The expected high rate of return, at 20%-30% per annum for investments in the Vietnamese housing market, is attrating many foreign investors.
Vo Van Hoan, chief secretariat of the Ho Chi Minh City People’s Committee, said there were new investment flows from Japan heading for Ho Chi Minh City. A report on foreign direct investment (FDI) showed that Japan was among top three foreign direct investors in the city in the first 10 months of the year.
Many Japanese names have become known in Vietnam’s property market, including the Creed Group, which invests in apartment projects (City Gate Towers in district 8 and River City in district 7), and Hankyu Realty and Nishi Nippon Railroad, which with Nam Long develops the Flora Anh Dao apartment project and Fuji Residences in district 9.
As soon as the project on subway route No 1 from Ben Thanh to Suoi Tien began, several other Japanese names turned up. These include Toshin Development, which plans a Ben Thanh underground shopping center.
Global Group last September signed a cooperation agreement with Nha Mo JSC to develop a project in district 8 called Dream House Palace.
Le Quoc Duy, president of Tien Phat Corp, has confirmed that his company would sign a contract with Pressance Corporation, under which the two sides will establish a joint venture to develop housing projects in Ho Chi Minh City.
In the immediate time, the two sides would buy a project and build 500 apartments with total investment capital of VND1.2 trillion.
This is the second time Tien Phat cooperates with Japanese investors. Prior to that, in May 2016, the enterprise joined forces with Sanyo Homes to develop high-end apartments at Ascent Lakeside project in district 7, capitalized at US$25 million.
They are preparing for the next apartment project, located in district 4.
Taiwan and Singapore are two other names in top three foreign investors in Ho Chi Minh City’s property market. There are also other investors from Asia – Hong Kong and the Republic of Korea.
CapitaLand, through one of its subsidiaries CapitaLand Vietnam Holdings, has bought a project in Cau Kho ward in district 1 in a deal worth US$51.9 million.
The project, to have 300 apartments, is expected to become operational in 2018.
By June 2016, CapitaLand’s total assets in Vietnam had reached 748 million Singapore dollars, while Vietnam became the second largest market in ASEAN, after Singapore and Malaysia.