Singaporeans expanding investment into real estate

Singaporean investors continuously lead in the development of housing, urban and industrial real estate projects. Photo: Le Toan

Vietnam has been an important location for real estate investors in Singapore over the past few decades, with prominent big players including Sembcorp Development, CapitaLand, Keppel Land, Frasers Property, and Mapletree. Singaporean investors have built hundreds of high-quality housing projects, serviced apartments, and offices for lease that are generally well received by consumers.

After 27 years of operation, CapitaLand Vietnam’s portfolio comprises two integrated developments, close to 8,600 quality homes across 15 residential developments, and one retail mall as well as over 7,500 lodging units in 31 properties across 10 cities.

Multi-functional real estate developer Frasers Property Vietnam is meanwhile developing and operating a range of projects including Melinh Point, a Grade A boutique office building in District 1 of Ho Chi Minh City, and Q2 Thao Dien – a luxury mixed-use development in Thu Duc city. Frasers Property’s hospitality business also has a presence in Vietnam, with Fraser Suites Hanoi and Capri by Fraser in Ho Chi Minh City.

Elsewhere, Keppel Land is developing a quality portfolio mainly in Ho Chi Minh City, including Grade A offices, residential properties, retail malls, and integrated townships. The group is developing Saigon Sports City, a 64-hectare integrated community-centric township situated in prime Thu Duc city.

According to Keppel Land, the venture will feature comprehensive facilities such as a one-stop lifestyle hub for sports, entertainment, shopping, and dining offerings, and pedestrian-friendly public spaces such as a waterfront boulevard and a multi-purpose town plaza.

Other famous Singaporean developers are also present in Vietnamese real estate, such as City Development, GuocoLand, and Kusto Home.

In addition to housing development and urban areas, industrial real estate is also a significant investment attraction from Singaporean investors.

Typical in this field is Vietnam-Singapore Industrial Park (VSIP), a joint venture between domestic Becamex IDC and a consortium of Singaporean investors led by Sembcorp Development.

Established in 1996, VSIP is now operating a total land fund of more than 8,600ha, including industrial, urban, and service land with the total investment of $15 billion, creating jobs for 250,000 domestic and foreign workers.

In addition to various industrial parks, VSIP is also a pioneer in constructing urban service areas and commercial zones, which are synchronously planned along industrial zones. The group has been developing dozens of such projects to serve the local community of experts, workers, and residents of the parks.

Meanwhile, Mapletree Investments Pte., Ltd. as of March 2020 owned and managed over $719 million in assets in Vietnam, with a portfolio spanning from Hanoi, Ho Chi Minh City, Binh Duong, and Bac Ninh, with eight real estate and logistics projects.

Another investor, Boustead Projects Ltd., launched the first ready-built factory project in Nhon Trach 2 Industrial Park in 2018. It is currently implementing the second phase, which is expected to complete and welcome tenants in this quarter.

Expanding segments

Singaporean financiers who previously only invested in housing development in the Vietnamese market have expanded their portfolio to the logistics and factory warehouse segment.

The aforementioned Frasers Property Vietnam has announced its latest project to develop an industrial park in Binh Duong province. The developer is rushing to complete about 40,000 square metres of ready-built factories in Binh Duong Industrial Park (BDIP) and hand over to tenants in the second quarter of 2022. BDIP will bring a total of more than 200,000sq.m of rental factories of all kinds and perfect utilities to the market in the next 6-7 years.

CapitaLand is also planning to dive into the industrial real estate segment. Ronald Tay, CEO of CapitaLand Vietnam, said that the merger with Ascendas-Singbridge in 2019 has contributed to strengthening the capacity and foundation for the development of logistics assets and industrial parks, which will be one of the main drivers for the Vietnamese economy over the medium and long term.

“By leveraging deep local expertise and networks, we are making efforts to grow a portfolio of these facilities both in the north and south of Vietnam,” said Tay.

In September 2020, Ho Chi Minh City Export Processing and Industrial Zones Authority awarded an investment registration certificate to SG Logistics JSC for its project in Tan Phu Trung IP, with a total area of nearly 20ha of land and the investment capital of $80 million.

In May, Emergent Vietnam Logistics Development Pte. was licensed to develop a logistics centre worth $34.4 million in Binh Duong province. When completed, this project will provide logistics, storage and warehousing services, warehouse rental, and workshops for the country’s southern areas.

Real estate brokerage

Along with developing real estate projects, Singaporean investors have also recently expanded their investment portfolio to real estate brokerage.

In 2020, APAC Realty, one of the region’s primary franchisees holding real estate service providers for 17 countries in Asia-Pacific, invested $1.1 million in ERA Vietnam, a broker with a network throughout Ho Chi Minh City, Danang, Binh Duong, and Dalat. It is committed to supporting two preferential interest rate loans equivalent to $2.2 million for partners. ERA Vietnam is an American real estate brokerage brand that entered Vietnam real estate under a franchise in 2017.

Assessing that Vietnam has high potential with the third-largest population in Southeast Asia, APAC Realty chose to invest directly in ERA Vietnam, a real estate broker with distribution systems in many major cities, to increase its presence.

The Vietnamese market has also been exploited by real estate technology company PropertyGuru and the brokerage PropNex.

PropertyGuru has partnered with Dai Viet Investment and Technology JSC to develop the website batdongsan.com.vn in the country, while PropNex focuses on introducing and marketing residential and commercial products in Vietnam to Singaporean buyers who have increased their interest in the potential of Vietnam’s real estate market in recent times.