VIETNAM REAL ESTATE THE INVESTMENT WAVE FROM · PDF filetwo 4-star hotels in Hanoi and Ho Chi Minh City was the only ... According CBRE, ... VIETNAM REAL ESTATE: THE INVESTMENT WAVE

VIETNAM REAL ESTATE THE INVESTMENT WAVE FROM JAPAN

FY 2017

Competitive landscape of Vietnamese real estate market with the participation of Japanese investors

TABLE OF CONTENTS

OVERVIEW OF THE MARKET ____________________________________________________________________________ 1

Desire for a symbolic project _____________________________________________________________________________________ 1

Still favoring high-end projects … ________________________________________________________________________________ 1

… But starting to eye mid-end and affordable segments ________________________________________________________ 2

PROJECT LIST _____________________________________________________________________________________________ 5

PROJECT MAP ___________________________________________________________________________________________ 12

CONTACT INFORMATION ______________________________________________________________________________ 13

VIETNAM REAL ESTATE: THE INVESTMENT WAVE FROM JAPAN

Page 1

OVERVIEW OF THE MARKET

Investors from the land of cherry blossoms, who are classified as the most conservative and cautious

investors worldwide, are taking strong steps into Vietnamese real estate market.

DESIRE FOR A SYMBOLIC PROJECT

Back to 1990s, despite of huge investment into processing,

manufacturing or mechanics, Japanese investors seemed to be

cautious in real estate field. At that time the brand Nikko with

two 4-star hotels in Hanoi and Ho Chi Minh City was the only

Japanese-invested project in Vietnam.

Desire for a breath-taking property project deserving to be a

destination for Japanese investors still remained.

In 2007, Riviera Group was being offered land in Me Tri to

develop Lotus Hotel Project (worth $500m) which, if

completed, would be the biggest hotel in Hanoi at that time with luxury design & 500 premium rooms.

However, Japanese investors missed this project. In 2009, Riviera Group submitted to withdraw due to lack

of capital and other financial issues. This project was later passed to another local investor.

When the Vietnamese real estate market recovers. Japanese investors start coming back for investment.

According to a recent study by CBRE Vietnam, among investors seeking opportunities in Vietnamese real

estate market, Japan ranked no.1 with 22%, followed by Singapore 17%, South of Korea 14% and USA 8%.

This shows the attraction of the Vietnamese real estate market. In 2015 – 2016, there are a number of big

property groups from Japan paying interest in local market with activities like partnering, M&As.

STILL FAVORING HIGH-END PROJECTS …

Coming back to the Vietnamese real estate market, high-end property projects remains the first priority of

investors from Japan.

In the third quarter, Ho Chi Minh City real estate market witnessed the partnership between Maeda and

Thien Duc Corporation to develop Waterina project in district 2. Maeda is in charge of construction of

underground section of the Metro line Ben Thanh – Suoi Tien in District 1, HCMC. In term of housing

development, Waterina is the first premium apartment projects of Maeda in the Vietnam market.

According to a consulting agency, Maeda conducted market research of the market years before officially

entering the high-class apartment segment.

Recently, Kajima Company has set up a joint venture with Indochina Capital Vietnam with total capital of

$1b to develop a series of luxury housing, hotels and resorts in Hanoi, Da Nang and HCMC.

Japan is the second biggest

investors in 112 countries having

projects in Vietnam

Until now Japan has had 3,200

projects in Vietnam with total

registered capital of $42b.

(Source: Foreign Investment Division)


Page 2

Keisuke Koshijima, Director of overseas business development of Kajima, said that Vietnam is one of the

focal market for luxury projects of Kajima.

“The Vietnamese real estate market has big potential for high-class segment and we consistently pursuit this

segment in Vietnam in the years to come”.

One of the notable investors of Japan, Tokyu Company established a joint venture with Becamex IDC to build

and develop the Binh Duong Tokyo Garden Urban Zone Project in the new city Binh Duong, 30 km from

HCMC. With the total investment of $1.2b and 110 ha area, this zone, when completed will have

approximately 7,500 apartment, commercial, services & office zones.

Similarly, Mitsubishi Group signed a MoU with Bitexco to set up a joint venture to develop a housing project

with the investment of $290. 176-years construction group Kajima from Japan also set up a joint venture

with Indochina Capital with total investment of $1b in upcoming 10 years. The contribution rate of the

venture is revealed to be 50-50.

In 12-15 months, the venture will start 04 premium real estate projects in HCMC, Hanoi and Da Nang.

According to Indochina Capital, these 04 projects have been shortlisted from 50 potential in the Vietnamese

market. At the beginning, this new venture will focus in luxury projects such as resorts, service apartments,

hotels and housing.

Previously, in Hanoi, Daibiru Group has also completed purchase of CornerStone office building which is a A-

graded project based in the center Hoan Kiem District with the price of $61m.

Recently, Nha Mo JSC has signed a partnership contract with The Global Group – an investor, developer and

operator in Japan. With the total capital of $50m, Dream Home Palace will be the first project of these two

investors in Vietnam. The Global Group will bring technology and expansion experience into construction

process and transfer Japanese-standard operation and management procedures.

Hidekazu Nagashima, Chariman of The Global Group said that this group took great interest in the

Vietnamese real estate market since 2008-2009.

“The Vietnamese market has great potential and definite similarity to Japan years ago. In 03 recent years, we

have conducted deep market research in HCMC real estate market and terms and conditions of partnership

with land companies in Vietnam, especially in medium and luxury segmentation”.

… BUT STARTING TO EYE MID-END AND AFFORDABLE SEGMENTS

Not only emphasizing high-end projects, Japanese investors also commits to deep investment in developing

mid-end and affordable housing projects, meeting the biggest housing demands in Vietnam for now.

In 2014, Creed Group woke up the whole market with the deal investing into a series of projects in HCMC

such as City Gate Towers, Angia Skyline and River City. Apartments in these projects have been on sales with

affordable prices (from 1 billion VND per unit) for Vietnam buyers.


Page 3

Toshihiko Muneyoshi, Chairman of Creed Group believed that Vietnamese economy with deeper and deeper

integration will attract more global investors.

“HCMC is a dynamic city with population of 12 million but housing stocks are still limited. That’s a big but

unexploited market. Besides, allowing foreigners to buy house in Vietnam is a breakthrough to boost growth

of the housing market”.

Two other investors from Japan, including Hankyu Realty and Nishi Nippon Railroad invested in Nam Long

Company to develop 03 mid-end housing projects in HCMC. Especially in the third project named Kykio

Residence, Nam Long and Japanese partners will develop additional social housing with the Ehome-S

project, pricing at only 600 million VND per unit.

This is the third consecutive project Nam Long associates with Japanese partners after Flora Sakura and Fuji

Residence.

Based on the signed contract, the capital contribution rate between two Japanese investors and Nam Long is

50% - 50% to conduct the project Kikyo Residence in 02 years. Kikyo Residence, with total capital of 630

billion VND, is one of the most important projects of Nam Long in 2016 – 2017. The project includes 110

villas and 234 apartments in the area of 17.5 ha, belonging to Nam Long Investment JSC (under Nam Long).

In the field of real estate services, Hoa Binh Housing Company set up a joint venture with Okamura Home

Group and Sanyo Homes, specializing in management and operation of real estate projects. Sanyo Homes is

also the official partner of Tien Phat Company in the high-end development project Ascent Lakeside in

HCMC recently.

In the channel of private investment, Frasers Centrepoint Ltd (FCL Singapore) purchased 70% stakes in G

Homes projects from An Duong Thao Dien Group.

Mirae Asset (South of Korea), partnering with AON BNG Group, paid $350m to acquire Keangnam Hanoi

Landmark Tower.

In addition, in 09 months, big players such as Lotte, Mapletree announced to deep investment into

outstanding real estate projects in the West of HCMC. Recently, the market witnessed one more huge

transaction of a personal investor. A foreign billionaire paid $15m to buy a beach villa in Da Nang.

In a seminar on real estate market in HCMC, Marc Townsend, Managing Director of CBRE Vietnam received a

series of questions about the FDI wave in Vietnam,

Marc Townsend confirmed that foreign investors’ interest in HCMC, Hanoi and surroundings was big. “The

taste” of these investors is to hunt opportunities to develop housing projects with good locations linking to

downtown or in-operation assets which can bring stable cash flow.

However, the expert also said that most of foreign investors didn’t jump into quick decisions but spent

resources to make through market research before action.


Page 4

According CBRE, approximately 6% of newly-registered and additional FDI capital are into real estate.

Foreign investors have had positive responses to the market.

The strong wave of foreign investment into Vietnamese real estate market was attributed to 02 reasons.

Jones Lang LaSalle evaluated that the attraction to the foreign investors was due to the basic KPIs of the

market, which are high urbanization level, young population, gradual increase in expected income, stable

economy growth, the rising of middle class, etc. Besides, the Government’s attempt to improve transparency

index in the property industry played an essential role in attracting foreign investors.

According to the GRETI report in 2016 by Jones Lang LaSalle, Vietnam’s rank is rather low in term of the

property market’s transparency level, standing 68/109 nations.

However, compared with years ago, Vietnam image has been improved gradually.

Currently, foreign investors can easily approach information of the market and legal frameworks. Domestic

project developers has strong advance in applying technologies. These 03 factors contribute greatly to the

transparency of the real estate market in Vietnam.


Page 5

PROJECT LIST

Type Time Japan Vietnam Project information

Hotel 2007

[HANOI] THE LOTUS HOTEL

The Lotus Hotel project southwest of Me Tri Commune at a prime location

on Pham Hung Road near the National Convention Center.

Riviera, which beat South Korea’s Keangnam Group and five other bidders

to win the high-profile five-star Lotus Hotel project over two years ago,

finally decided to quit the costly plan.

Under Riviera’s initial plan, construction on the project was scheduled for

completion later this year or early next year, but in fact the project is still

on paper now. As soon as Riviera announced its withdrawal from the

project a few months ago, a host of domestic investors have expressed

their readiness to develop the project.

Residential 9/2014

[HCMC] CITY GATE TOWERS

Last October, a shareholders’ meeting at locally-owned Nam Bay Bay

approved regulations to fulfill the commitments it made with its Japanese

partner, Creed Group. Earlier, Nam Bay Bay announced a programme with

the Creed Group under which both would pour investment capital into

Nam Bay Bay’s projects and share profits.

Creed Group has committed to injecting VND600 billion ($27.27m) into

the projects by purchasing convertible bonds issued by Nam Bay Bay.

Besides the City Gate Towers, Creed Group has undertaken two other

projects – NBB Garden II in Ho Chi Minh City’s Binh Chanh district, and

NBB Garden III in district 8.


Page 6

The Japanese investor is contributing 50 per cent of the total investment

capital into every project. The NBB Garden III is projected to have an

investment capital of VND3.8 trillion ($172.72 million).

Residential 4/2015

[HCMC] FLORA ANH DAO

In April 2015, Nam Long Investment JSC (HOSE: NLG) has officially

announced the development of Flora Anh Dao project in partnership with

Japanese investors, including Nishi Nippon Railroad Hankyu Realty - the

Project under the new product line Flora for people of middle and stable

income in District 9, HCMC.

Flora Anh Dao project is located in Nam Long Phuoc Long B residential

area very convenient for transport and trade development with key

economic regions in the South. The project is adjacent to the large

infrastructure ones in key economic regions in the Southeast, and has

been implemented and controlled by the government in recent years,

such as Ho Chi Minh City - Long Thanh - Dau Giay highway, Ring Road 2,

Thu Thiem Bridge and Tunnel, Metro Line No. 1 Ben Thanh - Suoi Tien.

Flora Anh Dao is a 16-story building with 500 apartments located in an

area of 1.1 hectares in a residential area in Nam Long-Phuoc Long B with

a total area of 16 hectares. Building density is only 28% of the whole area.

Expected price is 18.9 million VND per m2.

Residential 7/2015

[HCMC] ANGIA SKYLINE

Creed Group and Angia Investment partnered to invest $200m into the

project Angia Skyline. The launching event in 10/2015 attracted 1,500

customers with 300 apartments being sold out.

In addition to the project’s favorable location (next to Saigon River and

Phu My Hung urban zone), Angia Skyline is very competitive with

professional design, construction and service quality manager. The

http://angiaskyline.vn/


Page 7

building density only accounted for 24% in the total area of 63,348 m2

(480 apartments). Constructors are reliable and popular locally, such as

Coteccon Group, Apave and Savills.

Residential 3/2016

[HCMC] RIVER CITY

In the beginning of March 2016, the venture of Phat Dat Real Estate

(PDR), An Gia Investment and Creed Group invested $500m into the

project River City (formerly EverRich 2) in District 7, HCMC with scale of

8,000 units and area of 11,25 ha. Among those, PDR contributed 50% of

the total capital.

Accordingly, this venture will develop the project, targeting to complete

sales in 2-3 years. River City is planned to be completed by 2020.

Residential 5/2016

[HCMC] ASCENT LAKESIDE

Tien Phat Investment Corporation and Sanyo Homes Corporation from

Japan officially signed a strategic cooperation agreement to jointly

develop real estate projects in Vietnam.

The first joint development between the two companies

is Ascent Lakeside (a part of Lakeside Towers project), located in front of

Nguyen Van Linh Boulevard, Tan Thuan Tay Ward, District 7. The project

has scale of a 22-storey building, GFA of approximately 28,000 m2, offers

108 apartments and 72 officetel units. Total project cost is about $25m.

Venture investors are expected to open to sell the apartments and

officetel of the project in November this year. The quality of Ascent

Lakeside is guaranteed by the prestige brands of Vietnam and Japan.

https://www.reic.vn/?q=Sanyo

https://www.reic.vn/?q=Ascent


Page 8

Residential 6/2016

[HANOI] THE MANOR CENTRAL PARK

Tokyo-based Mitsubishi Corporation joined hands with Vietnamese

property developer Bitexco in a joint venture to develop a residential

development project in Hanoi. The project is part of The Manor Central

Park, a mixed-use development project being undertaken by Bitexco, the

realty group widely known for its tallest building in Ho Chi Minh City –

Bitexco Financial Tower.

Mitsubishi holds a 45% stake in the joint venture while Bitexco holds the

remaining 55%, with the total investment cost estimated to be 30 billion

yen (almost $285m) for the first phase.

During the first phase of cooperation, the joint venture will develop 240

low-rise housing units and two high-rise condominiums, while the overall

target is to construct 1,000 low-rise housing units and a total of 17 high-

rise buildings.

Residential 8/2016

[HCMC] THE ASCENT – THAO DIEN CONDOMINIUMS

The Hoa Binh House Joint Stock Company has partnered with two

Japanese partners, Okamura Home and Sanyo Homes, to set up the

Okamura Sanyo Properties Joint Stock Company specialising in real estate

management in Vietnam.

Okamura Sanyo Properties is expected to become one of the factors

leading the real estate management market in the Southeast Asian nation.

At the launch ceremony, the company announced the management of the

Singapore-standard hi-end apartment project, The Ascent – Thao Dien

Condominiums, in Ho Chi Minh City’s District 2.

http://www.namhungland.vn/dai-gia-nhat-ban-o-at-dau-tu-vao-bat-dong-san-tp-hcm_288.html


Page 9

Residential

09/2016

[HANOI – HCMC – DANANG]

Vietnam-based real estate investment fund Indochina Capital and

Japanese contractor and real estate developer Kajima Corporation have

sealed a $1 billion joint venture partnership on Friday to invest in the

Vietnamese real estate arena. Indochina Capital and Kajima Corporation

are equal partners in the new venture. The $1 billion investment capital

will be contributed over a period of 10 years. Named Indochina Kajima

Development (ICC-Kajima), the joint venture will initially focus on urban

in-fill accommodation projects, in the residential and hospitality

segments, in Hanoi, Ho Chi Minh City

Residential 10/2016

[HCMC] WATERINA SUITES

The venture of Maeda and Thien Duc has been established for developing

a $30m project with 25 luxurious storeys in District 2 in HCMC. With scale

of 3,150 m2 and 86 sky villas, Waterina Suites plan to complete at the end

of 2016.

This project is estimated to be strongly competitive on the market thanks

to its high quality and price, putting high pressure on domestic

developers in HCMC.

Residential 10/2016

[HCMC] ASCENT RIVERSIDE

Tien Phat joined hands with 2 Japanese investors, including Sanei

Kenchiku Sekkei (Meldia Group) and Pressance Corporation to develop

the first project named Ascent Riverside, located in District 7, HCMC.

The project is planned to develop 500 apartments with total investment

of 1,200 billion VND ($50m).

http://waterina-vn.com/


Page 10

Residential

11/2016

[HCMC] DREAM HOME PALACE

The HCM City-based Nha Mo (Dream Home) Corporation has announced

it recently signed a comprehensive cooperation contract with The Global

Group, a Japanese real estate developer.

Under the contract, with an initial investment of US$50 million, the

Japanese group will apply Japanese experience and technologies in the

project implementation as well as transfer Japanese-standardised

management and operation processes to the Vietnamese side.

The Dream Home Palace project in District 8, Ho Chi Minh City will be the

first joint project between the two sides. It will offer more than 900

apartments with a price of only VND888 million (US$39,900) each.

Office 12/2016

Vietnamese leading private group in finance, banking and golf resorts

BRG Group has established a strategic relationship with Japan’s

Sumitomo Corporation to increase to collaborate in potential business

sectors, especially the real estate and retail. In particular, Sumitomo

Corporation plans to build an office tower with an investment of about

USD 100 million.

The co-operation, which was marked by signing a memorandum of

understanding (MoU) on December 1, 2016, is considered a foundation

to exploit and develop the two parties’ potential during the co-operation

progress in numerous sectors, including real estate, Nhat Tan-Noi Bai

urban development project, high-tech agriculture and retail sectors.

Office 2016

[HANOI] CORNER STONE

Daibiru, a Japanese real estate group, wrapped up a deal to buy a

CornerStone Building in Hanoi for $61 million.


Page 11

This was not the first investment deal of Daibiru’s in Vietnam. In 2012,

Daibiru bought a large amount of shares in a company that owns Saigon

Tower at No29 of Le Duan Street in Ho Chi Minh City’s district 1. The

seller was an investment fund under the Chinese Chiaphua Group. The

value of the deal remains a secret.


Page 12

PROJECT MAP

River City

Angia Skyline City Gate

Flora Anh Dao

The Ascent – Thao Dien

Ascent Lakeside

Waterina Suites

Dream Home Palace


Page 13

CONTACT INFORMATION

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Documents

VIETNAM REAL ESTATE THE INVESTMENT WAVE FROM · PDF filetwo 4-star hotels in Hanoi and Ho Chi Minh City was the only ... According CBRE, ... VIETNAM REAL ESTATE: THE INVESTMENT WAVE