Mitsubishi joins Vietnamese housing market

The Manor Central Park

According to a press release posted on the company’s website, Mitsubishi is going to work with Vietnamese partner Bitexco Group of Companies (BITEXCO), the developer Vietnam’s highest tower, the Bitexco Tower in Ho Chi Minh City. The partners are going to develop part of BITEXCO’s The Manor Central Park, a mixed-use development project.

The Manor Central Park is located in Hoang Mai district, eight kilometres southwest of Hanoi’s downtown, and will include residential, commercial, office, school, and sporting facilities on an overall area of nearly 90 hectares.

During the first phase of cooperation, Mitsubishi and BITEXCO will establish a joint venture to develop 240 low-rise housing units and two high-rise condominiums (comprising of 1,036 apartment units), out of the total 1,000 low-rise units and 7,700 apartments in 17 high-rise buildings. The Japanese group will hold a 45 per cent stake in the venture, while BITEXCO will hold 55 per cent. The two sides will put forward a total investment capital of about ¥30 billion ($284 million) for the first phase.

Construction is expected to start in August 2016 and the first unit may go on sale as soon as October.

“With steady economic growth and an expanding middle class, the Vietnamese market is expected to continue seeing an increase in the demand for housing. Amendments to the housing law made in July 2015, that loosened restrictions on the purchase of real estate by foreigners, are also likely to provide a boost to the housing market,” said Mitsubishi Corp’s statement.

In Hanoi, BITEXCO has another mixed-use development project, named The Manor My Dinh. Located between the downtown and Noi Bai international airport, the project includes offices, apartments, shophouses, and villas on a 42,000 square metre site. Construction of the VND4.5 trillion ($180 million) development started in 2005 and was finished in 2007.

Mitsubishi Corp thus became the latest in a wave of foreign developers to target the growing middle class of Vietnam, while at the same time cashing in on the Vietnamese government’s new policies that ease the rules for foreigners to own property in the country.

Other notable projects include Daewoo Engineering & Construction’s $2.2 billion Starlake New City project near West Lake in Hanoi, which targets wealthy locals and Koreans working in and around the city. Another highlight would be Tokyu’s $1.2 billion Tokyu Binh Duong Garden City in the southern province of Binh Duong, north of Ho Chi Minh City.

By amending the laws on Housing and Real Estate Business in July last year, the Vietnamese government lifted a number of ownership restrictions for foreigners. According to data released by Ho Chi Minh City Real Estate Association, since the new laws took effect, more than 1,000 transactions were made by foreign clients to purchase properties in Ho Chi Minh City, compared to the 250 transactions made in the entire country during the 2009-2013 period.