19. Therefore, real estate stocks were unlikely to resume growth quickly so investors should be cautious.

In case you missed it: Vietnam reports 1 new Covid-19 patient on Sunday, total 241

Financial expert Bui Quang Tin from the Banking University of HCM City told Tien Phong that the domestic stock market was difficult to forecast for the next few months so investors should follow the market closely and avoid sell-offs or bottom-fishing.

“The stock market will have recovery when the pandemic ends. After this pandemic, enterprises will resume production and stabilise business activities. At that moment, capital in the stock market will increase and of course, share prices will surge,” Ten said. “But that is the prospect for the next 3-6 months.”

Meanwhile, Truong Hien Phuong, brokerage director at KIS Vietnam Securities Corporation’s branch in HCM City, said if investors were interested in real estate stocks, they should study who owned those shares and wait until the market had made reasonable adjustments to buy them, Phuong said.

Source: Dtinews

 

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Finance

Real estate, travel firms optimistic about tourism recovery after epidemic

by Daisy Nguyen

Vietnam’s tourism industry was growing at lightening speed when it was hit by the Covid-19 epidemic.

Phung Quang Thang, deputy chair of the Vietnam Travel Association, said the industry’s growth hit a record high in December 2019 and then tumbled in January 2020, and has fallen into crisis since then.

Travellers have cancelled tours, airline bookings and tour services. The loss to the tourism industry is estimated at tens of trillion of dong.

The Vietnam National Administration of Tourism (VNAT) several days ago organized a conference discussing solutions to cope with Covid-19. The participants were optimistic about recovery after the crisis.

According to Le Hong Ha, deputy CEO of Vietnam Airlines, 40 percent of passengers have cancelled tickets for domestic flights. About 40-50 percent of outbound travellers have cancelled flights. The figure is lower for European travellers planning to go to Vietnam – 10-15 percent.

The markets that have cancelled tours the most are China and Northeast Asia countries such as Hong Kong, Macau, Japan and South Korea (70-80 percent).

Vietnam Airlines is offering service adjustments within six months, especially applied to clients from epidemic affected areas.

Do Xuan Quang, deputy CEO of Vietjet Air, said while the air carrier has to stop all flights to China since February 1 as requested, it is moving ahead to open new air routes to attract passengers from potential markets such as India.

Vice president of Vingroup Le Khac Hiep said Vingroup wants to share difficulties with clients. It will reimburse most of the costs, or delay the service bookings of partners and travellers affected by the epidemic.

Vingroup’s accommodation facilities are ready to serve tourists who have to stay in Vietnam because of cancelled flights.

A representative of Sun Group said domestic clients account for 60 percent of total clients, therefore, the impact of the epidemic on the real estate firm is not too severe.

However, the group is planning to join forces with airlines to launch tourism products in sale promotion programs for the domestic market in March. Demand is expected to return quickly once the epidemic is controlled, he said.

Tran Trong Kien, chair of the Tourism Advisory Board (TAB) said the market of international travelers will need more time to recover than the domestic market. He suggested creating demand stimulus programs for all international markets and new programs when the conditions become favorable. Western Europe and North America will be priority markets.

Source: VNA

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Finance

Real estate remains attractive for foreign investors

by Daisy Nguyen

With $3.88bn invested, sector ranked second in FDI last year.

Real estate drew in $3.88 billion of registered FDI capital in 2019, ranking second after processing and manufacturing and accounting for 10.2 per cent of the total.

The Vietnam News Agency quoted the Ministry of Construction as reporting that the real estate market last year developed rather stably in terms of supply, transaction numbers, prices, outstanding credit, and foreign investment.

The Ministry predicted that “bubbles” in the market are unlikely in 2020.

However, it also forecast possible land price hikes in areas designated to become special zones or new residential areas with synchronous infrastructure, as well as in housing projects that are located in downtown areas, developed by prestigious investors, and with rapid construction progress and good infrastructure.

This is also the rule of the market, the Ministry noted.

Meanwhile, the market may witness a decline in certain segments due to supply-demand imbalances or difficulties in certain property projects, especially in the two largest metropolises of Hanoi and Ho Chi Minh City.

Source: Vneconomictimes

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Finance

Vietnam’s real estate market may suffer decline in 2020

by Daisy Nguyen

2019 was a tough year for the real estate market when many projects remained stagnant. However, the situation may be even more serious in 2020.

The overlapping and contradictory legal documents, complicated licensing procedures, unsuitable policies for social housing development, unclear legal framework for condotels and the decreased confidence of investors all have created a crisis in the real estate market.

The demand is very high, while real estate developers don’t have products to sell. A series of real estate projects have been frozen.

As a result, land and apartment prices have been pushed up. Meanwhile, real estate developers suffer as investment costs have increased. They have to pay more for bank loan interest rates. More seriously, they miss business opportunities.

Nguyen Tran Nam, chair of the Vietnam Real Estate Association, warned that the real estate market would meet difficulties in 2020 because of the problems in the legal framework, credit and capital safety.

“The bottlenecks in the legal framework cannot be settled immediately. Banks tend to tighten real estate credit and it will be more difficult to access land,” Nam said.

However, the problems of 2020 will be different from 2009-2010. At that time products were abundant but there were not many buyers, which led to high inventory level worth VND200 trillion. The figure has decreased to VND20 trillion.

“The crisis has shifted from oversupply to short supply, but the demand is very high and the cash flow is heading for the real estate market,” Nam said.

Sharing the same view with Nam, Nguyen Quoc Hiep, chair of GP Invest, said real estate firms are meeting difficulties because the spirit of the new laws still has not been enforced by state agencies.

The Law on Real Estate Business, the Planning and the Land Laws all have been amended with many changes related to land clearance, land use purpose conversion, auctioning and bidding. However, administrative procedures are still vague and overlapping.

Hiep thinks the real estate market in 2020 would still be quiet because of the lack of projects and new products.

The Hanoi authorities have recently changed the official land price frame in the city. As the land prices in all areas have increased sharply, real estate developers would have to pay higher for site clearance. Sales would also be difficult because of the high prices of products.

“The real estate price changes regularly because of the regular changes of the K coefficient. Before 2016, the land price accounted for 15-18 percent of the real estate product price, but now it accounts for 20-25 percent,” Hiep said.

By VNA
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