Foreign funds sought in Vietnam market

CA - Foreign investors have plenty of opportunities in the Vietnamese domestic market, as developers are facing difficulties getting bank loans and buyers.

According to Marc Townsend, managing director of CB Richard Ellis Vietnam, South Korean buyers have been returning to the market after leaving in 2008. Russian and Chinese investors have also been expressing interest in the market.

A senior executive of developer Sacomreal said there has been foreign interest in the first half of this year about its project, reported VietnamNet. Foreign companies it has spoken with include Mapletree investments, a subsidiary of Singaporean Temasek Holdings; South Korean Sung Chang, which expressed interest in retail projects; and Israel’s Engellnvest.

The analsysis director of Savills Vietnam, Su Ngoc Khuong, has received inquiries from domestic developers hoping to link with foreign funding. He said the number of cases in which domestic investors use the company’s consultancy services has increased by 20 per cent.

He also said investors from South Korea, Japan and Singapore have expressed interest in apartment, villa and office projects. According to Khuong, it takes approximately one to two years for a transaction to be completed.

While new foreign investors still keep cautious when approaching the Vietnamese market, the experienced investors have been trying to expand their investment portfolios.

Singaporean CapitaLand, for example, has purchased 70 per cent of the stakes of the residential quarter project in Binh Trung Dong ward in district 2 of HCM City from Khang Dien Saigon. The project is expected to cover an area of 2.9 hectares, which will contain 974 apartments. Of the total investment capital of US$70million, CapitaLand is holding 70 per cent of the capital contribution, while Khang Dien is holding the other 30 per cent.

Just two weeks later, the group made another deal when it purchased 65 per cent of stakes of Quoc Cuong Saigon at US$5.8million. Quoc Cuong Saigon possesses a 9000 square meter land plot in Binh Chanh district in HCM City, which currently has a license for developing an 800-unit apartment.