Real estate sector enticing newcomers

Ton Dong A envisages either making a direct capital contribution, assigning its subsidiaries to invest capital, or forming a totally new firm. This is not the first time the company has considered putting money directly into real estate.

Last year, Ton Dong A tasked its member unit, Ton Dong A Danang Co., Ltd., to invest in a real estate project in the central region. The deal involved acquiring 95 per cent charter capital of SBC Mien Trung General Construction and Investment Trading Co., Ltd., the developer of a project building residential blocks in the SBC Mien Trung urban area.

Another steel firm, Vietnam Germany Steel Pipe JSC (VGS), is potentially injecting capital into the Viet Duc Legend City project in Binh Xuyen district in the northern province of Vinh Phuc, about 60km from Hanoi. According to VGS’s recent first quarter consolidated financial report, the company had invested $29.3 million as of March 31.

In addition, VGS is also investing in infrastructure at CC4 land plot in Van Canh new urban area in Hanoi’s Hoai Duc district, over an area exceeding 4,200 square metres.

Similarly, An Cuong Wood-Working JSC is building a new urban area worth approximately $387 million in the southern province of Long An.

The project, named Binh An Duc Hoa urban area, will be located in Duc Hoa commune, and requires $367 million in preliminary costs and the other roughly $20 million will be for site clearance and compensation.

Duc Thanh Wood Processing JSC is also mulling over a possible venture into real estate. The company is expected to receive a transfer of land usage rights and assets attached to industrial land in Binh Duong province’s Tan Uyen city, in a deal worth around $5.75 million.

"Buying property at this time not only generates a stable rental income, but also promises to bring high returns when conducting a transfer in the future," said Le Hai Lieu, Duc Thanh Wood's chairwoman.

According to economic expert Dinh The Hien, there are multiple factors as to why real estate is attracting more opportunists.

"First, at this difficult time, many real estate firms have chosen to sell part of their assets for product restructuring and to focus resources into developing their distinct items. Then comes the internal issues. For instance, when production firms reach a certain point in their development, they want to expand into new fields to seek new profit streams," said Hien.

Other opinions suggest firms are investing in real estate to take advantage of the new opportunities that will arise when three new real estate laws, the 2024 Land Law, the 2023 Law on Housing, and 2023 Law on Real Estate Business, take effect on the revised date of August 1 instead of the initially proposed January 2025.

These new laws seek to refine mechanisms that will ensure the healthy and sustainable development of the property market.

Duong Thanh Thuy, deputy chairwoman of the privately owned Trung Thuy Group, suggests that the legal aspect is not the sole issue for real estate firms, which she sees as positive progression, but that property firms also need to be smarter about self-reliance.

"Each firm needs to perform their functions properly. They must be calm when seeking exits, and not cause unwarranted chaos in the market. This will ensure brighter prospects in the sector for all," said Thuy.

Experts upbeat about real estate prospects Experts from top real estate consulting companies in Vietnam have expressed optimism about development prospects of the real estate market, particularly regarding the office and industrial segments.

Real estate 'golden triangle' heats up The 'real-estate fever' in the 'golden triangle' of Ho Chi Minh City-Binh Duong-Dong Nai has been attributed to Ho Chi Minh City's price pressures and the building of key transportation infrastructure developments, with many new projects that connect the southeast economic region with other areas implemented since the start of the year.

Real estate still beguiling investors Although the real estate market continues to struggle along, the fact that more products are being offered for sale, attracting the interest of buyers, illustrates that it will continue to bring profits.