Investors look to kick start real estate market

Saigon Jewellery Holding Company (SJC) is applying for a licence to set up a joint venture with Malaysia’s MTD-SADEC to invest $46 million in a complex at the intersection of Le Loi, Nam Ky Khoi Nghia, Le Thanh Ton and Nguyen Trung Truc in District 1.
The two companies plan to build a mixed-use property with hotel, apartments, restaurants, offices and conference facilities for lease and sales.
The planned joint venture will have capital of $13.8 million, of which the local partner will chip in 40 per cent through land use rights on a 2,000sq.m site, with the Malaysian partner contributing the rest.
The project intends to borrow $32.2 million from foreign and domestic institutions and foreign partners pledge to help the joint venture arrange the loans. Apartments will go on sale one year after it receives the investment licence, and building will finish within three years since it finishes site clearance on time.
Singapore developer CapitaLand is also seeking approval from the Ministry of Planning and Investment for a joint venture with two local companies, aiming to invest $40m in a residential complex for sale.
CapitaLand is expected to join Phu Gia real Estate and Commercial Construction Co and Thien Duc Trading-Construction Company to develop a 2.3ha site along the Hanoi Highway in the prime residential An Phu Ward, District 2.
Subject to planning and other approvals, the joint venture plans to build 300 apartment units with a gross floor area of 40,000sqm in the first phase of the project.
CapitaLand will take the lead in forming the development design and project management. Two other phases in the project are in the pipeline.
Meanwhile, Korean company IDE Vietnam has expressed interest in building a residential complex for sales to low and middle income earners and a general hospital in Binh Tan District at a cost of $25m.
A number of foreign-invested housing projects have been licensed in the southern economic hub as well, including the $15m Saigon Pearl, the $130m Saigon Sports City, the $35m Riviera Saigon and $29m Daewon Hoan Cau.
Local developers are finding it hard to continue multi-million-dollar housing developments in the city, as local banks are exercising caution over property lending over fears of a downturn in housing prices.
Housing sales in the city have slowed over the last two years after government issued a set of regulations to curb skyrocketing real estate prices.



No. 771/July 24-30, 2006