Vietnam skyscrapers, resort properties new draw for investors

A rendering of the planned new central business district in Ho Chi Minh City, including the 461.5-metre supertall skyscraper Vincom Landmark 81, to be completed in 2017. PICTURE: AtkinsBy Arno Maierbrugger/Gulf Times Correspondent/BangkokThe recovering real estate market in Vietnam is not just wooing foreign investors to invest in the country’s buoyant residential property market, this time investors are increasingly looking for modern office buildings and hospitality investment opportunities in touristic resorts.This is mainly a result of the amended Housing Law allowing foreign ownership of property in Vietnam, but also the new Real Estate Trading Law that allows foreign organisations not only to acquire offices, production facilities and other assets for their business activities, but also to transfer ownership of unfinished real estate projects to other investors. Both laws are in effect since July 1, 2015.Until July this year, the country’s property market already attracted $1.69bn in foreign direct investments (FDI) for 15 projects, according to Vietnam’s Foreign Investment Agency. This accounted for 19.3% of the total FDI capital of $6.92bn. In comparison, in the whole year of 2014 foreign investment in the sector amounted to $2.54bn or 12.6% of total foreign direct investment and three times the previous year’s figure. If this year’s inflows continue at the same or an even greater pace, a new record in property FDI beyond $3bn could be set in 2015, real estate experts say.  The booming market is inspiring property developers to stride towards massive developments formerly unknown to the country. For example, Vietnam’s economic hub of Ho Chi Minh City will see a new central business district that will house the country’s tallest skyscraper, the 81-story, 461.5-metre-high Vincom Landmark 81, designed by UK architecture firm Atkins and expected to be completed in 2017. The tower will exceed the height of other supertall skyscraper such as Petronas Towers in Kuala Lumpur, Guangzhou International Financial Center, Willis Tower in Chicago or Marina 101 in Dubai and be the centrepiece of the new Vinhomes Center Park, a $1.5bn high-class and multi-functional urban area at a prime location in the city facing the Saigon River. At its base will be a shopping centre, while the mixed-use development will also host a hotel and apartments. Investor is Vincom Group, Vietnam’s property development giant.“We are extremely proud to assist our client Vingroup — the most significant and active Vietnamese developer in the market — in developing international standards and creating landmarks that will be viewed as part of a modern and integrated Vietnam,” said Bertil de Kleynen, director of architecture and landscape for Atkins in Asia Pacific. The Landmark 81 will also surpass the Keangnam Hanoi Landmark Tower, currently the tallest building in Vietnam at 345 metres. The South Korean-invested skyscraper has been put on sale in May this year and interested buyers reportedly included Qatar Investment Authority (QIA) and Goldman Sach. However, QIA has later denied it would go forward with such a deal. Meanwhile, great opportunities are seen in the hospitality development sector, which includes beach resorts, beach villa communities and related properties. With Vietnam easing its visa rules, more tourists are expected to flow into the country, and a rising number of expats is on the lookout to invest into leisure properties, too. Moreover, statistics from business intelligence firm Boston Consulting Group (BCG) show that some three million Vietnamese are now in the middle-class bracket and thus financially capable of buying coastal property costing between $250,000 and $2mn per unit. BCG researchers even expect the number of middle-class Vietnamese to rise to 33mn by 2020. Big developer names in this sector include local firms Vincom Group, FLC, BIM Group, CEO Group and Sun Group, but a number of Japanese, South Korean and Middle East investors are also active. For example, Dubai-based developer Limitless is currently working on a $550mn residential and tourism project in Vietnam’s iconic Halong Bay, the Halong Star project.Others who are reportedly interested in investing in Vietnam hospitality, beach housing and related infrastructure projects are Dubai’s Nakheel and the Investment Corp of Dubai (ICD Group). Qatari Diar and Qatar’s United Development Company have also been mulling to invest into Vietnam property or infrastructure developments in the past.