Japan ventures in realty

illustration photo source: cafef.vn

Japan’s Meade Group, the contractor of the Ho Chi Minh City Metro Line’s Ben Thanh-Suoi Tien stretch, last week revealed its plan to invest in a $30 million high-end project called Wateria Suites in Ho Chi Minh City’s District 2.

Earlier, Daiwa House Industry, Nomura Real Estate Development, and Sumitomo Forestry were licensed to develop a $220 million condominium project named Midtown in Ho Chi Minh City’s District 7. Midtown is the largest foreign direct investment property project in the first eight months of this year in Vietnam.

With construction starting in early 2017 and a finish date in 2019, this project will add around 1,100 units in five buildings to the market.

“As Vietnam continues to enjoy economic growth, the need for condominium housing is growing. Especially with the enactment of the Revised Housing Law in July 2015, the restrictions on real estate purchases by foreigners have been eased, which is expected to lead to further growth in the housing market,” said a representative from Daiwa.

Kajima Corporation, one of Japan’s biggest builders, has entered a new joint venture with Indochina Land to develop a range of property projects in Vietnam.

The new venture will pour around $1 billion in the next 10 years into the Vietnam property market, and will initially focus on urban residential projects in Hanoi, Ho Chi Minh City, and Danang – the markets with the biggest property potential in Vietnam. Four projects under this venture will be launched within the next 12 to 15 months, with a combined investment capital of $100 million.

Keisuke Koshijima, head of Kajima’s overseas division, said Vietnam is considered a market with great potential in the region and a core market for the company in particular. “We have studied the market and see an increasing demand for mid- and higher-income properties. Then we decided to join with Indochina Land to take this opportunity,” Koshijima told VIR.

Mitsubishi Estate, another famous Japanese property developer, has recently diversified its portfolio in Vietnam by buying into a property development project in Hanoi, which has a total investment of up to $1.9 billion.

Both Kajima and Mitsubishi are targeting high-income earners in Vietnam.

Mitsubishi became partners with Vietnamese real estate firm Bitexco Group after acquiring a 45 per cent stake in the first phase of The Manor Central Park project in Hanoi’s Hoang Mai district.

In the first phase, the two sides will spend $285 million building 240 low-rise buildings and two condominiums offering 1,036 apartments. The project’s total construction will include 17 condominiums – containing 7,700 apartments – and 1,000 low-rise houses. Final construction costs are estimated at $1.9 billion.

Mitsubishi cited a rising demand for housing in recent years as its motivation for investing in the project. The number of residences sold in the capital doubled to 20,000 last year.

Other investors from Japan include Creed Group, Hankyu Realty, Nishi-Nippon Railroad, EXS Capital, and Sanyo Home.