Recovery leads to rush in Vietnam’s real estate market

Japan’s Creed Group, a real estate firm specialising in principal investment and property development, has recently signed a contract to invest $200 million in An Gia Real Estate Investment and Development JSC to develop Japanese style houses in Ho Chi Minh City.

According to Masakazu Yamaguchi, chief representative of Ho Chi Minh City-based Creed Holdings, the fund first came to Vietnam in 2012, however, business did not begin until 2015, when the market recovered. In 2014, Creed acquired its first local partner - 577 Investment Corporation. The partnership included a bond subscription to develop the City Gate Towers project, buying new shares issued by 577 Investment.

In 2015, Creed continued to expand, partnering with An Gia Investment to develop new residential projects at a 50:50 ratio, providing loans and purchasing shares in the company.

“Vietnam has a very young population that is mostly concentrated in urban areas. Housing demand will continue to grow in the future. With new regulations relating to land and housing becoming more open and relaxed, this will create more opportunities for foreigners to buy houses and investment opportunities for foreign investors,” Yamaguchi said.

Also from Japan, Tokyu co-invested with Vietnam’s Becamex IDC in the Garden City, a residential project in the southern province of Binh Duong, with the total investment of $1.2 billion.

VinaCapital has recently poured $15 million into Novaland and Warburg Pincus further invested $100 million in Vincom Retail, increasing its total investment in the company to $300 million.

Meanwhile, the UK-based Denver Power has joined with Tien Phuoc and Tran Thai joint stock companies to invest in the 86-storey Empire City in Ho Chi Minh City, with the total investment capital of $1.2 billion.

“100 per cent foreign ownership of publicly listed companies in non-sensitive sectors will be permitted beginning on September 1, 2015, which will only serve to boost property acquisitions by international investors,” said Marc Townsend of CBRE Vietnam, adding that Japan, Singapore, South Korea and Hong Kong had been the most active in Vietnam’s real estate sector, and investment would only increase in light of the new regulations.

Vietnam’s property market attracted $1.69 billion in foreign direct investment (FDI) for 15 new projects in the first seven months of 2015, according to the Foreign Investment Agency. This figure accounted for 19.3 per cent of the country’s total newly-registered FDI during the period.