Realty investors in mixed moves

Seeking funds for large property projects remains a hard questions for many developers

Some are pushing their project construction in face of the anticipated property market recovery this year while many others cannot foresee a bright future.

New City Properties Development Company, the developer of the $4.3 billion High Grade Tourism Complex in Phu Yen province has started building an internal road in the project while completing site clearance after two years since obtaining its  investment certificate.

The company’s general manager Frank Chueng said a hotel and entertainment facilities would be built this year as the site clearance was nearly completed.

Similarly, the Canadian-backed Asia Coast Development Limited is pushing the construction of Ho Tram Strip project in Ba Ria-Vung Tau, which had been delayed from 2008 till the first half of 2010.

The two companies reported they would speed up their projects in hope of Vietnam’s better economic performance this year after being hit hard by the global economic recession.

“The economic recovery creates good conditions for building property projects. We know Vietnam has a strong market potential and this is a right time to implement investments here,” said Chueng.

Malaysia’s Berjaya, also said it could start the construction of a $930 million financial tower project in Ho Chi Minh City in July 2011, after a two-year delay.

Berjaya’s $3 billion international university and township project in Ho Chi Minh City, which was licenced in 2008, is accelerating site clearance and slated for breaking ground at the end of this year’s second quarter.

Phuong Anh Phat, senior business development manager at Berjaya Vietnam, said the company had also begun site clearance and compensation for the $2 billion urban project in Dong Nai province.

Developers behind Yen So Park and North An Khanh Urban Area projects in Hanoi are also racing against the clock. Malaysia’s Gamuda Land, the developer of Yen So Park, said their apartments would be available for sale in the first quarter this year.

Despite signs of better economic conditions in 2011, many foreign realty developers are still urged by local authorities to quickly bring their projets into life.

Ba Ria-Vung Tau People’s Committee, home to some of long-delayed projects like Good Choice and Saigon Atlantis, is urging developers of those projects to implement their commitments.

An official at Ba Ria-Vung Tau Department of Planning and Investment said there was no evidence proving the investors would start construction this year. He said the developers were complaining slowness in site clearance as a main reason of the delay.

“We cannot help while doubting over their financial ability. While we are trying to implement site clearance for the projects, we want them to have concrete actions to implement their commitment,” he said.

The developers of Good Choice and Saigon Atlantis projects were not available for comments when contacted by Vietnam Investment Review.

The situations appear to be worse for some big projects in the central region’s Phu Yen and Binh Thuan provinces, as the two provincial People’s Committees recently announced to revoke investment certificates of the long-delayed Creative City developed by the US-based Galileo Investment Group and a project developed by the US-based South Fork Company, respectively.

Professor Nguyen Mai, chairman of Vietnam Association for Investment Enterprises, said even though the global financial crisis had ended, foreign property developers would very likely be difficult to find funds for large projects in Vietnam as financial institutions were still tightening their lending conditions.