Foreigners return to Vietnam's real estate

While domestic investors are seeking ways to flee from real estate projects, a prime cause of bad debts at banks, many foreign enterprises have begun new high-value investment activities.

Several sources also forecast that foreign direct investment pumped into the real estate sector would see positive changes this year.

For the first four months of the year, foreign investors injected $1.57 billion into real estate projects in Vietnam.

One of them was the Binh Duong Garden City joint-venture, with investment capital of $1.2 billion.

The project, whose construction work began in March, covers an area of 71 ha of prime land in the centre of Binh Duong New City project. It was developed under an alliance between Vietnam's Becamex IDC and Japan Tokyu Corporation.

A report from Dau Tu newspaper also says that Korea Development Bank (KDB) has decided to pump $200 million into the first phase of construction of the centre of the Tay Ho Tay urban area in Hanoi, with Daewoo E&C being the project owner.

The capital mobilised from the KDB would enable Daewoon E&C to begin the project by the end of this year.

The first phase of the Ho Tram Strip Project in Ba Ria-Vung Tau Province will be put into operation in February 2013.

The project, funded by Canada's Asian Coast Development Limited Company, has total investment capital of $4.23 billion and covers 164 ha with five-star standard facilities.

In addition to directly investing in real estate projects in Vietnam, some foreign enterprises are seeking ways to penetrate the domestic real estate market under the mergers and acquisitions (M&A) form.

According to some foreign investors, real estate prices in the Vietnamese market are at a low level, thus creating opportunities for those who want to buy unfinished property projects whose owners have met financial difficulties.

Malaysia's leading property developer, S P Setia Berhad, who owns Ecolakes My Phuoc and Eco Xuan in Binh Duong Province, for instance, has plans to extend investments into real estate projects under the M&A form in Hanoi and HCM City. - Source: VIR