Vietnam Real Estate

Vietnam Investment Review - Timeout

2005-09-28T11:00:00.000-07:00

Property experts have refuted recent proposals from the Ministry of Natural Resources and Environment (MoNRE) to activate the inert real estate market, claiming state management needs to research the issue further before deciding how to intervene.

Property experts warn the state not to interfere in the stagnant property market without more research.

Land and house transactions have been dormant for nearly a year, when the government issued five decrees on implementing the Land Law, and cadastral authorities feared stagnation would put many developers into bankruptcy.

The ministry recently proposed the Prime Minister reduce the supply of new land and residential projects, promote payable demand and back up finance for property developers to reignite the market.

Vu Duy Thai, vice chairman of Hanoi Industry and Commerce Association and a property trader, said these measures were not feasible, as banks were already cautious about lending to property developers.

“It’s also difficult for normal people to borrow for house purchases,” said Thai.
Property experts said the government should be cautious about interfering with the market, saying rather than adopting vague rescue measures, the reasons for the inert market should be clarified.

“The Ministry of Natural Resources and Environment should carefully study the situation because their three guidelines aren’t presently feasible,” said Nguyen Thanh Luu, director of Markcom Research and Consulting Company.

A property expert, who preferred anonymity, said real estate transactions were on thin ice, and not because demand for housing accommodation was low, but because many people were being out-priced.

“Land and house prices in Vietnam’s big cities are too high, so most of the population cannot afford it,” he said.
The expert said most developers were building luxury properties for middle and upper class clients, and supply in this faction nearly balanced demand.
“As a result, fewer transactions happen among high-priced properties, leading to the inactivity,” he said.
Markcom director Luu said the property market dealt with only 5 per cent of the total population, the remainder of whom were squeezed out because property prices were too high in Vietnam.

“Lack of transparency and appropriate rules from the state has led to transactions based on rumours, feelings and psychology, resulting in rampant speculations that push property prices far beyond their actual values,” said Luu.

As a result, the market had halted, as many people weren’t financially secure enough to participate, he said. If the state took steps, he added, to pull prices down, which would hurt developers and speculators in the short term, it would make the market in the long run fundamentally more sustainable.

Luu said four types participated in the market, namely the actual developers, professional speculators, ensuing speculators and those demand accommodation.

He said if the property prices dropped, the first two participants would only have to accept less profit, while the most impacted would be the third participant, who could fashion survival measure for the first two to three years until the market normalised.

Luu said the government could drop prices by increasing the supply of hi-rise apartments, while leaving luxury apartments and villas alone.
“The increased supply of apartments would force other kinds of property to reduce prices because those demanding accommodations would purchase apartments instead of buying expensive land or villas,” said Luu.

Luu pointed out that the Vietnamese property market was highly influenced by psychological effects, thus any feasible government policy would affect property prices.
As such, Luu suggested, the government should establish a housing development fund for construction of hi-rise apartments and establish a national information centre to provide details of housing projects and prices.

He said the government should assist developers through more transparent policies in land clearance and acquisition.

In addition, Luu called for the abrogation of a decision in Hanoi that requests property developers to return 20 per cent of their land, including infrastructure, to local authorities.
MoNRE deputy minister Dang Hung Vo recently censured the decision, claiming that it would raise apartment prices, as developers would increase prices for their remaining land to make up for the loss.

VIR 9/26/05

Office building on Nam Ky Khoi Nghia to be built by Tadimex

2005-05-26T22:34:00.000-07:00

Tadimex plans office, apartment buildings

The Tan Dinh Import Export Joint Stock Co. (Tadimex) will invest US$15 million to construct a building with offices for lease at 266 Nam Ky Khoi Nghia street, on the way to the airport, in District 3.

Work will begin next month, and the Sacombank Office Building is scheduled to open in early 2007, said Tadimex general director Nguyen Quang Trung.

The 2,000sq.m building will have a two-level basement for parking and 15 stories.

Sacombank, a HCM City-based major commercial bank, is a big shareholder of Tadimex.

In August, Tadimex will break ground for a US$5-million, 12-story apartment block also in District 3.

Saigon Times Daily May 26, 2005

Commercial real estate market booming

2005-05-24T23:34:00.000-07:00

Investors find high-rise heaven (26/04/2005)

Having an office in a high-end office building is thought to add to a business's prestige. This thinking has raised the demand for high-end offices and prompted investors to fund even more office blocks.

"Investors are happy with the rising rental of high-end offices while enterprises feel wretched about it," said Marc Townsend, the managing director of CB Richard Ellis (CBRE) in Vietnam, when summing up the view given at a seminar on Ho Chi Minh City's real estate market the company recently organized.

In recent years, demand has been close to outpacing supply, but last year the market has hotted up following the leasing of almost all office space in high-rise buildings, while few projects were started. So, rents have jumped.

Most office buildings are in the city's downtown districts like District 1 and District 3, promoting themselves by offering enterprises convenience in having contact with each other. They all are high-end buildings offering a wide range of facilities. Townsend said all such buildings have 100% occupancy of class-A offices, which have a level of luxury according to international standards, and hence are the most expensive.

Surveys show the rent of such a class-A office in HCM City is US$26-27 per square metre per month, a price surpassing that of office rental in Bangkok (US$14/sq.m./month), and Kuala Lumpur and Manila (US$10). It is only surpassed by the rent in Singapore (US$29-30) and Hong Kong (over US$50).

Vietnam, with a fast-growing economy and many advantages, such as political stability, is attracting more investors. Analysts say big business groups are eyeing Vietnam for its opportunities as it is applying more liberal policies and is about to join the World Trade Organization. Therefore, the demand for class-A offices will keep rising. And since office buildings of this type are few, the rental will certainly shoot higher. Townsend predicts that the rental for high-end offices will continue to rise in the next five years. He said that many office building projects were suspended when the economic crisis broke out in Asia in 1997 but only a few have been resumed.

Middle-class offices

Townsend says more offices of the middle and low end (classes B and C) will be built in the long run since the number of lessees keeps rising steadily. These lessees are Vietnamese enterprises that have decided to rent offices in high-rise buildings because they are reasonable - about US$15-17/sq.m./month - and have many amenities. In addition to the facilities such as good fire prevention systems, guards, stable water and power supply, elevators, and so on, companies leasing offices will gain prestige with their clients. "This is an important factor for enterprises, especially at the time of world integration," Townsend says.

Many domestic enterprise managers agree. They say renting offices in high-rise buildings reflects the social standing of enterprises. Moreover, it is cheaper than renting private houses because they do not have to furnish and decorate the house; and with all the services provided by the office building they have more time to run their business.

Since the Law on Enterprises became effective five years ago, more and more domestic enterprises are being established and they have wanted to rent offices in buildings of classes B and C. So there will be higher demand for offices of these classes and investors are advised to focus on building offices for domestic enterprises instead of offices for foreign companies. Townsend comments: "Internal forces always develop more stably than external forces."

Besides, many foreign enterprises investing in Vietnam are of medium size - there are more small and medium-size enterprises than big multinational companies. They operate in trade, information technology, telecommunications, advertising, banking, insurance, tourism, consulting and import export, and they would rather rent offices in middle-class office buildings.

Therefore, many local investors are now investing in the construction of medium- and low-class office buildings for rent to local enterprises. Previously, most office buildings, usually of high class, were built with foreign investors' capital on land contributed by local partners.

Hanoi also

Like HCM City, Hanoi will soon be short of office space to lease to the fast-growing number of enterprises, foreign and domestic alike. Two office buildings completed not long ago have already leased their offices: Ocean Park has no vacancies and Vincom City has only a little space available. Both buildings lease their offices at an average price of US$20/sq.m./month.

All office buildings in Hanoi have an occupancy rate of over 90%, according to a foreign real estate developer. He said the demand for office space can be seen from the rental, of US$30-40/sq.m./month. Statistics indicate the leased office space in Hanoi has increased from 8,000sq.m. in 2003 to 12,000sq.m. in 2004. Some 100,000sq.m. of office space are being built. These offices will be available soon.

The rise of office buildings in Hanoi indicates that local enterprises, mainly small and medium-size enterprises, like those in HCM City have changed their views about the type of office to rent. Previously, they contented themselves with small box-shaped multi-storied houses (usually four stories of 50sq.m. each) leased for around US$1,000 a month, but now they can afford paying up to US$2,000 a month for a 100-sq.m. office in a modern middle-class high-rise.

A survey by CBRE-Vietnam shows some 80 domestic enterprises in Hanoi have their offices in high-end office buildings that previously were leased only to foreign companies. The survey also indicates that these enterprises reckoned the rentals high but the service much better, from water and electricity supply to security. There was some doubt about being able to achieve full occupancy at Ocean Park and Vincom City towers when these two modern office buildings were being built. But when both opened in late 2004 their offices were rented out in just half a year. Now many realty investors - the owners of the Hoa Binh Tower and Artexport OB (also in Hanoi), for instance - are more confident of their ventures.

New projects

The increasing demand for offices in high-rises has prompted investors, both local and foreign, to develop new projects. The success of the Vincom City Tower project, which has turned a plot of wasteland in Hanoi into a profit-making office complex, has stimulated many a landowner in the city.

Marc Townsend says market demand up will open more opportunities to investors who will eventually rush to build office blocks. "I believe domestic investors will play a major role in this movement, especially with small investment projects capitalized at US$2-6 million. Their biggest advantage remains with their owning land to build the project; all they need is capital and they will certainly find it under the current circumstances," he said.

Recently, the Ministry of Planning and Investment granted a license to the Hanoi City Complex, a 65-story high-rise project in Hanoi that will be office buildings and a commercial centre.

All class-A office buildings in Hanoi and HCM City have full foreign capital or are joint ventures. It is more than likely that foreign investors will pour capital into more projects in the future. A Taiwanese group, the Ever Fortune, is investing in a big housing-office building complex project, the Pacific Place, in Hanoi.

High-end office buildings in HCM City have scored well. The e.Town building owned by the REE Joint Stock Company (on Cong Hoa Street of Tan Binh District) leased all its 30,000-sq.m. office space in two months, said Tran Van Thanh, a member of the company's board of directors.

At a recent shareholders' meeting, REE announced plans for a second e.Town that will be built near the first building. About US$16 million will be invested in this project that will have 26,200sq.m. of office space for lease. REE estimates it will recover the invested capital in six and a half years.

Binh Minh Trading and Import Export Company (Bitexco) has plans to invest US$90 million in a 60-floor tower in HCM City. This will be a complex of offices, commercial, financial and service centers built on the block encompassed by three streets: Hai Trieu, Ho Tung Mau and Ngo Duc Ke, of District 1. The company is operating the Bitexco building on Nguyen Hue Boulevard, which is leased at US$22/sq.m./month.

According to CBRE, there are 10 projects of office buildings for lease being developed in HCM City: Fideco, with 18,000sq.m. of space; Thai Van Lung, 6,300sq.m.; Artex, 3,600sq.m.; and Hung Vuong Plaza, 6,000sq.m.; and others like The Lancaster, Vitek Building, Vietnam Petro Building, Broadway II, as well.

However, these projects face high costs for labor and building materials. Thanh said REE spent US$260 for a sq.m. of e.Town but it will have to pay US$320 a sq.m. for the second e.Town.

There are other difficulties for developers, too. The Government recently stipulated new regulations on land lease, priced three to four times higher than previously. The land price in the downtown area has become almost unbearable for anyone wishing to build a house there. So those wishing to have a home in the city center are forced to buy an apartment in a high-end condominium. CBRE reports that HCM City has 43 high-end condominium projects under way. Already, people have deposited some money after having seen the model or blueprint of the condominium and apartment. Their decision to purchase is based on the location of the condominium, and the quality of the project. They have been attracted through advertisements in newspapers or catalogs issued by the investors themselves.

Townsend estimates the average price of class-A condominium apartments varies between US$700-2,200/sq.m. Pasteur Court, a condominium being built on Pasteur Street of District 3 sells at US$2,200/sq.m. - the highest price - followed by The Lancaster project on Le Thanh Ton Street of District 1, US$2,100/sq.m. (this project will be completed in February 2006); The Manor project on Nguyen Huu Canh Street, Binh Thanh District, US$1,600/sq.m. (available later this year); and Phu My Hung's Grand View, US$1,100/sq.m. Tan Hong Ngoc is building a class-A condominium in Tan Phu District on the outskirts of HCM City and sells its apartments for US$700/sq.m. - the cheapest of all. Binh Phu, another project in the district, will sell for US$750/sq.m.

The prices of condominiums in Hanoi are softer: US$1,650/sq.m. for an apartment in the Pacific Place and US$1,500/sq.m in The Manor. The lowest price of condominium apartments in Hanoi remains in the Ciputra project, at US$600/sq.m.

Condominiums are high-end housing projects; they have facilities such as commercial centers, parking basements, sports, beauty, and kindergarten centers. Nevertheless, "it is very hard to assess the actual demand of the populace, particularly about condominium apartments in HCM City," Townsend says. "There's no indication of a possible price slump for condominium apartments though their supply keeps rising. We don't know whether HCM City citizens buy apartments for living in or investment."

ASEAN Economic Ministers to Meet in Hanoi

2005-04-25T19:00:00.000-07:00

HANOI: Economic ministers from Southeast Asian nations gather in Vietnam to hold talks on integrating their economies and conduct a dialogue with the European Union.

"The ministers from the Association of Southeast Asian Nations are expected to update themselves on the status of free trade agreements the region is engaged in as well as hold talks on regional integration, said an ASEAN trade official who asked not to be named.

The ministers meeting at Halong city, 170 kilometres (106 miles) east of Hanoi, are expected to examine preparations for the implementation of the ASEAN-China agreement on trade which will start on July 1.

The agreement was signed in Vientiane last December, during the last summit of the organisation.

According to the agreement, starting from July 1 2005, China and the ASEAN countries will start cutting tariffs on certain types of goods to between zero and five percent by 2010 for Southeast Asia's six more economically advanced members and by 2015 for Laos, Vietnam, Cambodia and Myanmar.

The official also said the ministers could discuss progress in the ASEAN-Japan FTA talks after a recent senior officials' meeting in Tokyo.

Also expected on the agenda is initial discussion of the ASEAN-South Korea framework agreement for an FTA after the two sides agreed last year in Laos to start FTA talks this year.

'I also expect the usual review of progress in the ASEAN Free Trade Area,' the official said.

This would include the recent decision by Vietnam to compensate Thailand for delaying import tariff cuts on motorbike parts and completely built cars, he said.

EU Trade Commissioner Peter Mandelson will take part in the ASEAN-EU consultation in Halong.

Ernest Bower, the former president of the US-ASEAN business council and now a partner of the Washington-based consultancy BrooksBowerAsia, said 'ASEAN needs to refocus the AFTA commitment.

'Economic integration is an achievable goal,' he said.

'The ministers have before them a roadmap that allows for leadership by more advanced (and) prepared countries to be 'pathfinders' and for other members to join later and benefit from the experiences of the leaders.'

He said the question was one of political will and focus.

Bower also said there was no doubt the Myanmar issue was affecting the region's competitiveness.

'It is legitimately an issue that impacts trade and investment,' he said.

The European Commission last month called on Myanmar to meet key demands including freeing opposition leader Aung San Suu Kyi before it takes over the revolving chairmanship of the ASEAN regional bloc next year.

Mandelson is likely to broach the issue in Halong this week.

Myanmar has been maintaining defiance in the face of international calls to give up the ASEAN chairmanship because of its poor democracy and human rights record.

- AFP" 4/26/05

Leading Banks to Sell Shares to Foreigners

2005-04-25T18:57:00.000-07:00

HANOI - The State Bank of Vietnam has given its agreement in-principle for two joint-stock banks to sell their shares to foreign banks.

The banks concerned, the Saigon Thuong Tin Commercial Bank (Sacombank) and Asia Commercial Bank (ACB), are the leading joint-stock banks in Vietnam.

These two banks will have to apply for official permission from the central bank after selecting their foreign bank partners.

Under existing regulations, joint-stock banks can sell 30% of their equity capital to foreign investors, but they must seek the State Bank's approval on these investors.

Sacombank has already signed with the Australian bank ANZ for the latter to acquire 10% of Sacombank's legal capital of VND125 billion (US$7.89 million) at a price tag of VND425 billion.

Fund management company Dragon Capital and the World Bank's International Finance Corporation (IFC) own around 20% of Sacombank.

ACB has a legal capital of VND600 billion, of which three foreign investors currently hold around 24%. They are IFC, Dragon Capital and Jardine Matheson Group's Connaught Investors Ltd.

Several banks, including Standard Chartered Bank, Citibank, Hong Kong and Shanghai Banking Corporation (HSBC) and Singapore's DBS, want to buy ACB shares. ACB held a meeting last Thursday on selecting a partner but refused to announce its final decision. Trinh Kim Quang, a member of ACB's executive board, said his bank would apply early next week for State Bank approval on its foreign partner.

VNA 4/26/05

Vietnam's Tallest Building Starts its Construction

2005-04-24T18:04:00.000-07:00

VNN 4/24/05

Construction of the tallest building in Vietnam will begin on Sunday at No 1 Ho Tung Mau Street, District 1, Ho Chi Minh City, according to Binh Minh Import-Export Company – the project investor.

The 68-storey bloc has 60 storeys for office leasing and commercial and financial services, a basement and 7 underground storeys. The modern steel structure will be covered by glass sheathing and installed with a special lighting system to illuminate the top roof at night.
Construction of the nearly US$100 million project is expected to be completed in 30 months."

Luxury aprtment Dat Phuong Nam to start construction in Binh Thanh HCMC

2005-02-24T13:02:00.000-08:00

Name: Dat Phuong Nam (The Southern Land)
Location: Q. Binh Thanh, HCMC (243 Chu Van An Street
Total construction cost: 320 billion
Price: 10.6 - 13 million/sq. meter
Apartment Size: 102 to 140 sq. meters
Project: 3 18-story luxury apartment buildings with total 300 apartments
Lot: 6,500 sq. meters
Completion: 18 months (expected to be completed by mid-2007)

(reported by STD 11/30/2004)

Sanyo builds new digital camera plant in Dong Nai

2005-02-24T12:41:00.000-08:00

See posting on Gao Center weblog.

Decor

2005-02-23T14:18:00.000-08:00

Aluminum door, window frames

Ynghua Vietnam Company
11 Road 3A, Bien Hoa 2 Industrial Park
Dong Nai
(061) 836 611, 993 553
(061) 836 613 fax

Quan Dat Ltd.
Lots 1-2, F1 Section
Tan Thoi Hiep INdustrial Park
Hiep Thanh Ward, Dist. 12
HCM
717 6781
717 6782 fax

Viet Son Co.
69 Nguyen Thong St., Dist. 3
HCMC
846 8781, 846 8816
846 8783 fax

Phu My Bridge Linking Q2 and Q7 to be built 9/05

2005-02-23T13:50:00.000-08:00

Construction of the 2-km US$115 million suspension bridge linking Q2 and Q7 is now scheduled to start in Septmber 2005 under BOT terms. The bridge is one of the HCMC five (5) key infrastructure projects.

Investor: Phu My Bridge Corp. (PMC) with a consortium of 5 local firms: Hanoi Construction Corp.; Investment and Development Construction Co.; Joint Stock Concrete Company No. 620; HCMC Infrastructure Investment Co.; and Thanh Danh Construction and Trading Co. (International Finance Corporation of World Bank expresses interest in joining the project).

Financning: VND 400 billion loan from local banks and US60-US$70 million from France's Societe General Bank

Contractor: foreign contractor to be named in March/April 05 under a foreign engineering-procurement construction (EPC) contractor

Consultant: Maunsell from Australia

Design: 8-lane suspension bridge with 100,000 vehicles each day

Completion: Q3 2008

BOT: 26 year license to collect tolls, after which to transfer to the government.

Korea's Daewon's residential development in Danang receives conditional approval

2004-10-25T20:54:00.000-07:00

Danang authorities have conditionally given the thumbs-up to a South Korean proposal to invest in a residential development in the central city.

Daewon Company’s proposal consists of 12 apartment blocks of 17 to 21 floors for sale and lease on an area of four hectares by the Han River in Hai Chau district.

This is the first foreign-invested housing project for sale submitted to the Danang People’s Committee. Daewon would like the project to be 100 per cent foreign-owned and to complete construction of the first phase within two years.

Local authorities, aware that in the past a number of property projects in the area have been ‘all talk but no action’, required Daewon to submit a written statement about their commitment to the project’s progress. The People’s Committee has set out tough conditions, asking the property developers to put in a mortgage of $2 million as a guarantee before proceeding with the project.

While declining to comment on the guarantee, Lam Quang Minh, director of Danang Investment Promotion Centre, told Vietnam Investment Review that Daewon aimed to pour around $80 million into the development. Minh said the Korean firm planned to develop the project in four stages but the city authorities expressed a preference for it to be carried out in two. He added that discussions were still underway between the local authorities and the developers before they officially applied to the Ministry of Planning and Investment for a licence.

Daewon is also in partnership with Thu Duc Housing Development Company in developing a $20.5 million residential complex in Ho Chi Minh City. The development, currently under construction, will feature three 16-storey blocks with more than 400 apartment units. The project has a legal capital of $10 million, of which, Daewon contributes 60 per cent while Thu Duc chips in the rest. Thu Duc general director, Le Chi Hieu said the apartments would be high-end with modern facilities and amenities and each unit would have a floor area ranging from 70 to 140 square metres. The complex will provide parking lots for around 140 cars.

Daewon is also seeking a licence from the Ministry of Planning and Investment to develop another residential project in Ho Chi Minh City with a total investment of $29 million.

Meanwhile, Danang authorities have lost patience with several large property projects yet to get off the ground in the area.

Two months ago the authorities revoked the licence for a $15 million hotel and office complex proposed by Viglacera. The building material producer had acquired the land but was unable to seek financiers for the development.

Danang also got tough on an Australian-bankrolled hotel project which was granted a licence almost two years ago but has yet to see a brick been laid on the site.

Now the People’s Committee has set next January as the deadline for the construction on the $27.6 million property to begin, otherwise the investors would have their licence withdrawn.

The new land law awaits government guiding regulations

2004-10-23T17:56:00.000-07:00

A lack of "essential" guiding documents was impeding the effectiveness of the new Land Law, said participants at a seminar in Hanoi yesterday

Although the Land Law came into effect more than 3 months ago, a detailed decree explaining the fine print of regulations is still being thrashed out.

The seminar "Implementing the newly amended land law from the business perspective" heard opinions from enterprises and experts in order to fine-tune the draft decree before a final version is submitted for the Government approval.

The final decree would be presented to the Government soon, said an unnamed senior official from the Government's Research Committee.

At the meet, participants contributed opinions relating to rules on property prices, land clearance, land-use rights and leasing real estate.

Some businesses complained of discrimination on land-use rights between State-owned enterprises (SOEs) and private companies.

Hanoi University of Law expert, Nguyen Quang Tien, said SOEs often used land wastefully, even leaving land unused, while small - and medium - sized enterprises (SMEs) paid skyrocketing land rents.

Many businesses urged the Government to establish a board to inspect land use, suggesting if land is mismanaged by State administrators or SOEs it should be removed from their jurisdiction.

Some participants complained about the cumbersome procedures still attached to renting land for commercial purposes.

Director at Hoang Quan Property Company, Hoang Son, said the decree should simplify and clarify such processes to create better conditions for enterprises to rent land.

Deputy head of the rural small - and medium enterprises association, Le Khac Triet, asked that the one-door policy for land rent, which was stipulated by the law, be throughly carried out.
Businesses also asked the Government to set up another board to enforce the overall transparent implementation of the Land Law.

The conference was jointly organised by the Research Committee, Vietnam Association for Young Entrepreneurs, and Vietnam Competitiveness Initiative (VNCI) of the US Agency for International Development.

10/22/04

Kinh Do is doing some expansion work

2004-10-23T17:44:00.000-07:00

1. New $15 million factory in Binh Duong's Singapore industrial park.

2. On 10/23/04, it inaugurated a complex of 50 luxury villas and a recreational club near the Song Be golf course in Binh Duong province.

3. The company also opened the US$1 million luxury recreational Regal Club in the villa complex. The club, which covers 8,000sq.m, includes a pool, in which 300 people can swim at a time, a 150-seat meeting hall and a modern-equipment sports complex with tennis courts and a gymnastics room. Regal Club also has an international-standard restaurant that mainly serves people in Binh Duong, especially those who work in the near-by industrial parks and export processing zones. Minh said the villa complex and Regal Club, covering a total of six hectares, have a combined investment capital of more than US$5 million.

Kinh Do has hired Chesterton Petty Vietnam, an affiliate of the UK-based group Chesterton International, to manage the entire complex.

Korean housing developer seeks bank guarantee for its low-income housing project in Saigon

2004-10-23T17:35:00.000-07:00

The Korea National Housing Corp. (KNHC) is seeking guarantees from either the State Bank of Vietnam or the Ministry of Finance for a US$900-million project to build 60,000 apartments in Ho Chi Minh City for low-income people.

Lee Ho-weon, general manager of KNHC's representative office in HCM City, said KNHC planned to sell the completed project to the Saigon Real Estate Corporation (Resco) of Vietnam, which will contribute land and some of the project's initial capital.

KNHC has submitted a petition to HCM City vice chairman Nguyen Van Dua asking for guarantees in case the State-owned Resco defaults on its payments and does not take over the project, he said.

"We need State guarantees that we will get back all of the money in time to minimize our investment risks," he said.

City leaders said they supported KNHC but said it might take months to get reply from the State Bank of Vietnam or the Ministry of Finance.

Lee said his company planned to cover all construction expenses for the low-income housing units.

When buying the completed project, Resco will have to pay 30% in advance and the rest in long-term installments.

Saigon allocates land in Quan 2 for resettling residents affected by Thu Thiem Urbanized Area development

2004-10-23T17:00:00.001-07:00

The HCM City government has decided to allocate 6.37 hectares of land in Thanh My Loi Ward in District 2 for a housing project to resettle people affected by the development of Thu Thiem Peninsula.

The Thanh My Loi area is the second housing project approved for resettlement in District 2. The project will cost more than VND365 billion, to be funded by the city budget and the HCM City Investment Fund for Urban Development. It will have apartment buildings of 5-25 stories, with 1,100 apartments in all. Two-thirds of the area of 6.37 ha will be for housing and the rest for greenery and public facilities.

The first resettlement area in District 2 covers 90ha of land in An Phu Ward. Called Nam Rach Chiec area, it is expected to house 30,000 people and will have a kindergarten, school, clinic and shopping malls. Part of the land in this area will be auctioned to local and foreign investors. Work on the project, estimated to cost VND2.5 trillion, is expected to start next year. The Investment and Construction Authority for Thu Thiem Urbanized Area will select the engineering, procurement and construction contractor via tenders. Investors are expected to enjoy incentives in infrastructure construction.

Saigon Co-Op plans major expansions

2004-10-23T17:00:00.000-07:00

Saigon Co-Op plans to set up stores in all 64 provinces and cities before the country opens its retail and whole industry to foreign competition.

Saigon Co-op will continue cooperation with the Saigon Trading Corporation and local partners to set up supermarkets from north to south, including the establishment of wholesale centers nationwide. The ambitious investment is expected to help promote the brand name of Saigon Co-Op and draw consumers to the modern shopping method.

The company has invested VND1 trillion (US$65 million) in 13 stores, including 11 in Saigon (Ho Chi Minh City) and 2 in Can Tho and Quy Nhon. It will join forces with local partners to open 5 more stores next year at a cost of VND200 billion. The stores will be in Binh Thuan, Vinh Long, Bien Hoa, My Tho and Long Xuyen.

In the near future, stores will be opened in Quang Nam, Danang, Hue, Phu Yen and Ninh Thuan. The company's sales revenue in the first nine months rose more than 50% year-on-year to VND1.13 trillion. It has been ranked 330th among 500 leading retailers in Asia and the top retailer in the country by the Asia Retail magazine.

Two big foreign retailers, Malaysia's Parkson and Hong Kong's Dairy Farm, have expressed interest in Vietnam's retail market.

Detailed plan for downtown Saigon park nearly completed

2004-10-23T16:44:00.000-07:00

The detailed plan for the 10ha Saigon (Ho Chi Minh) downtown park: September 23 Park is nearly completed by the city government. Once completed, it will lay out a grand scheme for some major property projects around the area. The has been approved by the City Government last week. Official approval of the 10ha park is likely to come out in Octobmer/November once the HCM City Architects Association finishes the final draft. The City plans to complete the entire 10ha park before April 30, 2005.

As approved, the plan lays out several projects in the park, including the LG complex, Quach Thi Trang Square, a monument, green and water music parks, bus station, car park and subway terminal.

LG has proposed developing office buildings and commercial and service facilities on one hectare at the 10-hectare park near Ben Thanh Market in District 1, according to a source from the city government.

The city government has told the HCM City Architects Association to finish the final draft of the plan as soon as possible so that it could give official approval this month. The Service of Communications and Public Works will take charge of projects such as building the monument and water music park, paving sidewalks, growing trees and flowers, and installing lighting systems. All these works must be completed by April 30, 2005 when the city marks the 30th anniversary of its liberation.

$300 million seaside resorts Saigon Atlantic Resort in Chi Linh-Cua Lap received the provincial government's ok

2004-10-23T16:31:00.000-07:00

Ba Ria-Vung Tau Province and the U.S. investor Winvest LLC have agreed on the site where a US$300-million seaside resort will be developed. The Government has given the green light to the five-star Saigon Atlantic Resort in Chi Linh-Cua Lap, 6km east of Vung Tau City, except the casino of the project. The resort will be developed on an area of 300 instead of 450 hectares as there is not enough land. The provincial government will report on the location to the Ministry of Planning and Investment for considering a license for the project.

The tourism authority in Ba Ria-Vung Tau has advised the investor to build the resort first and wait until the Government has new polices regarding casinos. The project will include a 1,000-room five-star hotel, 75 villas, an entertainment area, a commercial center and restaurants. The hotel and commercial center will be built in the first phase, to be completed by 2007. In the second phase from 2007 to 2010, other items will be developed.

Winvest will press on with the project right after it is licensed.

Another resort will be developed in Chi Linh-Cua Lap. The US$90-million Atlantic Resort is a joint venture between Vietnam's Thuan Phat Co. and Hong Kong's United International Business Limited, which is also the investor of the Do Son Casino in Haiphong.

Meanwhile, Ho Tay Co. plans a 400-hectare resort in Xuyen Moc District. The State-owned company will cooperate with foreign investors to develop the project, which will have a golf course, a five-star hotel and a supermarket.

Parkson plans to roll out 10 fashion centers

2004-10-23T16:21:00.000-07:00

Malaysia's Parkson Corp. is waiting for the Ministry of Planning and Investment's approval for its plan to develop and operate 10 shopping centers in the country. Parkson intends to invest $70 million in several phases in a 100% foreign-owned entity. Parkson Corp. owns about 35 fashion shopping centers in Malaysia and 40 outlets in China. Its sales total US$1.32 billion a year.

The first phase of the plan, which will run for 2 years, calls for establising fashion retail outlets, 3 in Saigon (Ho Chi Minh City) and 2 in Hanoi for a sum of $15 million. Under this plan, Parkson plans to lease all the 20,000 square-meter Saigontourist Department Stores in Saigon (Ho Chi Minh City) as its its main office and retail outlet.

In the next 5 years , Parkson plans to invest additional US$55 million in 7 other centers, including 2 more in Saigon (Ho Chi Minh City), 2 in Hanoi, and one each in Danang, Can Tho and Hue or Vung Tau.

Most of the products sold at retail outlets will be made of local materials. Parkson also wants to seek permission to outsource, design and export fashion products made in Vietnam.

Gold price reaches record high to 8.07 million per tael

2004-10-21T22:14:00.000-07:00

On 10/21/04 the gold price reached a new record high: 8.07 million per tael in Hanoi, 8.05 million in Saigon and the southern cities, and 8.06 million in Da Nang. (One ounce equals to 0.75 tael.)

The US dollar exchange rate on 10/21/04 was US$ = VND15,755

The new record was a result of sharp increases in recent days on the international gold market which has reached $426/ounce.

Despite the record high price, the domestic price is still lower than the international price by about 60,000 to 80,000 per tael.

Experts in the country predicts the price will fluctuate at around 8 million per tael the remaining of the year.

10/22/04

New retail and residential project by Saigon River on the Ton Duc Thang Street, Saigon

2004-10-21T01:56:00.000-07:00

A newlyformed Vietnamese company has taken over the site and foundations of a planned hotel by the Saigon River to build a shopping mall and apartment and office tower, a source said.

The buyer is a VND500-billion joint venture involving the Saigon M&C Real Estate Company with a 60% stake, the Saigontourist Holding Company with 30% and the Thu Do Land Company with 10%.

Originally, the 6,000sq.m site near the Thu Ngu flagpole on Ton Duc Thang Street belonged to the Cot Co Thu Ngu Company, a US$25-million 75:25 joint venture between France's Feal International and Saigontourist.

In 1997, just after the hotel's foundations were laid, the Asian financial crisis broke out and put what was hoped to be a temporary hold on the project. A lack of capital has left the site dormant ever since.

The new owners estimate the cost of the mall and 40-story tower at VND1 trillion. Each apartment will have 3 bedrooms and range in size from 150 to 200sq.m.

The project has been submitted to the Ho Chi Minh City People's Committee, and is waiting for the final approval. The project owner anticipates construction starting early in 2005 and taking 3 years.

The off-the-plan apartment prices will be announced after the project is approved. Buyers will be able to make their payments over 3 years: 40% in the first year and 30% in each subsequent year.

10/21/04

Industrial park and residential complex in Binh Duong breaks ground

2004-10-21T01:52:00.000-07:00

Construction began last week on a mammoth industrial and residential complex in the southern province of Binh Duong.

The complex, approved by Prime Minister Phan Van Khai last March, is set to cover nearly 4,200ha, and borders Thu Dau Mot township, Ben Cat and Tan Uyen districts.

The US$191-million complex is to have six concentrated industrial parks covering 2,000ha, a commercial and urban quarter covering 1,000ha, a recreational area of 900ha and five residential sections of 296ha for local requiring resettlement after land clearance.

The project, the biggest-ever of its kind in Binh Duong province, is designed to transfer land funds for agricultural production into developing industries, services and residential sections for locals.

Speaking at the project's groundbreaking ceremony last week, Huynh Van Trai, director of the provincial department of planning and investment, said a total of 3,000ha has been cleared so far for the project.

"We will try to complete the clearance and compensation by the end of this year," he said.

Trai, also the deputy head of the project management unit, said the province has assigned the Song Than Joint Stock Company, a leading construction and urban development company in the province, as the project owner.

"Both Song Than and Binh Duong province will shoulder the infrastructure cost together, which is estimated at more than VNDl.5 trillion (US$95.5 million)," he said.

"The complex will be significant for the province's socio-economic development, helping lure many more investors to the province, and contribute to the sustainable growth of the province's GDP," said Nguyen Hoang Son, the province's chairman.

Once complete by 2015, the chairman said, the complex is expected to attract US$3-5 billion worth of investment capital, create jobs for hundreds of thousands of locals and establish new-urbanized residential areas accommodating 300,000 people.

Six enterprises, both foreign and local, have registered to lease 1,670ha of the 2,000ha industrial land available in the complex. Of which, the Song Than Joint Stock Company takes the most with 533ha, VSIP joint venture company - the developer of the Vietnam-Singapore Industrial Park - 342ha, Taiwan's Wang Yuan Lin 274ha, Kim Huy Ltd. 230ha; Dapark 158ha, and Phu Gia Ltd. 133ha.

Bordering Ho Chi Minh City, Binh Duong province now has 582 foreign-invested projects with a total investment capital of more than US$4.7 billion, along with 2,350 domestic projects capitalized at nearly VND11 trillion (over US$700 million).

10/19/04

InterContinental resumes construction whre it left off in 1998

2004-10-21T01:14:00.000-07:00

The hotel's construction was started in 1994, but the work was postponed in 1998 when nearly 70% of the project had been completed, due to the regional financial crisis.

The InterContinental Ho Tay should be inaugurated at the end of 2005, according to Dato Abbdulah bin Mohd Yusof, Chairman of the Executive Board of Tradewinds Berhad Malaysia - one of the two partners of the project, the Nghi Tam Village Tourism Development Co. Ltd. (TPC Nghi Tam).

The Inter Continental Ho Tay will have 327 five-star rooms, 36 high-grade apartments and a number of other services.

Another project, the Sheraton Hotel, next to the InterContinental Ho Tay, also postponed by the regional crisis, has been put back on track; with the first 156 five-star rooms now open for guests. Diane Curtis, Sheraton Marketing Director, said Hanoi needs new hotels to meet the increasing demand for high-grade hotel rooms.

In addition, a tourism village and a number of other hotel and tourism projects are to start on areas round Ho Tay (West Lake).

Director of the Hanoi Tourism Department Nguyen Quang Lan said Hanoi still needs 3,000-4,000 more hotel rooms of international standard.

10/21/04

2004-10-20T01:21:00.000-07:00

Pacific Place in Hanoi : - luxury office and condo complex in downtown on Ly Thuong Kiet Street (Hoan Kiem District).

Pacific Place in Hanoi nearly sold out within months of hitting the market

2004-10-20T01:11:00.000-07:00

The Hanoi's Pacific Place, a landmark foreign-invested property in Hanoi, has managed to lease out almost all its apartments within a few months of hitting the market.

Though still under construction, only 15 units of the total 185 high-end condominiums built by Taiwanese Ever Fortune are left for potential sub-investors.

The Ly Thuong Kiet street property has begun to lease the office portion of the property in the next few months. It is the first project in Vietnam to offer long-term lease purchases that will allow buyers or lessees to sub-lease the units. Although they have the option of 15 to 25-year leases, most opted for the entire 42-year period.

Ever Fortune general director Shu Shin Hung said leasing had been slow in the first three weeks after launch but picked up considerably afterwards.

Shu said in a mature market, such a property was likely to be sold out in four or five days; but in an infant market like Vietnam, it took time to go through property agents and individual investors.

Pacific Place's customers were mainly Vietnamese with only some of them foreigners, he said. However, there is increasing number of foreigners interested in the development now.

Property agent CB Richard Ellis (CBRE) said the unavailability of freehold rights to the condominiums had not deterred buyers from investing, reflecting the strength of the condominium market in Hanoi.

"Investors are keen to own part of an international standard building in the heart of the city where they can enhance their investment on the lucrative rental market," CBRE said. "Demand for rental apartments from expatriates is expected to remain consistently strong."

CBRE revealed that the average occupancy of Grade A serviced apartments in Hanoi was 94% by the second quarter. Since bottoming out in 2000 at around US$21.9 per square meter a month rental rates have steadily increased since.

Shu said Ever Fortune would begin leasing its 18,500sq.m office space at a monthly rent of US$23 to $25 per square meter, including service charges. The company has set the minimum lease term at 10 to 15 years.

"We are not in a hurry," he said when asked why he did not market the office earlier. "Office tenants invest in business so they try to maximize use of their money. Maybe during construction or one year before we hand over, they will make their decision."

Buyers of office space will have to pay 10% each upon signing the contract, when construction of the 10th floor is completed next July and when the 18th floor is reached next October. The remaining 70% will become due on the hand-over date, which is expected to be November 2006. The promoters will assist investors in obtaining loans for over 15 years from Techcombank.

Ever Fortune has also contracted CBRE to market the 7,500sq.m retail space in the building. The latter has announced a special promotion period in October and November, when it would offer a five to 10% discount.

Pacific Place is budgeted to cost around US$40 million to build. It has been designed by French Archetype Co. and construction has been undertaken by DECC, a 100% American-owned company.

October 19, 2004

Itaco to build 2 15-story apartment buildings next to the IP park in Binh Tan District

2004-10-20T01:04:00.000-07:00

The Ho Chi Minh City-based industrial park (IP) infrastructure developer, Itaco, plans to venture into the housing market with a VND120-150 billion apartment building project.

Itaco deputy general director Thai Van Men said the planned Tan Tao Plaza next to the Tan Tao IP in Binh Tan district would comprise two 15-story blocks with 288 apartments.

The company expects to kick off work on the project early next year and complete it within two years.

The ground and first floors of the buildings will be reserved for setting up stores and commercial centers. The firm will also build fitness centre, tennis court, swimming pool, playground for children, park, and kindergarten there.

Itaco will give priority to selling these apartments of 56 to 102 square meters to experts, managers and people who are working in the Tan Tao IP. Companies in the IP have registered to buy the first 40 apartment houses.

Itaco said it would develop more apartment projects in surrounding areas to meet the rising demand for housing of workers in the IP as well as those outside.

The company is also weighing the possibility of leasing apartments to companies in the IP to provide accommodation for local and foreign experts.

The 443ha Tan Tao IP has to date lured more than 200 local and foreign investors with total capital pledges of US$112 million and VND3.7 trillion. Figures show 133 investors have come into commercial operation.

Itaco is expanding IP development operations to neighboring Long An and Dong Nai provinces.

October 20, 2004

Low income state employees are shut out of property market

2004-10-20T00:40:00.000-07:00

Married for more than five years, Ha and her husband – both are state employees – remain shacked up with her parents-in-law.

She cannot imagine when they would have enough money to buy an apartment because, with their combined income, excluding vital expenses for living, her small family can set aside only about VND500,000 in savings each month.

With such modest savings, it would take her another 100 years to save up enough to buy an apartment or a small house.

“We don’t have enough money, even though we are state staff. So I think that many other lower income people are in a worse situation,” said Ha.

Ha, along with other state staff in a similar situation, were hoping that a government plan would make apartments available for people with low incomes, such as herself.

The plan meant apartments could be bought on credit, but Ha would have to pay 60% of the apartment’s value when they received the apartment, while the other 40% would be paid monthly, accordingly to the bank’s regulations.

“We have heard about this strategy for a long time, however the regulations have not been released yet, and we do not know how to prepare an application,” Ha said.
People who want to buy an apartment must be official state staff with more than five years of experience, registered as a resident of Hanoi, and have 60% of the total value as down payment.

However, it is difficult for them to raise 60% of the property price, said Ha.

“We have to borrow from parents and relatives, but it is still not enough,” she said.

Hanoi authorities tried to alleviate the situation by suggesting housing investors must set aside 50% of the land area to build apartments for state staff, but investors have complained that this would be of no benefit to them.

According to a recent survey taken by the Vietnam Federation of Labor Unions on house and accommodation for state staff, 90% of state staff are facing difficulties with accommodation.

Of this, 19% of state staff are renting state houses, which are often in poor condition, while another 14.6% have bought state houses. Meanwhile another 31% are not renting or property owners, and over 30% have their own houses.

Low-priced apartments are sold at around VND3 million ($190) per square meter, and range from 45 to 65sqm each.

The price on the market for apartments, on average, is between VND6 ($380) and 10 million ($640) per sqm for spaces of around 100sqm.

In order to lower costs, investors suggested building six-storey buildings without elevators, which would be an economical solution but one that would provide less apartments.

Workers in industrial zones are also living in very difficult conditions. The Government is encouraging investors to build dormitories for workers to lease in industrial and processing zones.

At present, industrial zones in Hanoi are employing more than 16,000 staff, and of this more than 50 per cent come from other provinces.

The lack of accommodation in Binh Duong province is even more serious. Binh Duong has more than 13,000 state staff, while only 40 per cent of them have accommodation.

Phan Phung Sanh of the Ho Chi Minh City Construction Association suggested in a seminar held last week in Hanoi that industrial zones should be planned in large areas in order to have enough space for building accommodation for workers.

For foreign projects that are hiring local staff but have insufficient accommodation, the government should make loans from banks with low interest available to encourage them to set up accommodation for their staff, Sanh said.

October 18, 2004

PMH paid its 25% taxes as decided by PM last month

2004-10-18T22:33:00.000-07:00

Phu My Hung Joint Venture Company has paid corporate tax of nearly VND600bil, at the 25% rate set by the Government.

Yesterday, September 14, the company coughed up nearly VND270 in corporate tax to the State Treasury through its account at the Hong Kong and Shanghai Banking Corporation (HSBC).

According to a spokesperson for the firm, the money was temporary tax duty that Phu My Hung owes for the June 2000 - 2006 period.

However, VND600bil is not the actual tax the joint venture will pay. It must wait for the Ministry of Finance to finalize calculations.

Phu My Hung, a joint venture between a Taiwanese group and a local company, owes corporate income tax from June 2000 to 2004, despite appealing against its tax rate of 25%.

The joint venture said that it has asked the Government for permission to transfer profits of US$31.8mil offshore after fulfilling its tax duty.

According to regulations, foreign investors are able to transfer profits offshore after meeting all tax requirements. Remittance tax was also scrapped in early 2004.

9/16/04

PMY agreed to pay an additional VND288 billion in income taxes

2004-10-18T22:26:00.000-07:00

Phu My Hung agreed to pay an additional VND288 billion in corporate income taxes

According to local sources, the property developer Phu My Hung agreed to pay an additional VND288 billion ($18.2 million) in corporate income taxes to the State.

Phu My Hung, in a press release, said payment was made to compliance with an August 19 decision made by Prime Minister Phan Van Khai, who said the company must adhere to a 25 percent corporate income tax rate.

The joint-venture had already paid VND309 billion ($19.6 million) in corporate income taxes for the period between January 2000 and late June 2004.

In October last year, the Ministry of Planning and Investment (MPI) amended Phu My Hung’s license by increasing its 10 percent income tax rate to 25 percent for certain business activities.

On August 31, 2004, the HCM City Taxation Bureau demanded that the company make an additional tax payment to fulfill its 25 percent corporate income tax rate.

The company had filed a lawsuit, on August 18, saying that it was entitled to a 10 percent income tax rate, as outlined in May 1993 in its first licensing contract granted by the State Committee for Co-operation and Investment, now MPI .

Phu My Hung is a $242 million-invested joint-venture between Taiwanese-based Central Trading & Development Corporation (CT&D) and HCM City’s Tan Thuan Industrial Promotion Company.

In related matter, on September 6, CT&D asked the HCM City Taxation Bureau for permission to remit a portion of its after - tax profits from its Phu My Hung’s operation to CT&D’s other overseas companies.

The bureau said CT&D would be allowed to remit an amount equal to its annual after -tax profit minus the previous year’s remittance.

September 17, 2004

Unusually high occupancy rates and rental prices in Hanoi and Saigon attracts huge investment in real estate development

2004-10-18T21:50:00.000-07:00

Real estate market is bracing for a major boom in coming years, with many large projects on the horizon and a sustainable demand in major cities, the US-based CB Richard Ellis (CBRE) has reported.

CBRE, which manages a dozen high-rise building projects across Vietnam, said last week that Hanoi and HCM City were experiencing "unusually" high occupancy rates compared with the rest of Asia and this trend should continue over the next three to four years.

"The outlook of the local property market is very good if you look at the number of projects and the very unusual high occupancy rates in HCM City and Hanoi," said Marc Townsend, CBRE's managing Director.

"Vietnamese developers are obviously leading the race - they have capital, energy, determination and some excellent sites. This is a very promising market place compared with the rest of Asia."

According to CBRE's latest market updates. Hanoi's office occupancy rate has reached an average 88% with an average rental at US$26.67/sq.m, while HCM City's has climbed to 84% with an average rental at US$26.2/sq.m.

Vietnam's office rental costs are even higher than places like Hong Kong ($23.8), Singapore ($25.5) and Bangkok ($12), said Townsend.

"This could be explained by the current shortage of office space, but new supply in the next two years will soften the rental rates, particularly in Grade B buildings," he added.

Regarding the retail market segment, Townsend said the future market boom would be partially caused by an influx of international retailers over the next few years.

"New retailers are coming - big brand names like Mango, Dunhill, Prada and Benetton are opening their shops in town. This new trend will mean the presence of hypermarket operators, department store chains, and fast food restaurants. While some retailers have been operating locally for some time, many will come to Vietnam for the first time," he said.

Italy's garment retailer Benetton last week announced the group would soon open its first store in Hanoi, in the newly developed Vincom City Towers, following the opening of two retail stores in HCM City.

"We like locating our stores in the shopping malls, and we hope the Vietnamese will know about our brand," Amaury L Blan, Benetton's chief representative in Vietnam said.

Townsend said the market for residential homes was also growing rapidly. "The residential housing market is going to be very competitive".

October 18, 2004

American property group Magnum targets Hanoi's residential market with more than $1 billion

2004-10-18T00:02:00.000-07:00

American property group Magnum is seeking to crack into Hanoi's residential market with a colossal foreign-invested project.

Magnum has expressed interest in developing a $1bil residential complex on a 400-ha area in Dong Anh District in the city's outskirts, Hanoi Authority of Planning and Investment (HAPI) officials have confirmed.

However, HAPI Deputy Director, Nguyen Do Khue said there would be a long way to go before Magnum was given permission to begin construction on the proposed mammoth real estate.

"They will have to make a proposal for the project, submit it for consideration and await government approval. There is a lot of work to be done," said Mr Khue.

The government office suggested that Hanoi People's Committee propose Vinh Ngoc Commune and Tam Xa as the site for the development, assuming the proposal met local urban development plans.

However with other projects lined up to take off in the area, it could take time for Magnum to acquire the land.

Hanoi Planning and Architecture Department officials said the American group would have to wait for modifications to outstanding development plans in the area to be approved.

Magnum is currently building a five-star resort in the central coastal city of Da Nang to the tune of $24mil, expected to open its doors in 2006.

The resort's designer, WATG, is assisting Da Nang with drawing up tourism development plans for the coastal area.

If all goes well, the Magnum residential development will join a host of huge real estate projects taking off in Hanoi, the largest of which is Ciputra International City.

With total registered investment of $2.1bil, Ciputra is the only foreign-invested residential development under construction in the city with units for sale.

The Indonesian-backed development is now completing the first phase of 400 landed houses and 300 apartments.

Its developer, Citra Westlake City Development, plans to complete 50 apartment towers and 2,000 houses within the next five years.

Several other foreign-invested real estate projects in Hanoi have been licensed, but construction has been delayed for various reasons.

The $236-mil Northbridge residential project, also in Dong Anh, has been on hold for eight years as investors ran into financial difficulties.

Now the developers plan to resume the project despite facing a number of obstacles related to investment procedures.

The $240-mil Red River City is also up in the air, as it is located by the Red River's dyke system, where housing development is currently prohibited.

Mr Khue said the city would see another foreign-invested residential development breaking ground in the future on Hoang Hoa Tham street, where an $80-mil project was licensed in 1998 to Ha Viet-Tungshing joint venture.

The company had sought approval to begin construction of apartments for sale for the local market, but the proposal was turned down.

The developers could proceed with the plan to build the property for lease, he added. Tungshing already operates an office building for lease on the capital city of Hanoi's Ngo Quyen street.

The Hanoi City Complex, with registered capital of $115mil, proposed by Luxembourg company Coralis SA, is another giant property project awaiting a licence to get off the ground.

Parkson retail outlets plan submitted to the government

2004-10-17T23:53:00.000-07:00

The project to set up retail outlets by Malaysia's Parkson Corporation has been submitted to the Government for consideration after being appraised by the Ministry of Planning and Investment (MPI) and State agencies involved.

The Parkson Corporation will establish the 100% foreign-owned Parkson Vietnam Company responsible for setting up and running ten shopping centres in Vietnam with the investment of up to US$70 million.

In the first phase, the corporation will spend US$15 million establishing three shopping centres, two in Ho Chi Minh City and the other in Hanoi, operating for two years to design, display and sell fashion clothes.

The investor intends to lease all the 20,000sq.m Saigontourist Plaza located at 35bis-45 Le Thanh Ton street in HCM City for its main office and retail outlet.

Parkson anticipates to invest US$55 million during the five following years in seven other centres including two in HCM City, two in Hanoi, each in Da Nang and Can Tho, and the remaining one in Hue or Vung Tau.

According to Parkson's documents, majority of products sold at the ten retail outlets will be made of local materials. The investor also wants to have permission to outsource, design, and then export the fashion products made in Vietnam.

The Parkson Corp. is a big retailer owning 35 fashion shopping centres in Malaysia, and 40 similar outlets in China. Its revenues total about US$1.32 billion per year.

Thu Thiem Bridge could begain as soon as November 2004 and completed by late 2005

2004-10-17T23:50:00.000-07:00

Construction of the long-awaited Thu Thiem Bridge in Ho Chi Minh City could begin soon in November 2004 and be completed in late 2005, said Ha Van Dung, director of Ho Chi Minh City Department for Transport Public Works.

The new 700-meter long bridge will span over Saigon River, linking Ngo Tat To Street in Binh Thanh District with Luong Dinh Cua Street in District two.

Contractors will build the bridge first and then the approach roads and a 460-m tunnel and fly-over at the Ngo Tat To - Nguyen Huu Canh intersection in Binh Thanh District.

The project will require an investment of VND1.1 trillion (U$696 million). Director of the city’s Urban Transportation Management Department, the major investor in the project, Le Toan, said contractors will be chosen in October for each of the six construction packages.

Toan said contractors will be recommended by the Construction Ministry and the Ministry of Transport.

The pre-feasibility study for Thu Thiem Bridge Project, under the BOT (build-operate-transfer) investment form, qwas approved by Prime Minister Phan Van Khai on April 15.

Ho Chi Minh City’s People’s Committee later proposed that the investment form (BOT) be altered and that money for the bridge come from the city budget and later refunded by bridge tolls.

Despite great efforts by the city, the bridge project has progressed at a snail’s pace.

Earlier this year, city authorities said construction was scheduled to be completed by Liberation Day, April 30, 2005.

Site clearance for the approach roads is one of my major concerns, said director Dung.

The city authorities demanded that site clearance for the roads in District 2 and Binh Thanh District be completed by March 2005. About 350 households in Binh Thanh District and 35 households in District 2 are affected by the project.

The upcoming Saigon City's master plan could pave way for the City's property projects

2004-10-17T23:49:00.000-07:00

Major projects get easy ride as detailed plan available (14/10/2004)

Ho Chi Minh City has almost completed a detailed plan for September 23 park in the downtown area, paving the way for major property projects like an LG-invested commercial complex to get off the ground soon.

The detailed plan, which the city government approved in principle at a meeting early this week, is envisaged consisting of the LG complex, Quach Thi Trang square, a monument, green and water music parks, bus station, car park, and sub-way terminal.

LG has proposed developing office buildings and commercial and service facilities on one hectare at the 10ha park near the landmark Ben Thanh market in District 1, said a source from the city government.

The source said other details about the Republic of Korean conglomerate's project were not available as it was still in the early stages.

HCM City chairman Le Thanh Hai told the HCM City Architects Association to finish the final draft of the plan as soon as possible so that it could be given a stamp of official approval within this month.

The Department of Communications and Public Works has been tasked with implementing projects such as building the monument and water music park, paving the sidewalks with tiles, growing trees and flower plants, and installing lighting systems.

These must be completed by April 30, 2005, when the city marks the 30th anniversary of its liberation, Hai said.

September 23 park is surrounded by Cong Quynh, Pham Ngu Lao, Ton That Tung and Nguyen Trai streets.

中建今年在越南承包合同额有望突破1亿美元

2004-10-15T23:18:00.000-07:00

中建总公司驻越南代表处位于胡志明市，几年来在中建总公司驻越南全体员工的共同努力下，做出了突出成绩，声誉愈来愈好。今年经营势头继续看好，一至六月份共新签合同额3897万美元，完成营业额2800万美元；正在跟踪的项目有9个，预计到年底还可再签合同5000多万美元。若不出意外，今年新签合同额有望突破1亿美元。目前正在施工的项目有7个，业主对施工进度、质量都很满意。

　　在开拓越南工程承包市场过程中，中建不仅取得了可喜成绩；而且代表处一班人注意结合实际，不断总结经验教训，逐步提高其竞争力。其主要经验为：

　　一、加强同外国投资商合作，巩固已有市场。到目前为止中建承揽的工程项目大都为外资工程。

　　二、坚持把“干好工程树好形象”作为在越南市场长期求生存、谋发展的立足之本。中建公司在越所承揽的协福电厂工程、平顺道路一期工程、越南北方法莱大桥工程以及正在施工的阮文灵大道二期工程（平顺道路二期）、富美兴公司办公楼工程、中部茶曲桥工程等大型项目，始终坚持“保工期、保质量、保履约，使业主满意，政府放心”的指导思想。每个项目都精心策划，精心组织。做到干好一个工程，树立一块牌子，开拓一片市场，真正树立了中建国际承包商的良好形象和良好品牌。特别是平顺路三期、四期工程约4000万美元工程项目正是干好了二期工程的结果。由于一期、二期工程做得好，得到了业主和越南政府的信任，业主和越南政府已经决定将该工程项目直接委托给中建承包。

　　三、充分发挥自身优势。特别是中建在改革开放20多年来，随着建筑业的迅猛发展，在激烈的市场竞争中积累了丰富的建筑施工管理经验、一大批优秀施工技术成果、一批优秀人才。在实施工程项目中不断采用先进的施工技术、施工工艺，推广中国成熟的新工艺、新材料，使当地承包商只能望其项背，使其在工程总承包、分包、联合分包、技术咨询中赢得了业主的信任。譬如在同奈省工业区承揽的台湾兴业公司SV-1工业厂房工程（409万美元）就是例证。

　　四、密切关注越南建筑市场的发展变化，与时俱进。根据情况变化，及时调整经营思想和工作重点，优化经营布局，不断扩展市场空间。在经营区域上，以越南国家投资为导向，紧紧抓住南方以胡志明市、北方以河内为中心的两个发展最快的区域热点进行重点开发，形成规模并向周围地区辐射。在经营领域上，以交通、能源、高档酒店和新兴房地产业为重点，牢牢盯住道路、桥梁、电厂等大型项目，发挥其在国内多年从事“高、大、新、重、特、外”项目的施工技术和管理经验优势，树立品牌，分割特殊建筑产品市场，避免与当地承包商在一般建筑产品中的恶性竞争。在业主的选择上，立足于外资项目，参与国际招标，与国际承包商或当地有实力的承包商联手，争取平等参与竞争的机会，避免在当地投资项目上与当地承包商造成竞争。

　　五、坚持充分利用当地资源，加强与当地承包商的合作。在与越方合作中逐步培养、改造，使其成为我在当地发展可靠合作伙伴和主导生产力量，同时坚定不移地推进人才资源本地化。除一些不可替代岗位外，大量使用越籍员工，通过系统培训，把我的技术、管理经验、管理思想、管理方法逐步渗透进去，使其可按照我方的管理和运作模式操作，逐步实现本地化经营。>

profitable investment - real property

2004-10-15T20:11:00.000-07:00

Despite shortcomings, pumping money in property development in Vietnam could be a profitable investment deal, analysts have said.

When describing the real estate market in Vietnam, Neil Thurston, Associate Director of Dinning and Associates, used the phrases “non-liquid market”, “non-transparent” and “relatively weak investment market”. However, he pointed out at the same time that investing in real property in Vietnam would bring high profit.

“If you invest in a developed market like the US, you see low earning capacity, but Vietnam is a developing market,“ he said.

The lack of clear legalities in the real estate market has discouraged foreign investors, who require transparency. Seventy percent of land deals are done on a local black market. Land prices in big cities are over inflated compared to other hubs around the globe. As an example, one square metre in the centre of HCM City goes for US$3000 - 4,000.

Furthermore, the law actively prohibits foreigners from land purchases in Vietnam. Property developers must therefore lease land from the Government (for a maximum duration of 70 years).

The average interest rate on Vietnam’s bond market is 9% per annum. When evaluating interest rates, investors must see higher profits, at least 15%, to cover high risk.

Complicated procedures are also displeasing the investors. Michael McKenzie, President of South Fork Development Company, which has applied for license to develop a tourism resort in Phan Thiet Province, complained that he had been waiting for ten months, but has received no reply from authorities.

The $25mil project, if implemented, will develop a “little Hawaii” in this southern beachside town. He also believed this would bring more related income for locals. But his partners are becoming upset by ongoing delays, he said.

According to Mr Thurston, investors should take advantage of the market in its early stages, by investing now. “The early bird catches the worm”, he said.

He observes that Vietnam’s real estate market is 15-20 years behind that of Bangkok, but will see strong development in coming years.

Ngo Cong Thanh, Head of the Service Sector Division at the Foreign Investment Agency under the Ministry of Planning and Investment (MPI) shared the view, adding that 80% of office and apartment developments are turning a profit. Less profit is coming to hotels, but they are enduring, he said.

According to Mr Thanh, there are 155 foreign apartment projects, totalling $4.7bil, while capital invested in hotel projects is $5.3bil. Investors have expressed intentions of flocking their capital in property development, including the $1bil Las Vegas resort project in Quang Nam Province, and another $300mil in Ba Ria – Vung Tau Province.

“Investors are eyeing Phu Quoc Island as well, but there is no master plan for the area”, Mr Thanh said.

He said that investment in infrastructure development in industrial zones (IZ) is lucrative too. A series of IZs have sprung up along highway 5 in the North of Vietnam, where lease fees average $20 per m/2.

To date, Vietnam has 20 foreign invested IZ, of which four are wholly foreign owned.

“Binh Duong and Dong Nai IZs in the South of Vietnam, for example, post growth of 33-34% and 18-19%. More manufacturers mean more demand for services”, Mr Thanh said.

He stressed that the real property market is warming after a long time in slumber. In Hanoi, the Sheraton Hotel opened at the beginning of the year, after standing empty for nigh on a decade. The twin tower Vincom building is preparing to take tenants at the end of this year, and the Citra ‘satellite city’ project has entered its second phase of investment.

‘This shows investor interest in the market’, Mr Thanh said.

Meanwhile, Mr McKenzie said he had decided not to move the project to Thailand, despite his partners’ requests, because he “loves Vietnam”. Mr Thanh said the project would be licensed once “some issues become clearer”.

As government issues more favorable policy on allowing foreign investors in retail buisiness, Vietnam soon will find more retail investment opportunit

2004-10-15T20:10:00.000-07:00

Foreign investors have another attractive investment opportunity as Vietnam has announced its policy on encouraging the establishment of modern distribution networks.

The Ministry of Trade (MOT) is drafting policies aimed at encouraging investors from all economic sectors to consruct and operate modern distribution networks in place of existing systems, said Phan The Rue, Deputy Minister of Trade.

A “modern’ distribution network is formed by supermarkets, shopping centres, department stores, convenience stores and other forms of product distribution networks prominent in the world, while the ‘traditional’ method equates to Vietnam’s long prevalent market system.

When drawing up plans for economic development in cities and provinces, local authorities will reserve land sites for development of modern distribution centres, said Mr Rue. The State will promulgate regulations on supermarket and trade centres that will serve as the basic component on which regions can construct distribution networks.

“The regulations are expected to come out in September after three years of drafts,” said Mr Rue.

Supermarkets have mushroomed over the last two years in Vietnam. At the end of 1995, Vietnam had only 12 distribution centres (10 supermarkets and 2 trade centres) in six of 64 cities and provinces. By the end of August 2004, the figures have risen to 170 (140 supermarkets and 30 trade centres). In addition, there are 600 more small-scale stores in big cities and downtowns. In Hanoi and HCM City, a system of big shops and trade centres has been erected to specifically serve international tourists.

Saigon Co-op Mart is known as the biggest local chain supermarket in Vietnam with 14 operational supermarkets in the south. Meanwhile, the 100% owned Metro Cash & Carry and Big C supermarket chain are the biggest and most successful systems in Vietnam.

Initial supermarket successes have prompted investors to expand their businesses in Vietnam. Metro Cash & Carry is planning to set up another centre in HCM City and one in Can Tho City by the end of 2004 to add to the three operational sites in Hanoi and HCM City, and more two centres in Hanoi and Hai Phong Cities by 2005. The Metro’s eighth centre will be opened in Da Nang City in 2008. Four other supermarkets of the Big C supermarket chain are to be set up soon in the country’s four major centres.

According to James Scott, General Director of Metro Cash & Carry, only 5% of product distribution could be considered a modern distribution network, while 95% of products remain distributed by traditional channels. This is low compared to Thailand at 40% modern and 60% traditional distribution. However, he believes the situation is on the right track: by the 2005, rates would improve to 10% and 90% and by 2010: 30% and 70%.

The figures will see a gradual increase as purchasing power increases, purchasing habits change due to higher living standard and industrial living rhythm, he said.

Nguyen Ngoc Hoa, General Director of the HCM City Cooperative Union shared the same view on the development of the modern distribution network. A recent survey on consumption habits in My Tho, Long Xuyen and Phan Thiet Provinces shows that 50% of consumers have bought goods in supermarkets though there are no supermarkets in the provinces. Eighty-five percent of people polled said they would go to supermarkets if the supermarkets were accessible.

There is a trend on shifting from traditional shopping to modern shopping, at supermarkets and department stores, Mr Hoa said. This explains why the modern distribution network gains a 15-20% growth a year, higher than the growth in retail sector (10%) and the economic growth (7%). The modern distribution network ratio in retail market share has risen from 3% in the first days of supermarkets to 25-30% presently.

That is why supermarkets are the investment field where consultant firms advise foreigners to inject money. Besides the two existing foreign owned Big C and Metro, other foreign owned corporations: Parkson and Dairy Farm are eyeing Vietnam’s market, Mr Hoa said.

However, foreign owned supermarkets face limited operation. According to Mr Rue from MOT, supermarkets can only produce and distribute made-in-Vietnam products. They are not allowed to directly import goods from foreign suppliers, but have to import through Vietnamese partners.

Moreover, as Nguyen Van Sang, Deputy Director of the Domestic Market Policy Department under MOT pointed out, investors should consider the trading centre model that fits into the existing reality of Vietnam before making decision.

The model of convenience store, for example, which had success in some South East Asia countries, failed in Vietnam. Masan Company plan of open 300 Masan was not realised, as it was not familiar to Vietnamese people.

Intellectual property enforcement regulations are being drafted by governmets

2004-10-15T20:08:00.000-07:00

Constructing a full legal framework on intellectual property (IP), empowering enforcement agencies, and opening the IP service market are the main points of a project on bettering the implementation of IP rights.

The Ministry of Culture and Information (MCI) and the Ministry of Science and Technology (MST) are drafting a project on raising the effectiveness of IP rights implementation.

Tran Chien Thang, Deputy Minister of MCI said law makers aim to model Vietnam’s IP rights protection system after effective systems in regional countries. The action plan is to be realised over the period of 2005-2009.

The bill on IP is being drafted by relevant bodies and is expected to be submitted to the National Assembly for approval in October 2005, Mr Thang said. The law on IP will be effective six months after the date of approval together with new decrees and circulars. The regulations on fining IP violations will be amended or promulgated for better enforcement of IP rules. The sanctions stipulated in the ongoing legal framework are considered ineffective in deterring IP violations.

Participants in the action plan stressed the need for strengthening the IP implementation network.

Currently, Vietnam has only 30 firms providing IP-related services with 150 staff. The IP firms are now focusing only on the applying for industrial property rights on behalf of their clients.

The low quality of IP services and low qualifications of staff weaken the competitiveness of Vietnam’s IP law firms as Vietnam is opening its service market to foreigners.

In all countries, where there is an IP protection mechanism, the effectiveness of IP protection activities depends a lot on the staff specialising in IP services.

There are two jobs to be undertaken immediately, said Mr Thang. It is necessary to provide in-depth training courses on IP as well as to ease the requirements on providing IP services.

One objective is to increase the professional working staff in the IP service sector to 1,000 by 2009, said Mr Thang. About 100 people will be sent abroad to attend training courses on IP, and they will serve as cadres central to IP activities in Vietnam.

Vietnam will open its market to welcome foreign-owned law firms to conduct business here, he added.

Other measures will be taken to improve the awareness of people on IP. Training courses will be open to mass media agencies, while IP will be a subject in the syllabus at the Law University.

Intellectual property disputes not fought out in courts

2004-10-15T20:07:00.000-07:00

VietNamNet – Most intellectual property (IP) disputes have been settled through administrative means, while legal proceedings have been overlooked, experts say.

Although current legal regulations stipulate three types of sanction, namely civil, criminal and administrative, to ensure the implementation of IP rights, only administrative procedures have been applied.

Parties prefer settlements

To date, the number of lawsuits brought to court has been small. According to preliminary statistics, between 1995 -1997, the courts handled and settled just 16 disputes related to industrial design, and only two related to trademark infringements. The number increased in 1998 and 1999, rising to 31 suits. However, in following years it fell, with 2001 and 2002 having only one case per year, while in 2003, two cases were filed. The 1998-2003 period saw only 54 IP related suits filed and brought to court.

“It is rather a small figure compared to thousands of cases that have been settled at administrative agencies,” said Tran Chien Thang, Deputy Minister of Culture and Information (MCI).

In principle, when disputes arise, the aggrieved party can sue the other party for IP violation at the courts and claim for damages. Once property rights have been violated, the court serves as the most effective tool to protect against IP violation.

Nevertheless, nearly all the cases have been diverted to administrative agencies and settled by these agencies, and the courts see fewer cases. In the last two years, only one case related to industrial property violation has been taken to court, while no cases involving production and distribution of counterfeit goods has been filed.

Procedures overly complicated

Le Phung Hao, Deputy General Director of Kinh Do Company said that most enterprises prefer settling disputes through administrative means because it takes less time due to simple procedures. He acknowledged, however, that administrative procedures do little to discourage future violation.

Punitive measure meted out by administrative agencies see blackhearts slapped with miniscule fines for the actual violation, yet no damages are awarded to the IP owner. Little more than a wrist slap, the fines do little to deter further violations.

Mr Hao pointed out that complicated procedures leave IP owners hesitant to take their case to court.

It takes about 4-5 months on average for a case to be settled in court. If the involved parties decide to appeal to a higher court, it may be years before a final decision is reached.

Do Trong Hai, Lawyer, Deputy General Director of Investconsult Group said he knew one case lasted three years before the complainant finally gave up, as he could not lose even more time following legal proceedings.

Mr Thang from MCI blamed the unclear legal framework and the low level of qualification among court staff for prolonged proceedings. At the moment, only a handful of staff have received in schooling in IP matters. Meanwhile, IP has only just been ‘introduced’ in universities; it has never been studied in-depth before, he said.

Order must be restored

Claims through administrative agencies are not the best avenue for dispute settlement, said Mr Thang. In future, civil procedures must play the key role in IP dispute settlement, while administrative sanctions must be seen as additional solutions only.

Mr Thang also revealed that the relevant bodies charged with IP rights management are calling for a new legal framework that facilitates improved operation of courts as implementation bodies of IP rights protection.

Aggrieved parties must receive satisfactory compensation for the loss caused by IP right violation, and proviso for this principle must be made in as yet unwritten legal documentation, Mr Thang said.

“It is the right time to take drastic measures to ensure the protection of IP rights in Vietnam,” Mr Thang said.

Washington state governor vist's to Vietnam seeks more trade

2004-10-15T20:04:00.000-07:00

The historical visit by largest and most diverse delegation from Washington State has yielded positive results with the business opportunities open for the both sides.
During the four-day visit, Washington State Governor Gary Locke and his accompanying delegates repeated their interest in closer trade ties with Vietnam.

The Governor, who promoted Washington grown potatoes and apples by peddling fruit and dishing out French fries, outlined ambition to become the US largest trade partner of Vietnam.

Potatoes and apples were two Washington State products the delegation promoted during their stay, however, there are a number of other products and services the State wants to offer in Vietnam, said Juli Wilkerson, Director of the Department of Community, Trade and Economic Development (CTED).

For example, IT and software are also leading Washington products. The state exports an estimated $5-10bil in software each year. Aircraft are another product the state aims to export to Vietnam, said Ms Wilkerson. The Governor is taking this opportunity to market the Boeing 7E7, which is soon to be available on the market.

Mr Locke did not forget points about Washington’s wines during the meeting with officials from the Vietnam Chamber of Commerce and Industry (VCCI), and other business associates. He said that California produces the highest quantity of wine in the US, but Washington wine is more renowned for quality.

Felix Vargas, with the Herrmann Law Firm said that Washington wine producers are planning to export wine to Vietnam.

Although Vietnam imposes high taxes on wine, which makes the product more expensive, initial conversations with businessmen in Vietnam showed a possibility of selling wine in the country, Mr Vargas said. An exhibition about wine may be organised in both HCM City and Hanoi in near future, to introduce Washington wine to businessmen and the citizens of Vietnam.

“Vietnam has a large tourist industry that requires best food and best wine. Vietnamese food is excellent, and we think we can offer the best wine, “ He said.

The Washington officials have lifted concerns over US policy for agricultural subsidies, which help Washington apples and potatoes compete with domestic produce.

“No subsidies for apples and potatoes,” said Robert Hamilton, Washington State Governor’s Advisor for Trade Policy.

Opportunities for Vietnamese enterprises to trade and make investments in Washington are also open.

Rice, shrimp, fish, and coffee are the products that can be exported to Washington, said Ms Wilkerson. Furthermore, Washington imports a large volume of clothing and textiles, worth around in $301mil import turnover last year alone.

Over the year, two-way trade posted value of $95.7bil. Vietnam was Washington State’s 13th largest export market with exports exceeding $735mil. Washington State is the US leader in exports to Vietnam, brought about by the sale of several Boeing aircraft.

Explaining Mr Locke plugging of Washington State as a great place for investment, Ms Wilkerson from CTED said that the state is an international hub with world-class port facilities, a skilled labour force, and has other competitive edges.

“In a study completed in May 2003, Washington ranked the eighth best state the country for business tax climate. We have no personal income tax, and no corporate income tax,” she said.

Asked if trade barriers and quota limits installed by the US Government would hamper trade ties between the two sides, the Washington lawyers said they look forward for fair trade and trade liberalisation.

Mr Vargas stressed that the Vietnam-US Bilateral Agreement (BTA) has yielded business opportunities for the both sides. Furthermore, the official WTO membership that Vietnam expects will also bring good opportunities.

Valuating the opportunities of doing business with the Washington State, Hoang Van Dung, VCCI Chairman stressed that these opportunities are worthy of taking into consideration.

Washington is 30 hours closer to Asian markets by ship than other West Coast ports with an excellent network of vital and container-friendly ports. Shippers can also speed goods to European markets by taking advantage of a time saving air route over the North Pole. It is very convenient and cost saving for Vietnamese companies to export to the US and other countries via Washington ports.

Vietnam is launching a programme on trade promotion with the US. The enterprises that can show feasibility study in doing business with the US will be supported by the State. They will be given 50% of the cost needed for excursions or visiting the US to seek business opportunities, Mr Dung said.

New Land law 2003 still has investors in doubt

2004-10-15T20:03:00.000-07:00

While law makers affirm that under the new regulations in the Land Law 2003, it will be easier to get land for business, serious doubts remain among investors.

Enterprises of all economic sectors have the right to equal access to land for production and business space without differentiation based on ownership.

Foreign invested, State-owned and private enterprises are to have equal opportunity to lease or be allocated land from the State, a level playing field must exist for all enterprises, said Mai Ai Truc, Minister of Natural Resources and Environment (MNRE).

However, investors remain sceptical that the difficulties in acquiring space for enterprises could be settled overnight.

Nguyen Trung Thuc, Director of the Truong Sinh Industrial Company, who is also the Chairman of the Vietnam - Germany SME Club related his difficulty in acquiring shop space in the An Khanh Industrial Complex in Ha Tay Province.

His company and local residents agreed on the cost for site clearance at VND25mil per 360 sq m. However, local residents later reneged, asking VND40mil per 360 sq m.

“Commercial transactions between investors and locals are not governed by law,” Mr Thuc said. As a result, investors have no legal framework or guidance to negotiate with local residents to clear land for business.

Nguyen Truong Son, Director of the Nghi Tam Investment and Tourist Services Company had a similar story. Six meetings in six months between his company and local authority’s representatives left them no closer to a land deal as when the meetings began.

Meanwhile, Huynh Xuan Long, Director of the Huynh Long Company claims he was asked to pay VND30mil per sq m on top of land costs before gaining official access to an agreement.

Land prices are also a source of concern within the business community. According to Pham Gia Tuc, Secretary General of the Vietnam Chamber of Commerce and Industry (VCCI), many enterprises could not even rent land in industrial zones due to inflated land leases.

The fee for leasing one sq m of land in an industrial zone near Hanoi is US$80 for a 50-year lease. That translates into a start up cost of $1.5mil for 2 ha, not including annual fees. A small industrial plot still fetches VND500,000 per sq m, heavy overhead for any developing business.

The new Land Law 2003 is designed to compensate local residents according to the “market price”, not on “land prices stipulated by the State”. Many feel it will be even more difficult to acquire land due to rampant speculation.

Enterprises in Hanoi currently pay VND100,000 per sq m for land clearance, but with the new price framework, costs would rise to VND600,000 - 700,000, outside the budget of SMEs in Vietnam according to Vu Duy Thai, Deputy Chairman of the Hanoi Commercial and Industrial Association.

Mr Truc from the MNRE recognises investor concerns, but affirmed that the new Land Law would help settle existing problems. In the case of Truong Sinh Company, he said the ministry would strive to mitigate deals with local residents, and only allocate land after it has been cleared.

“With an open policy, enterprises will have ample choices for land space to fit their needs,” he said.

Minister Truc said administrative procedures will be simplified, and staff that extorts from investors will be severely punished.

An open dialogue between the MNRE heads and enterprises was organised last weekend in Hanoi. Over 100 enterprises participated from the northern area, as a precursor to the meeting between the Prime Minister and the business community to be held in mid October.

Judicial Appraisal ordinance issued

2004-10-15T19:50:00.000-07:00

Any individual who has a university degree, five years experience in their profession, a civil capacity and good ethics can become a judiciary appraiser, regardless of whether they are privately employed, according to the new Ordinance on Judiciary Appraisal issued yesterday by State Presidential Office.

Previously, appraisers were only selected from within the State sector.

Deputy Judicial Minister Hoang The Lien said recent judiciary appraisal work has made important contributions to litigation and to the fight against crime, as well as to the protection of interests of the State and of its citizens.

But besides its positive contributions, judiciary appraisal work has also showed weaknesses and failed to respond to the growing demands of judicial activities and the renovation of judiciary appraisal work, he said.

The new ordinance is expected to provide the legal framework for the reorganisation of legal appraisal work, in order to ensure accuracy and objectivity in litigation.

The ordinance, approved by the National Assembly Standing Committee last month, will come into effect on January 1, 2005.

With seven chapters and 48 articles, the ordinance defines the rights and duties of individuals and organisations involved in Judiciary appraisal, its proceedings and procedures, and the State's management over judiciary appraisal.

The State will facilitate individuals' and organisations' participation in judiciary appraisal activities and provide material and technical facilities for the practice of judiciary appraisal, the ordinance says.

It adds that judiciary appraisal is carried out at the request of individuals and organisations taking legal action to serve their lawsuits.

In cases where domestic judiciary appraisal organisations fail to meet these litigants' requirements in professional knowledge and facilities, it is possible to hire foreign judiciary appraisers.

The country now has 289 judiciary appraisal organisations with more than 2,000 employees.

Vietnam News Oct 16, 2004

US$115 million Highest building in Hanoi - Hanoi City Complex expectst to be licensed soon

2004-10-15T19:48:00.000-07:00

The SA Coralis Corporation from Luxembourg will build Vietnam’s highest tower on Lieu Giai Street in Hanoi, said Nguyen Do Khue, Deputy Director of the MPI’s Investment Department.

According to Mr Khue, this project, with a total investment capital of US$115mil, is soon to be licensed.

The project is called the Hanoi City Complex, and is to include modern apartment blocks, office buildings, trade centres and an international conference centre.

This will not only be the highest building in Vietnam but also the largest foreign-invested real estate projects in Hanoi in recent years. Office building and apartment block projects in Hanoi are predominantly invested domestically.

VietnamNet Oct 16, 2004

2004-10-15T19:45:00.000-07:00

Hanoi City Complex

2004-10-15T18:58:00.000-07:00

Van Thinh Phat Ltd put into operation its Windsor Plaza Hotel in HCM City's District 5 on October 9. The building with 22 stories comprises a shopping mall and a five-star hotel. The shopping mall covers the four lower floors, having about 2,000 booths selling clothing, jewelry, watches, glasses, electronics, home appliances, food, souvenirs, handicrafts and other items. The hotel, which occupies 15 levels from the eighth to 22nd with 392 rooms, is scheduled for grand opening in December. The fourth to seventh stories will be used as bars, restaurants of different styles, a gym section and beauty care services. According to Nguyen Huu Lap, the company's deputy general director, the project is worth more than US$50 million.

2004-10-15T18:55:00.000-07:00

Windsor Plaza Hotel

Vinh Long may Housing and recreation complex

2004-10-13T19:19:00.000-07:00

Three U.S.-based enterprises owned by Viet Kieu (overseas Vietnamese) are working on a project to develop a recreational and housing complex covering 150 hectares in the Mekong Delta province of Vinh Long.

The investors, led by Real Estate Broker of West Realty Network Inc, have set up the wholly foreign-owned H&H Enterprise in Vietnam to prepare for the investment, said Hugh Hieu Nguyen, director of the newly-established firm.

"The three companies have expressed a keen interest in this project for a long time, and if approval is forthcoming, we will carry out the project later this year," he said.

The project will be developed on An Binh islet in Long Ho district, 40 kilometres from Ho Chi Minh City.

Director of Vinh Long province's Department of Planning and Investment, Phan Anh Vu, confirmed the project's intentions, saying the provincial authorities have agreed in principle to allocate 150 hectares of land to the investors.

The project will be divided into three stages, the first one costing US$15 million for building high-class villas on 50 hectares to be rented or sold to Viet Kieu or rented to expatriate foreigners.

The second stage will be carried out five years later, with the investors to develop a 50-ha recreational park modeled on Disneyland. "This park will be on par with other modern theme parks in Thailand or other Asian countries," Nguyen said.

In the last stage, the company will develop houses of different styles, incorporating Spanish, British and French architectural influences. This third stage will also provide tourist and relaxation services, he added.

Asked why the company has chosen to invest in Vinh Long, Nguyen said his company had surveyed other localities, including Phu Quoc, Nha Trang and Da Nang, but decided to choose Vinh Long as there were no major recreational resorts for tourists in the Mekong Delta.

What's more, he added, An Binh is a beautiful islet that has been earmarked for tourism development, and the provincial government has provided a great deal of support. The project, once in place, will help lure tourists to the province, and will act as a catalyst to attract other investors to the area, he said.

Sumitomo Bank gets nod from Vietnam's central bank for its rep office in Saigon

2004-10-13T19:13:00.000-07:00

The Sumitomo Mitsui Banking Corporation (SMBC) plans to establish a representative office in Vietnam to explore business opportunities, following a nod from the State Bank of Vietnam last week.

The Japanese bank has been permitted to run the office for five years, with its main tasks defined as researching the market and reporting to its headquarters in Tokyo.

The office is forbidden to do any business to generate profits, though it can follow up on contracts signed by the Sumitomo Mitsui Banking group with Vietnamese banks and enterprises.

It will help its parent advise, arrange and provide finance for Vietnamese projects in accordance with local laws.

Established in 2001 through a merger between Sumitomo Bank Limited and Sakura Bank, SMBC has become one of Japan's leading banks in corporate banking, capital markets, asset management and e-commerce.

Although it has yet to establish an official presence in Vietnam, this financial group became known in the country two years ago after winning a bid to underwrite and arrange a guaranteed loan for the famous Phu My 2-2 project, the first wholly foreign-invested BOT power plant in Vietnam.

(Oct. 11, 2004)

Visa steps up efforts in promoting its credit card use in Vietnam

2004-10-13T19:10:00.000-07:00

Visa International, the world's leading credit card group, plans to open its first office in Vietnam by the end of this month after operating for more than a decade in the country.

"We have applied to the Vietnamese authorities for the establishment of an office and things seem to be going smoothly," confirmed Rupert Keeley, president and CEO of Visa International Asia Pacific Ltd. "We hope to get the go-ahead to inaugurate our first office here this month."

"There's huge potential to develop a card market in Vietnam in the long run and that's the reason why we want to set up an office here," he explained.

Country manager Gordon Cooper said that after setting up the representative office, one of Visa's targets would be to focus on developing debit card use in the local banking population and increase the use of electronic transfers to replace cash payments.

"Our initial target market will be tourists," he said. "We aim to facilitate tourist spending on Visa cards at local merchants or through ATMs, bringing incremental tourism revenue for the country."

According to the company's figures, Visa card use by foreign visitors in Vietnam reached more than US$200 million in the past year - four times more than the amount spent by Vietnamese people.

"So, boosting the number of machines that accept Visa cards in hotels, restaurants and tourist shops will be our first priority," Cooper said. "We will also work with local banks, regulators and key players in the market to help them implement global best practices and enable Vietnam's credit payment industry to leapfrog to the latest technology and standards."

In terms of infrastructure, Visa plans to link VisaNet - a system that enables the fast and accurate management of 10,000 deals per second - with a number of local networks such as BankNet.

Visa came to Vietnam 10 years ago and now has 11 financial institutions among its members, including four state-owned banks and some key joint-stock entities including ACB, Sacombank and Eximbank. These institutions support and enable more than 10,000 local merchants to accept Visa cards for payment.

Among these institutions, only four have issued Visa cards, namely Vietcombank, ACB, the Hong Kong and Shanghai Banking Corporation (HSBC) and Singapore's United Overseas Bank Limited (UOB). The first Visa card was issued in Vietnam by ACB in 1997.

For the 12-month period up to June this year, the number of Visa credit and debit cards in Vietnam rose to 53,000 - a year-on-year increase of 118%. Visa's total card sales volume recorded US$54 million while international Visa card-holders spent US$207 million in Vietnam.

Gold price rises sharply as oil price hits new high

2004-10-13T19:06:00.000-07:00

The price of gold increased sharply in the domestic market on Monday as a result of the rising price of oil on the world market, said Nguyen Thanh Truc, Director of the Gold, Silver and Gemstone Company under the Bank for Agriculture and Rural Development.

The price of gold from Saigon Jewellery Company (SJC) in the Hanoi market surpassed a rate of VND8 million per tael on Monday. Meanwhile, SJC gold launched by the Gold, Silver and Gemstone Company was bought at more than VND7.9 million per tael and sold at VND8.1 million per tael.

Major gold and silver trading companies such as Bao Tin Minh Chau, Hong Phat and Kim Quy also offered the same high buying and selling prices.

According to economic experts, gold price hikes last weekend were attributable to the impact of oil prices around the world, which rose to a record US$52 per barrel. Gold prices in the international markets are currently priced at US$422.5 per ounce, equivalent to import prices of more than VND8.08 million per teal.

Vietnamese gold and silver trade companies are currently selling gold for about VND70,000 per teal lower than international prices.

Economic experts predicted that gold prices may keep increasing in the next few weeks as the world oil prices continue to rise.

Since early this year, the Gold, Silver and Gemstone Company has imported around seven tonnes of gold despite low domestic consumption and high global prices. But, the company has just stopped importing.

Gold price rises sharply as the oil price hits new high

2004-10-13T19:05:00.000-07:00

A new satellite township in southern Binh Duong approved for Ho Chi Minh (Saigon)

2004-10-13T18:50:00.000-07:00

Permanent Deputy Prime Minister Nguyen Tan Dung has approved a project to build a satellite township for industries and services for HCM City in southern Binh Duong Province.

The township would come up in a 4,200ha area provided by the Thu Dau Mot Town, Tan Uyen and Ben Cat districts of the province.

The Deputy PM who met Binh Duong authorities, yesterday, heard a progress report on the province's site clearance process. The province has spent VND1,300bil (roughly US$83.5mil) as compensation for clearing 86% of the project area. Nearly three quarters of the project area has been registered for investment.

Mr Dung urged provincial authorities to evaluate the environmental impact of the project, ensure rehabilitation and create jobs for the local people.

2004-10-13T18:28:00.000-07:00

SJC 40-story Twin-Tower

SJC to build 151m high twin tower in downtwon Saigon

2004-10-13T18:24:00.000-07:00

CBRE Vietnam revealed that the US branch of the Company has put forth a project to build the SJC Towers, the highest of their kind in HCM City.

This towers are to be built at a key four-road intersection in District 1, including Le Thanh Ton, Nam Ky Khoi Nghia, Le Loi and Nguyen Trung Truc Streets with the Saigon Jewellery Company (SJC) investing a total of US$70mil in the project.

According to the design, the twin towers will have 40 story towering 151m high, an underground car park and total floor space of 60,000sq.m.

The project is awaiting approval from the HCM City People’s Committee.

中国将拥有首部民法典

2004-10-12T19:51:00.000-07:00

本报讯　引人注目的中国首部民法典有望在本届人大任期内通过。在日前召开的中国法学会诉讼法研究会上，全国人大法制工作委员会巡视员孙礼海透露，法工委目前的工作重点将放在民法典的制定上。

　　民法规范了平等主体之间的财产关系和人身关系，是解决合同纠纷和侵权民事纠纷的法律准绳。公民的衣食住行、工作娱乐、婚姻家庭等一切日常活动都离不开民法；企业的买卖、租赁、运输、仓储、融资、结算、产品开发等一切经营活动也都离不开民法。2002年12月23日九届全国人大常委会首次审议民法典（草案）。民法典草案共分九编，累计共有1200多条，是新中国法制史上条目最多、内容最多的一部法律草案。去年底，十届全国人大的立法规划中又安排对民法典分编审议，审议其中的物权法、侵权责任法、涉外民事关系的法律适用法三编。

　　孙礼海透露，民法典必须在本届人大通过。因为前两届人大已非常重视民法典的制定，但由于这是我国第一部民法典，有比较多的棘手问题，所以一直到现在也没有完成。民法典的制定是重中之重的工作，本届人大一定要通过。所以法工委目前的工作重点将放在民法典的制定上。法工委将争取在这个月提交物权法（草案）给全国人大常委会审议，希望明年3月份通过。国务院今年也会提交公证法，最高人民法院还将提交强制执行法。

Vietnam's tallest building may come to Hanoi

2004-10-12T19:36:00.000-07:00

A Luxembourg company is set to build the tallest building in Vietnam, a 65-storey tower in Hanoi’s Ba Dinh district.
The $115-million skyscraper would nearly double the height of the 33-storey SaigonTrade Centre in Ho Chi Minh City, the country’s current tallest tower.

Nguyen Do Khue, deputy director of Hanoi Authority of Planning and Investment, told Vietnam Investment Review that he expected the firm, SA Coralis, to obtain a licence for the project this month.

“The foreign investor has proven their financial ability, which was our main concern,” Khue said.

The Ministry of Foreign Affairs told the government and the Ministry of Planning and Investment earlier this month that it had investigated Coralis’ capacity and found the real estate project to be financially viable, he added.
The government gave in-principle approval to the project last month, but asked relevant agencies to determine if the investor was financially strong enough to carry out the project.

Coralis’ high-rise tower would include apartments, offices, commercial space and an international conference facility, on Lieu Giai Street near the Daewoo Hotel.

This building is poised to become the largest wholly foreign owned property project in Hanoi, with all other major real estate developments in the city have been built by joint ventures between foreign investors and Vietnamese companies, who typically contribute capital in the form of land use rights. Khue said this structure often resulted in unprofitable operations, and the state gained little from the land use rights it contributed.
But, the deputy director warned, if Coralis did not implement the project within two years of receiving a licence and could not complete basic construction within three years, its licence would be revoked without compensation.
“The conditions will be very strict for the investor,” Khue said.

Vietnam has recently eased entry into the real estate market – the residential segment in particular – for foreign investors who obtain permission to build large developments.

Keppel Land of Singapore has been permitted to build the $130-million Saigon Sports Centre and the $35-million Riviera Villas in Ho Chi Minh City, while Vietnam Land of Hong Kong has joined with Saigon Real Estate and Construction joint stock company to develop the $156-million Saigon Pearl, an apartment, office and shopping complex.

More firms go into developing office buildings

2004-10-12T19:30:00.000-07:00

Two Hong Kong property companies have announced plans to build office buildings for lease in Ho Chi Minh City as developers regain confidence in a market short on space but where occupancy rates are high.

Although most developers have shown strong interest in lucrative residential developments, a few others are mulling schemes to build high-rise office blocks in the city where no foreign-backed office space has come onto the market in the past five years.
A joint venture between New World Hotels Holdings Hong Kong and Saigontourist Holding Company, which built the 560-room New World Saigon Hotel, now wants to branch out into the office leasing business.

The joint venture is currently pondering a plan to build an office building of 25 to 35 floors on 1,850 square metres near its hotel for $25 million, according to a New World senior executive.

Another foreign-backed development is slated for District 1 as Ben Thanh Tourist, Vietcombank and Hong Kong’s Bonday Investments have signed a joint venture contract to build a 35-storey office block for $55 million.

When complete in late 2006, the building will provide 77,000sqm of office space for lease, including retail and restaurant outlets near Me Linh Square. Vietcombank would lease 10 floors of the building for its offices.

“The development would be effective economically as it is located near the commercial and financial area in second city that would lure big multi-national companies to lease space,” Vietcombank deputy general director Nguyen Phuoc Thanh said.

Hong Kong’s Vietnam Land, which built Sunwah office tower, has expanded its business and entered into a joint venture with a local company to build four office blocks of 13 to 25 floors as part of the massive $156 million Saigon Pearl residential development.

`Other local developers have set their sights on two properties in District 1, including two 39-storey residential, office and retail towers developed by Savico, and an $18 million office building in Le Thanh Ton street, bankrolled by shipping company Gemadept.

Peter Dinning, general director of property company Dinning and Associates, said many new projects had been planned.
“But, I know only one will start construction soon,” said Dinning. No new large office buildings have opened in Ho Chi Minh City in the last five years except Bitexo and e.Town, which are both owned by local developers and recording high occupancy.

Real estate agent Chesterton Petty has forecast that new office supply in the second city would be particularly constrained next year with only 5,500sqm in new space compared to 27,500sqm this year and 32,900sqm in 2006.

Ho Chi Minh City has some 240,000sqm of office space available for rent and average occupancy is 90 per cent.
The average monthly rent has picked up from the record low of $14.70 per square metre at the end of 1999, to $20.70 this year.
A CB Richard Ellis survey from early this year showed Grade A office space in the second city was the fifth highest in Asia, at around $28 per square metre per month.

An Dong Plaze opens after 10 years delay

2004-10-12T19:27:00.000-07:00

Ten years later, commercial centre finally cuts the ribbon : - A commercial centre in the heart of Ho Chi Minh City’s Chinese quarter threw open its doors last week and is set to add a five-star hotel, restaurants and other facilities soon.

The new five-storey An Dong Plaza, opened just in time to catch the throng of local and international visitors during the year-end business season, will sell souvenirs, cosmetics and fashion items including locally made brocades, handicrafts and leather products.
The mezzanine will be set aside for electronic and IT products including mobile phones and computers.

Van Thinh Phat company, the project’s developer, said the plaza had attracted a large number of tenants, with more than 80 per cent of ,0its 1800-square-metre space already sold.

A 10-year lease for a unit ranges between $11,000 and $160,000, depending on size and location. Tenants can pay in one instalment or over 10 years with financial support from local banks. Their leases are transferable mid-term.

Work on the plaza, originally promoted by Viet Hoa Bank, began in 1993 before being suspended in late 1997 due to financial difficulties.
The new owner, Van Thinh Phat, resumed construction in June 2002 based on the original design.

When the rest of the plaza is completed, it will have restaurants and a service section from the fourth to seventh floors and a five-star hotel with 392 rooms from floors eight to 21, the Windsor Plaza Hotel – all of which are set to open by the end of this month.

Nguyen Huu Lap, deputy general director of Van Thinh Phat Company, said his company would combine the advantages of the shopping centre, restaurants and service section with the facilities of the hotel.

The latter include a 1,500-seat conference hall with a modern audio system, high-speed Internet transmission and other facilities to exploit MICE (meeting, incentives, conventions and exhibitions) activities.

He told Vietnam Investment Review last week that his company had established ties with more than 10 travel agencies from Germany, Australia, Japan, Canada, the US, Taiwan, Hong Kong, mainland China and Thailand to promote MICE programmes at the hotel.
“As meeting-related tourism is showing promise, the Windsor Plaza Hotel is expected to become a venue for MICE activities,” he said, adding that up to 70 per cent of the hotel’s 392 rooms have now been registered [by the travel agencies] for the year-end peak season.

Vietnam Plans To Make Phu Quoc Island A Tourism Hub

2004-10-12T13:07:00.000-07:00

HANOI, Oct 12 Asia in Focus - Vietnam's Phu Quoc Island is to be turned into a hub for tourism and trade. The government has given the greenlight to the investment scheme submitted by the southern province of Kien Giang.

* Under the project, the island's facilities, including roads, railways and airports will be upgraded.

* The provincial government and Ho Chi Minh City will provide financial aid and human resources to ensure its success.

SUMMARY

Vietnam's Phu Quoc Island to be turned into a hub for tourism and trade

ASIA IN FOCUS

2004-10-11T20:55:00.000-07:00

Saigon Sports City to be developed by Keppel

Opportunity for Vietnamese to buy apartment in high quality buildings

2004-10-11T01:53:00.000-07:00

Foreign property developers, who previously leased mainly to foreign customers and businesses, are now showing increasing interest in the development of high quality apartment buildings to be sold for Vietnamese people.

Marc Townsend, director general of CB Richard Ellis company said, “I believe several new high quality urban centers will be built in Hanoi and Ho Chi Minh City for Vietnamese customers in the next 12 months”.

Foreign investors joined the property market in the mid 1990’s, when most foreign companies from Singapore, Hong Kong. Malaysia, France and Thailand built hotels and offices in the city’s downtown area for lease to foreign companies.

High quality office and apartment projects such as Landmark, Summer-set and Sedona Suites, in both Hanoi and Ho Chi Minh City, have rented most of their space to foreigners.

However, most foreign investors have hesitated joining the construction of residential complexes fearing they wouldn’t retrieve capital or would face losses.

With the government’s incentive policies encouraging both domestic and foreign investors to participate in housing development projects, property developers now seem interested in the market.

Preferential tax, land rental and loan capital incentives have encouraged several foreign property developers to begin construction of high rise apartment buildings for Vietnamese people.

The Thang Long South urban area joint venture company, Ciputra, a Hanoi based foreign company, is the first company authorized to build houses for Vietnamese customers.

After a prolonged hiatus the company is now making a comeback on the real estate market. Ciputra is presently building 700-high rise apartments and 400 villas expected for completion by early next year. In the second phase, the company will invest U$1.1 billion to build ten high rise apartment complexes with 1,500 apartments and a large 12 ha trading center.

According to director David Arndorff, in the next five years the company will complete a new urban area with 50 high-rise apartment buildings, 2,000 villas, hospitals, schools, shops and offices, and a trading center. The project is worth U$2.1 billion.

Foreign-invested property development projects have not only applied modern construction technology but also help ease the short supply of high quality housing for local residents.

Vietnam’s fast economic growth, and its large overseas remittance of $3 billion per year, has sparked a growing demand for high quality accommodation to improve the local people’s quality of life, said Linson Lim, chief representative of Keppel Land Group in Vietnam.

Last week, Keppel Land Ltd of Singapore and Hong Kong’s Chiap Hua Group announced their plan to build a complex comprising of high-rise apartments, retail centers and public recreation and sport facilities.

The project, with an initially registered capital of $130 million, is located on 74 -ha in Ho Chi Minh City’s An Pghu Ward, District 2. Many other foreign investors are also showing interest in development of housing for Vietnamese people; they think it’s a good opportunity for them to enter the real estate market when the demand is increasing, said Marc Townsend.

Vietnam Land (Hong Kong) and Saigon Real Estate joint-stock company are promoting an apartment office complex in Ho Chi Minh City worth $56 million.

A Chinese company has also expressed the wish to build $80 million urban area in Ho Chi Minh City with apartments, a trading center and other amenities.

Vietnam Economy Aug. 27, 2004

Opportunity for Vietnamese to buy apartment in high quality buildings

2004-10-11T00:54:00.002-07:00

Foreign property developers, who previously leased mainly to foreign customers and businesses, are now showing increasing interest in the development of high quality apartment buildings to be sold for Vietnamese people.

Marc Townsend, director general of CB Richard Ellis company said, “I believe several new high quality urban centers will be built in Hanoi and Ho Chi Minh City for Vietnamese customers in the next 12 months”.

Foreign investors joined the property market in the mid 1990’s, when most foreign companies from Singapore, Hong Kong. Malaysia, France and Thailand built hotels and offices in the city’s downtown area for lease to foreign companies.

High quality office and apartment projects such as Landmark, Summer-set and Sedona Suites, in both Hanoi and Ho Chi Minh City, have rented most of their space to foreigners.

However, most foreign investors have hesitated joining the construction of residential complexes fearing they wouldn’t retrieve capital or would face losses.

With the government’s incentive policies encouraging both domestic and foreign investors to participate in housing development projects, property developers now seem interested in the market.

Preferential tax, land rental and loan capital incentives have encouraged several foreign property developers to begin construction of high rise apartment buildings for Vietnamese people.

The Thang Long South urban area joint venture company, Ciputra, a Hanoi based foreign company, is the first company authorized to build houses for Vietnamese customers.

After a prolonged hiatus the company is now making a comeback on the real estate market. Ciputra is presently building 700-high rise apartments and 400 villas expected for completion by early next year. In the second phase, the company will invest U$1.1 billion to build ten high rise apartment complexes with 1,500 apartments and a large 12 ha trading center.

According to director David Arndorff, in the next five years the company will complete a new urban area with 50 high-rise apartment buildings, 2,000 villas, hospitals, schools, shops and offices, and a trading center. The project is worth U$2.1 billion.

Foreign-invested property development projects have not only applied modern construction technology but also help ease the short supply of high quality housing for local residents.

Vietnam’s fast economic growth, and its large overseas remittance of $3 billion per year, has sparked a growing demand for high quality accommodation to improve the local people’s quality of life, said Linson Lim, chief representative of Keppel Land Group in Vietnam.

Last week, Keppel Land Ltd of Singapore and Hong Kong’s Chiap Hua Group announced their plan to build a complex comprising of high-rise apartments, retail centers and public recreation and sport facilities.

The project, with an initially registered capital of $130 million, is located on 74 -ha in Ho Chi Minh City’s An Pghu Ward, District 2. Many other foreign investors are also showing interest in development of housing for Vietnamese people; they think it’s a good opportunity for them to enter the real estate market when the demand is increasing, said Marc Townsend.

Vietnam Land (Hong Kong) and Saigon Real Estate joint-stock company are promoting an apartment office complex in Ho Chi Minh City worth $56 million.

A Chinese company has also expressed the wish to build $80 million urban area in Ho Chi Minh City with apartments, a trading center and other amenities.

Vietnam Economy Aug. 27, 2004

Opportunity for Vietnamese to buy apartment in high quality buildings

2004-10-11T00:54:00.001-07:00

Foreign property developers, who previously leased mainly to foreign customers and businesses, are now showing increasing interest in the development of high quality apartment buildings to be sold for Vietnamese people.

Marc Townsend, director general of CB Richard Ellis company said, “I believe several new high quality urban centers will be built in Hanoi and Ho Chi Minh City for Vietnamese customers in the next 12 months”.

Foreign investors joined the property market in the mid 1990’s, when most foreign companies from Singapore, Hong Kong. Malaysia, France and Thailand built hotels and offices in the city’s downtown area for lease to foreign companies.

High quality office and apartment projects such as Landmark, Summer-set and Sedona Suites, in both Hanoi and Ho Chi Minh City, have rented most of their space to foreigners.

However, most foreign investors have hesitated joining the construction of residential complexes fearing they wouldn’t retrieve capital or would face losses.

With the government’s incentive policies encouraging both domestic and foreign investors to participate in housing development projects, property developers now seem interested in the market.

Preferential tax, land rental and loan capital incentives have encouraged several foreign property developers to begin construction of high rise apartment buildings for Vietnamese people.

The Thang Long South urban area joint venture company, Ciputra, a Hanoi based foreign company, is the first company authorized to build houses for Vietnamese customers.

After a prolonged hiatus the company is now making a comeback on the real estate market. Ciputra is presently building 700-high rise apartments and 400 villas expected for completion by early next year. In the second phase, the company will invest U$1.1 billion to build ten high rise apartment complexes with 1,500 apartments and a large 12 ha trading center.

According to director David Arndorff, in the next five years the company will complete a new urban area with 50 high-rise apartment buildings, 2,000 villas, hospitals, schools, shops and offices, and a trading center. The project is worth U$2.1 billion.

Foreign-invested property development projects have not only applied modern construction technology but also help ease the short supply of high quality housing for local residents.

Vietnam’s fast economic growth, and its large overseas remittance of $3 billion per year, has sparked a growing demand for high quality accommodation to improve the local people’s quality of life, said Linson Lim, chief representative of Keppel Land Group in Vietnam.

Last week, Keppel Land Ltd of Singapore and Hong Kong’s Chiap Hua Group announced their plan to build a complex comprising of high-rise apartments, retail centers and public recreation and sport facilities.

The project, with an initially registered capital of $130 million, is located on 74 -ha in Ho Chi Minh City’s An Pghu Ward, District 2. Many other foreign investors are also showing interest in development of housing for Vietnamese people; they think it’s a good opportunity for them to enter the real estate market when the demand is increasing, said Marc Townsend.

Vietnam Land (Hong Kong) and Saigon Real Estate joint-stock company are promoting an apartment office complex in Ho Chi Minh City worth $56 million.

A Chinese company has also expressed the wish to build $80 million urban area in Ho Chi Minh City with apartments, a trading center and other amenities.

Vietnam Economy Aug. 27, 2004

Opportunity for Vietnamese to buy apartment in high quality buildings

2004-10-11T00:54:00.000-07:00

Foreign property developers, who previously leased mainly to foreign customers and businesses, are now showing increasing interest in the development of high quality apartment buildings to be sold for Vietnamese people.

Marc Townsend, director general of CB Richard Ellis company said, “I believe several new high quality urban centers will be built in Hanoi and Ho Chi Minh City for Vietnamese customers in the next 12 months”.

Foreign investors joined the property market in the mid 1990’s, when most foreign companies from Singapore, Hong Kong. Malaysia, France and Thailand built hotels and offices in the city’s downtown area for lease to foreign companies.

High quality office and apartment projects such as Landmark, Summer-set and Sedona Suites, in both Hanoi and Ho Chi Minh City, have rented most of their space to foreigners.

However, most foreign investors have hesitated joining the construction of residential complexes fearing they wouldn’t retrieve capital or would face losses.

With the government’s incentive policies encouraging both domestic and foreign investors to participate in housing development projects, property developers now seem interested in the market.

Preferential tax, land rental and loan capital incentives have encouraged several foreign property developers to begin construction of high rise apartment buildings for Vietnamese people.

The Thang Long South urban area joint venture company, Ciputra, a Hanoi based foreign company, is the first company authorized to build houses for Vietnamese customers.

After a prolonged hiatus the company is now making a comeback on the real estate market. Ciputra is presently building 700-high rise apartments and 400 villas expected for completion by early next year. In the second phase, the company will invest U$1.1 billion to build ten high rise apartment complexes with 1,500 apartments and a large 12 ha trading center.

According to director David Arndorff, in the next five years the company will complete a new urban area with 50 high-rise apartment buildings, 2,000 villas, hospitals, schools, shops and offices, and a trading center. The project is worth U$2.1 billion.

Foreign-invested property development projects have not only applied modern construction technology but also help ease the short supply of high quality housing for local residents.

Vietnam’s fast economic growth, and its large overseas remittance of $3 billion per year, has sparked a growing demand for high quality accommodation to improve the local people’s quality of life, said Linson Lim, chief representative of Keppel Land Group in Vietnam.

Last week, Keppel Land Ltd of Singapore and Hong Kong’s Chiap Hua Group announced their plan to build a complex comprising of high-rise apartments, retail centers and public recreation and sport facilities.

The project, with an initially registered capital of $130 million, is located on 74 -ha in Ho Chi Minh City’s An Pghu Ward, District 2. Many other foreign investors are also showing interest in development of housing for Vietnamese people; they think it’s a good opportunity for them to enter the real estate market when the demand is increasing, said Marc Townsend.

Vietnam Land (Hong Kong) and Saigon Real Estate joint-stock company are promoting an apartment office complex in Ho Chi Minh City worth $56 million.

A Chinese company has also expressed the wish to build $80 million urban area in Ho Chi Minh City with apartments, a trading center and other amenities.

Vietnam Economy Aug. 27, 2004

SAVIMEX answers housing crunch with new apartments

2004-10-11T00:47:00.000-07:00

Listed firm Savimex plans to begin construction of two projects in HCM City this month to help meet the city’s rising demand for housing.

The projects, in District 3 and District 7, when completed within 18 months will offer around 280 apartments in total, according to Savimex chairman Do Huu Trong.

The 15-floor Nguyen Phuc Nguyen building will be developed on 1,300sqm in District 3. It will boast 88 high-grade apartments of between 75 to 183sqm, and a shopping area on the ground floor.

The nine-storey residential project on 6,300sqm in District 7 will have 180 apartments of 82 to 120sqm. This project will also include a kindergarten, shopping center and some space for sport activities.

Savimex has joined hands with domestic company Cofico and two French companies Apave and Bachy Soletanche, to design, construct and inspect the projects.

SaviDecor, Savimex’s interior decorator, will use furniture made by Savimex to furnish the apartments.

Tallest building in Hanoi to be built next to Daewoo Hotel

2004-10-11T00:06:00.000-07:00

The tallest building in Vietnam is expected to tower in Hanoi's sky as the Government has given the green light to the foreign-invested project that will occupy a prime location in the capital.

Deputy Prime Minister Vu Khoan has asked relevant ministries to examine the legal status and financial capacity of investors in the commercial and office building project following a request of the Ministry of Planning and Investment.

A foreign consortium comprising France's Coralis SA and Germany's LOHR Industrie has proposed building a 65-story skyscraper at Lieu Giai-Dao Tan Intersection adjacent to the five-star Hanoi Daewoo Hotel, with an investment of US$115 million.

The Hanoi City Complex will be located on the site where the South Korean conglomerate Daewoo planned to develop hotel, commercial and office buildings. In the first phase, the company developed the Daeha Business Center, comprising the 411-room Hanoi Daewoo Hotel, a 15-story apartment building and a 15-story office tower. The US$177-million center is a 38-year joint venture between Daewoo and Hanoi Electronics.

However, Daewoo was unable to continue the second phase due to financial distress, leaving part of the site idle.

Hanoi property market has shown sign of picking up after a long period of sluggishness. Most existing office buildings have reported occupancy of 90%, according to a survey by CB Richard Ellis and Chesterton Petty. More buildings will open late this year.

Joint venture to develop 35-story office tower

2004-10-10T23:23:00.000-07:00

A 35-story office and commercial tower will be built in downtown HCM City.

Vietcombank, Bonday Investments Limited (Hong Kong) and Ben Thanh Tourist last week signed a joint venture agreement to invest US$55 million in the project, to be located on 3,200 sq m at 5 Me Linh Square, District 1. The venture will have a legal capital of US$17.6 million, with 52% to be held by Vietcombank, 18% by Ben Thanh Tourist and 30% by Bonday Investments.

Part of the 170-meter tower will be used as the premises of Vietcombank, the rest will be restaurants, retail stores, car parks and offices for lease.

The site overlooking the Saigon River was previously destined for a 55-story office tower joint venture between Ben Thanh Tourist and Germany's Windhorst. However, the project was abandoned due to financial difficulties.

Work on the project is to begin next year and be completed in two years.

[Saigon Times Weekly Issue 677 Sept 25, 2004]

Indochina Group to build underground car park

2004-10-10T23:19:00.000-07:00

The HCM City government has allowed the private property trading and development company Indochina Group to develop an underground car park in downtown.

According to Nguyen Van Loc, chairman and director, the project is suitable for the city center where land is fully occupied. The company will prepare a detailed report on the car park in Lam Son Square near the Municipal Theater and work with relevant authorities to prepare for the project, the first of its kind in HCM City.

The company has estimated that US$32,000 will be invested in each parking space, and the investment cost of the project will depend on whether it has six or nine stories. With six stories, each being able to accommodate 12 cars, the cost will be US$2.3 million. The amount for a nine-story car park will be US$3.45 million.

Indochina will join forces with Fan Si Pan, a trading and construction company, to develop the project using technology of the British firm Trevipark.

The HCM City Service of Communications and Public Works has pledged to encourage the private sector to invest in car park projects. It will ask the city government to provide incentives in land rent and tax to developers.

Phu My Hung pays tax, wants to remit profit home

2004-10-10T23:17:00.000-07:00

Phu My Hung Corp. has paid VND597.3 billion (more than US$37 million) in corporate income tax for its real estate trading from 2000 to June 2004.

According to HCM City Tax Bureau, Central Trading & Development Corporation, the foreign partner in the Phu My Hung Joint Venture, has asked for permission to remit US$31.8 million in profit home. The bureau has requested the Ministry of Planning and Investment and the General Department of Taxation to identify legal and illegal operations of Phu My Hung so that it can determine the amount of profit that Phu My Hung is allowed to repatriate and deal with its illegal earnings.

According to Pham Van Huyen, deputy director of the General Department of Taxation, the tax Phu My Hung has paid is only a preliminary sum, not the real amount it has to pay. The Finance Ministry will work out an accounting mechanism to determine the accurate amount, according to Dau Tu newspaper.

Inspectors from the Ministry of Natural Resources and Environment have worked with Phu My Hung and two other companies, Tan Thuan Investment Construction and Saigon South Investment and Development, on the illegal filling of 45,000 sq m of Ong Kich Canal in Tan Phong Ward, District 7. The inspectors have also asked the companies to restore the canal to its original condition. The Service of Communications and Public Works has asked the HCM City government to force the companies to complete this work by October 15.

Tuoi Tre newspaper reported that Phu My Hung did not have documents regarding the permission for filling and the right to use the filled area.

The Government has instructed HCM City authorities to inspect Phu My Hung's construction of a bridge over the Ca Cam Canal that is not up to technical standard, blocking navigation in the canal.

The Ministry of Public Security is told to investigate into its illegal real estate dealings.

Vietnam targets Japanese tourists for tour promotion

2004-10-10T23:13:00.000-07:00

HCM City Tourism Service will organize a big Japan-Vietnam cultural and tourist fair in HCM City on November 19-21 where it expects to attract thousands of Japanese tourists, 50 travel companies and media outlets in Japan.

The service will hold talks with the city's travel and hospitality firms and make suggestions to boost Japanese tourist arrivals. It hopes to see 3,000 Japanese visitors for the event, which it plans to spend VND10 billion (US$637,000) on organization.

The fair will feature Vietnamese and Japanese cultures, with presentations of ao dai and kimonos, tea ceremonies; painting and photos exhibitions; art shows and contests; exhibitions on tourism in Vietnam; familiarized trips for Japanese media representatives; and other entertainment activities.

The biggest sponsor is Vietnam Airlines, which will offer a discount of US$100 per ticket on the occasion. The airline has also invited famous Japanese pop singer Eri Hiramatsu, artist Kinsui Katori, the Japanese national singing troupe, and flower arrangement and tea ceremony artists.

Other sponsors are Vietnam National Administration for Tourism, the HCM City government and businesses.

Last year, HCM City received 180,000 Japanese tourists. The figure is expected to reach 250,000 this year.

The event also aims to promote Japanese tourist arrivals to Vietnam. Last year, the country welcomed 230,000 Japanese tourists. The target for 2005 is 500,000.

Vietcombank hikes dollar rates

2004-10-10T23:11:00.000-07:00

The HCM City branch of Vietcombank has hiked U.S. dollar interest rates by 30-45 basis points.

The new rates are 1.55%, 1.65%, 1.8%, 32% and 2.4% for dollar deposits with terms of 1, 2, 6, 9 and 12 months. The call deposit rate remains unchanged at 1% per year.

The hikes came at a time when the Federal Reserve (Fed) is expected to raise baseline rates by another quarter percentage point to 1.75%, nudging up the six-month Singapore Interbank Offered Rate (Sibor) to more than 2% from the earlier 1.8%. The soaring Sibor enables Vietcombank to gain a larger margin for its deposits overseas.

According to Nguyen Phuoc Thanh, director of the branch, the higher Sibor rate benefits the bank more, and it's a good chance to attract more dollar funds. The branch's U.S. dollar funds are US$650 million but its outstanding loans are only US$310 million, indicating that it has deposited a big sum abroad.

Vietcombank has received the "Best Bank in Vietnam 2004" award from the Britain-based magazine The Banker, the fifth consecutive year the bank has earned the honor. The award recognizes the bank's good performance last year, when it achieved a 166% rise in gross profit. Non-performing loans made up only 2% of total outstanding loans.

Widening of Nam Ky Khoi Nghia Street to Tan Son Nhat Airport gets funding

2004-10-10T23:10:00.000-07:00

HCM City has decided to spend US$54 million to widen the 3.8-kilometer road linking Tan Son Nhat International Airport with the downtown area. The road on Nam Ky Khoi Nghia Street is the main way for most foreign delegations and tourists to travel from the airport to the city center. The project is also expected to help reduce traffic congestion. More than 90% of the funds go towards compensation costs for affected households along the road.

Gov't allows six FIEs to go public

2004-10-10T23:05:00.000-07:00

The Government has allowed in principle six foreign-invested enterprises (FIEs) to convert into shareholding companies.

The six companies have met the requirements such as full paid-in legal capital and operations for at least three years, with the latest year in profit. They include Taya Vietnam, Austnam, International Food Processing, Taicera, Tungkuang Industrial and Royal International.

According to Phan Huu Thang, director of the Ministry of Planning and Investment's foreign investment department, the conversion will be made within six months under Government Decree 38/CP dated April 15, 2003 on conversion of FIEs. The ministry will receive conversion applications from FIEs until the year's end.

The six FIEs are part of the pilot program for conversion of FIEs into shareholding companies, which aims to diversify foreign investment activities, attract more capital resources and give a fresh boost to the stock market.

Taya Vietnam Electric Cable & Wire
100% foreign-owned
VND165.2 billion
VND10,000
Electric cables and wires

Austnam
Joint venture
VND17.6 billion
VND10,000
Metal roofing sheets

Interfoods
100% foreign-owned
VND179.1 billion
VND15,712
Processed food for export

Taicera Ceramic Industry
100% foreign-owned
VND170.7 billion
VND10,000
Tiles, ceramics

Tungkuang Industrial
100% foreign-owned
VND105.6 billion
VND10,000
Aluminum products

Royal International
Joint venture
US$21 million
US$1
Five-star hotel, recreation

Parkson to enter Vietnam's retail market

2004-10-10T23:03:00.000-07:00

Parkson Corporation Sdn Bhd is seeking permission to enter Vietnam's retail market which is still restricted to foreign investors.

If licensed, the company will spend uS$70 million setting up 10 retail centers in Vietnam, according to the HCM City Department of Planning and Investment. The company will initially set up two fashion shopping centers in HCM City and another in Hanoi, with an investment of US$15 million. The first shopping center is expected to go up at 35bis-45 Le Thanh Ton Street, District 1, HCM City where the luxury Saigontourist Plaza is located.

Later, an extra US$55 million will be invested to open two more stores in HCM City, two more in Hanoi, one in each of Danang and Can Tho, and one in either Hue or Vung Tau. These stores will retail fashion items such as cosmetics, clothing, footwear, jewelry, leather goods, and other kinds of consumer goods. Most of the goods will be supplied by local companies.

Parkson is one of Malaysia's biggest retail supermarket chains.

Dairy Farm, a retail group of Hong Kong, also has plans for operations in Vietnam.

At present France's Espace Bourbon has three Big C stores and Metro Cash & Carry three wholesale centers in Vietnam. Under Vietnam's foreign investment law, the retail market is off limit to 100% foreign investment. However, under the country's commitments to the ASEAN Free Trade Area, the retail market will be opened to foreign investment.

According to the Ministry of Trade, there are 170 supermarkets and commercial centers in Vietnam. The revenue from retail trade and services is estimated at US$20 billion a year.

Vietnamese Pho catered by a Japanese

2004-10-10T23:01:00.000-07:00

The uniqueness of pho Oso is that it is Vietnamese pho made by a Japanese named Tezuka Katsuyoshi

It is a small restaurant on Dong Khoi Street in downtown HCM City, among the luxury shops. People passing by are often attracted by its old architectural style with a wooden sign, wooden doors, wooden chairs and tables, old decorations and wholehearted greetings by its staff. Its name is Oso.

Tezuka Katsuyoshi, the 60-year-old owner from Japan, says he has two passions arising from Vietnam: old-style wooden handicrafts and pho (beef noodle soup). The man born into a family running restaurants in Osaka arrived in Vietnam 15 years ago for sightseeing. It was the culture, climate, nature and the pace of life in Vietnam that has made him a regular visitor to Hanoi and HCM City.

During his stay in Vietnam, in addition to traveling and sightseeing, Katsuyoshi found himself in places in HCM City that sell antiques to meet his desire for objects that are a century-old. He has also collected old-style wooden furniture.

After collecting a considerable number of wooden items that are good to look at, nice and precious, he came up with the idea of owning an old house at the city center, expecting it to become a unique one to receive guests and friends. "Five years ago, I decided to seek permanent residence as a businessman and rented a four-story house on Dong Khoi Street in HCM City for 20 years. It is where Oso Restaurant is now," he said.

Katsuyoshi spent four years redecorating the entire house. As a lover of wooden items, particularly classical ones, he bought high-quality wood such as ironwood and hired artisans to produce doors, chairs, tables, shelves and so on, all being hand-made.

"I have prepared all designs of house-columns, main doors, windows and staircases and have gone to carpentry villages all over the country," he said. Artifacts of different kinds, from chinaware to copperware to stoneware, all of which he got from the area of Le Cong Kieu Street, are displayed everywhere in the house. "I want my house to become a unique house, with features typical of Vietnamese and Japanese styles. I feel happy living in this house," he says.

During his years living in Vietnam, Katsuyoshi has developed a special liking for pho. He thought of making this food the Japanese way. He went to pho restaurants, asking their operators how to make the food and learning by heart how to add spices, select rice noodles, and cut meat. Then, during the times he was back in Japan, he tried making pho with Japanese spices to create a pho of his own style. When he came to HCM City again, he made his pho for some of his acquaintances and, encouraged by their praises, he wanted to make his food known to all Vietnamese and be loved by them. Then came the opening of Oso in September 2003, serving Tezuka Katsuyoshi-style pho.

Katsuyoshi says gastronomy plays an important role in cultural exchanges, so in doing business, he has to persuade customers to enjoy the harmony of tastes and Vietnamese and Japanese gastronomies through his food.

Oso means "Number One" in Japanese, the owner explains, so the restaurant must assure diners it has "number one" quality, besides its own attractions that cannot be found at other pho restaurants in Vietnam.

The first feature of Oso that Katsuyoshi is proud of is the way it is decorated. The four-story house, with its limited width, has been used for selling food. Each story has its own arrangement of tables. Customers can eat pho at dining tables on the ground floor, but on other floors they can eat on a wooden sofa or couch.

All interior decorations are made in old styles, with sophisticated designs. Antiques that Katsuyoshi spent a long time collecting, such as cupboards, shelves, horizontal lacquered boards and statues, can be found throughout the restaurant, making it look smaller and narrower. This has attracted the attention of customers who enjoy the food while looking at the objects, to the pride of their owner.

The soup is another typical thing at Oso. The owner says he stews many bones for the soup to make it sweet without using monosodium glutamate, and beef is cut by machine to have well-shaped slices to attract customers. The flavor powder he uses is also special; it is made of spices and flavors brought from Japan.

The service by waiters and waitresses is another thing Katsuyoshi pays close attention to. He not only asks his employees to be active and enthusiastic in serving customers, but also sets himself as an example by bowing to greet and say thank-you to customers. Employees, from cooks to waiters and waitresses, have also developed a habit of paying attention to customers' favorite dishes or usual requests to keep loyal customers and attract new ones.

Ngoc Dung, the restaurant's manager, says every day the restaurant serves 300-400 customers. Whenever the restaurant is too crowded for its employees to cope, the owner is ready to roll up his sleeves to work as a waiter.

Katsuyoshi says business at Oso has become stable after nearly one year in operation and he is thinking of opening more restaurants in the city. "I'm seeking suitable places to open several new restaurants." He refuses to disclose the investment he has made for his business in Vietnam over past years, but says it will take a long time to break even just by selling pho. "I sell pho, as I would rather do it than make money. I feel happy as customers, both local and foreign, love my pho and appreciate the uniqueness of my restaurant. To make money, the Marina Hotel my family is operating in Japan is enough."

However, he still tries his best to attract more customers, such as by pricing his pho at VND18,000 to VND25,000 a bowl. "I have eaten pho in Japan and other countries. Pho at Oso is the cheapest, as VND18,000 equals 130 yen or US$1.20. I'm selling pho in Vietnam and to Vietnamese, so the price must be acceptable to customers here," he says.

Saigon Pearl office and apartment complex in Saigon (Ho Chi Minh) gets its licnese

2004-10-10T22:41:00.000-07:00

Investors have secured a prime site to create a beautiful apartment development that includes many extra facilities

The US$156-million Saigon Pearl apartment and office project, a joint venture between Vietnam Land (Hong Kong) and SSG (Vietnam), was licensed on September 26. The complex will cover a 10.3 hectare area on Nguyen Huu Canh Street, Binh Thanh District, HCM City

Jonathan Choi, president of Vietnam Land (Hong Kong), says that the venture's foreign partner includes Sun Wah, a multinational of which Choi is the board chairman. Sun Wah engages in seafood, foodstuffs, real estate, finance, infrastructure construction, technology and communications. The group has also invested in Australia, Cambodia, Canada, China, the EU, Macao, Myanmar, Singapore, and the U.S. It has invested in aqua-product processing in Vietnam since 1970. In 1993, together with Marubeni (Japan), it built the 22-story Sun Wah Tower building in HCM City. Another member of the venture's foreign partner is Chun Wo Co., one of the leading construction companies in Hong Kong and the owner of the Sofitel Plaza Hotel in HCM City.

The Vietnamese partner of the venture is the estate and construction shareholding company, SSG, with seven affiliates. SSG won the bidding for the 10.3-hectare area for the Saigon Pearl residential complex project at US$56 million. Each partner holds a 50% stake in the venture. Thomas Chan, a Hong Kong investor who has managed nearly 500 real estate development projects, will be the venture's general director.

Choi says Saigon Pearl is a residential complex with eight 37-story serviced apartment buildings. These eight buildings will comprise 2,144 flats of 82 to 328 square meters, with two to five bedrooms. Every flat has wide windows and balconies to benefit from sunlight and breezes. Though the complex is just four minutes from the city center by car, it is in a quiet and fresh area. These advantages are good for tenants, especially entrepreneurs. The complex also includes four buildings of 13 to 25 stories, with 250 offices for lease. A nursery, school, shopping center and recreational facility, with movie theaters, swimming pools, gyms, tennis courts and steam bath rooms, will also be erected. The complex's roofed parking lot can accommodate up to 1,200 cars and 9,000 motorcycles. Choi adds that leading experts from Australia, the U.S. and Hong Kong have been invited to participate in designing the buildings, interior decoration and landscaping.

As well as the facilities and security as in other serviced apartments and officetels in the city, the biggest advantage of Saigon Pearl is its wide area, which enables the project to be designed in line with international standards, with open spaces and a lot of greenery. A 300-meter-long strip along the Saigon River will have parks and quays for tourist boats. Choi says the project is named Saigon Pearl to emphasize its beautiful architecture and landscape.

Prices for flats have not been set as building costs have not yet been estimated, Choi says. He adds that model flats will be built for potential customers to view, and the price will be lower than that in Hong Kong. "After completing model flats, we will start construction of the project, which is scheduled for completion after five years of construction, if everything goes smoothly."

Paradise resort in Quang Ngai Province

2004-10-10T22:27:00.000-07:00

The HCM City-based Phi Long Investment Company will build a tourism complex near Dung Quat Oil Refinery in Quang Ngai Province. The US$20-million Paradise Resort will focus on eco-tourism, beach entertainment and villas for lease.

Big real estate inspection in HCM City

2004-10-10T22:25:00.000-07:00

The State Inspectorate will carry out a big inspection of real estate in HCM City to look into the relations between State agencies and businesses.

According to the Sai Gon Giai Phong, State agencies under inspection include HCM City People's Committee, the Service of Natural Resources and Environment, Service of Construction, Service of Zoning and Architecture, Department of Planning and Investment, and the people's committees of districts 2, 8, 9, Go Vap and Binh Chanh.

Nine businesses subject to the inspection are Go Mon Real Estate, Phu Nhuan Housing Construction and Trading, District 2 Housing Management and Development, Urban Services and Development, Him Lam, Voluntary Youth Investment and Construction, Minh Son Housing Construction and Trading, Trung Son Construction and Trading, and Saigon 5 Trading.

The inspection, the biggest in the real estate sector in HCM City to date, will cover urban and housing developments in the five districts by nine businesses. Besides State agencies and businesses concerned, inspectors will also examine contractors, entities and individuals that are affected by real estate developments by the businesses.

The inspection will last until December.

Business licensing online - measure adopted by Ho Chi Minh City (Saigon) City Government to improve imvestment environment

2004-10-10T22:03:00.000-07:00

HCM City is the first and only place in Vietnam where online licensing for foreign-invested projects is possible. After five months testing the new service, the HCM City Department of Planning and Investment has received online applications from 32 foreign investors, and has granted 11 licenses. Of the remaining 21 projects, 12 are eligible for licensing, but investors have not brought documents to the DPI for cross reference.

A move to improve investment environment

Officials from the DPI say online licensing for foreign-invested projects is a breakthrough in fighting red tape, an invisible barrier that discourages foreign investors from investing in HCM City. Online licensing helps save time for investors, as they do not have to go to the department many times to complete procedures. It takes only 48 hours to license a project online, as compared with at least five days through the conventional method. However, the new licensing model applies only to simple projects, such as those that are capitalized at under US$5 million and are in garment and IT sectors, and export at least 80% of their output.

In an effort to continue its administrative reform, since September the DPI has applied online confirmation of members of the board of directors and the board of management of foreign-invested enterprises. Enterprises in HCM City can register or get confirmation for the members by filling in forms available online and sending them to the department. As soon as the DPI receives the completed forms, it informs the applicants of the registration. If the forms are in order, investors are asked to go to the department to submit applications, and they receive the confirmation certificates within 36 hours. In case the applications are not in order or have errors, the DPI gives detailed guidance to help investors adjust the application online.

The procedure for establishing or changing affiliated units is the same.

Other reform efforts

Since late August, nearly 500 foreign-invested enterprises in HCM City have received notices from the DPI asking them to send the lists of expatriates working at the board of directors or the board of management in order to receive priority cards for fast immigration processing at Tan Son Nhat Airport. Pham Van Than, head of the department's cooperation and investment promotion division, says that with the cards, foreign investors will be given priority going through immigration, instead of having to queue. The airport authority, police and customs have set up a separate gate for this purpose.

Also, foreign business delegations and big foreign companies which intend to visit HCM City to seek investment and business opportunities can be met at the airport by city officers if they give notice.

To reduce trouble for foreign investors, the DPI will take the role as a one-door service for investment procedures. It will provide investors with information on investment policies, land zoning, markets and prices. Also, investors can receive the tax code, the customs code and other permits at the department without having to go to separate agencies as before.

In particular, the department will update information on zoning in a number of districts and provide it to investors. For example, investors wishing to have detailed information on the construction density at the site they want to develop, the road border, the height limit for construction, the compensation cost and so on, can receive guidance from the department.

The department will coordinate and link its network with other agencies to provide fast and accurate information for investors.

Saigon port to be relocated

2004-10-10T21:56:00.000-07:00

A. Port relocation

1. Tan Cang (New Port) will be moved to Cat Lai and Cai Mep in 2006-2008.

2. Ba Son Shipyard will be moved to an area of Ban Thach (Ba Ria-Vung Tau) in 2008-2009. Part of the old site will be turned into a park and a plot for a high-rise office building complex, except for the section for commemorating late President Ton Duc Thang.

3. Saigon Port: Nha Rong Wharf and part of Khanh Hoi will be moved to Hiep Phuoc in 2006-2010. Other quays will be relocated as of 2010. The new Saigon Port will be built in Cai Mep-Thi Vai. After the relocation, the area of Nha Rong Wharf and Khanh Hoi will be turned into an international quay, shopping center, and park.

4. Ben Nghe and Bong Sen ports will be used for other purposes after 2010. Tan Thuan Dong Port and a vegetable and fruit port will be moved for the construction of a bridge across the Saigon River. Tan Thuan Dong Port is expected to be moved to Cat Lai and the vegetable and fruit port to Hiep Phuoc.

B. Other related projects

1. There is a project for a network of roads connected with ports. The ports will link with the city's beltways and the inter-regional route. Ports on Dong Nai, Nha Be, Long Tau and Thi Vai rivers will connect with HCM City's Beltway 2, the HCM City-Long Thanh-Dau Giay express way, and the inter-regional route. The system of Ba Ria-Vung Tau ports will link with National Highway 51, the Bien Hoa-Vung Tau express way, and the inter-regional route.

2. There is a project for a rail route to Cat Lai-Hiep Phuoc and Thi Vai-Cai Mep Port using the Bien Hoa-Vung Tau railway, connecting with the North-South railway.

Savimex to build apartment buildings in District 1, and District 7

2004-10-10T21:51:00.000-07:00

Savimex will start work on two housing projects in districts 3 and 7 in HCM City this month. The project in District 3 will be a 15-story building with 88 serviced apartments. The nine-story building in District 7 will have 180 apartments.. The nine-story building in District 7 will have 180 apartments."

Indochina to invest in a 4-star resort in Con Dao Island

2004-10-10T21:50:00.000-07:00

Indochina Capital Corporation will build a four-star resort in Con Dao Island. The project, with an investment of US$4.5 million, will have 60 rooms and some facilities. It is expected to open in 2006. Meanwhile, Saigontourist plans to expand its resort in Con Dao, investing VND50 billion in building 100 more rooms. The existing resort has 100 rooms.

Hai Van Pass Tunnel In Central Vietnam To Begin Trial In May, 2005

2004-10-09T16:37:00.000-07:00

New Tunnel In Central Vietnam To Begin Trial Ops In May, 2005

Okaya Vietnam Co's New Manufacturing Plant Starts Operation

2004-10-09T16:27:00.000-07:00

SUMMARY:

New Plant Location: Tan Thuan Export Processing Zone
Product: gearbox for automobiles and optical components
Market: Vietnam (Nidec Tosok Group in Dong Nai Province; Harada Co. in Dong Nai Province); Japan (Juki, Sony, Hitachi, NEC)

[main article Oct. 8, 2004]

HANOI, Oct 8 Asia Pulse - The Japanese-invested Okaya Vietnam Co has brought a US$2.6 million factory into operation in Ho Chi Min (HCM) City's Tan Thuan Export Processing Zone.
The new facility, which brings Okaya Co's total investment to US$4.1 million, specialises in manufacturing gearbox components for automobiles and optical components.

Okaya Vietnam supplies its products to the Japanese Nidec Tosok group and Harada Company's factories in Dong Nai Province, and for export to Japanese companies Juki, Sony, Hitachi and Nec.

Director of Okaya Vietnam, Jorge Koki Kawata, said: "We decided to invest in this facility in Vietnam because of the market we have established for our products here."

He said that Okaya would add US$2 million to expand the factory in 2006 and raise the company's staff from the present 90 employees to 500.

The factory is the Okaya's first overseas investment project. The company has three factories in Japan.

Okaya was the fifth overseas company invited by Nidec Tosok to operate as a satellite production line for the company in Vietnam.

According to figures from HCM City's EPZs and IPs Authority, Nidec Tosok has so far invested US$90 million in Vietnam while the total investment in its five satellite companies amounts to US$10 million.

San Miguel Plans To Invest US$100 million n Vietnam

2004-10-09T16:07:00.000-07:00

SUMMARY:

- Where: Saigon (Ho Chi Minh City)
- Amount: US$100 million;
- Products: non-alcohol beverage: water, juice, energy drink, coffee, tea and milk.

[mian article - Oct 8 2004 from Yahoo Asia Pulse]
HANOI, Oct 8 Asia Pulse - Philippine beverage firm San Miguel Corporation (SMC) plans to invest US$100 million to build a new brewery in Southern Vietnam as part of its regional expansion plan that could also help boost the Philippine economy.

The company's plan was presented to Filipino reporters by SMC President Ramon Ang at the sideline of the ongoing 5th Asia-Europe Meeting (ASEM) held here.

Ang said the firm will invest around $700 million (P39.2 billion) over the next five years outside the Philippines in viable markets like Thailand, China, Vietnam, Indonesia, Malaysia, Autralia and Taiwan.

"In Ho Chi Minh (formerly Saigon), a fast growing city in Southern China, we intend to build a new plant at a cost of $100 million for our non-alcohol beverage like water, juice, energy drink, coffee, tea and milk," he said.

The amount is on top of the $150-million investments of the SMC in Vietnam for the last 10 years, he noted.

Ang said the huge investments of SMC in the region have been helping the Philippine economy.

"Seventy per cent of our investments go the Philippines while the remaining 30 per cent go to other countries in the region. Our earnings from our investments abroad are reinvested in the Philippines which generate more taxes for the government," he said.

Ang said the Philippine government is expected to collect at least P20 billion in value-added taxes (VAT) from the company,s projected P200 billion sales revenue this year. The amount does not include taxes on its beer and hard liquor products and on importation of raw materials.

Aside from tax revenue, SMC is also helping the government in its job generation efforts as it employs Filipinos for top positions in its businesses abroad, he noted.

Ang is among the members the Philippine business delegation here with President Gloria Macapagal-Arroyo in the ongoing ASEM Leaders, Summit here.

The delegation participates in the 9th Asia-Europe Business Forum (AEBF) IX, an annual gathering of business leaders in Asia and Europe at the sideline of the summit.

The Forum is expected to report today its output to ASEM summit which outlines feasible measures to further intensify cooperation in trade, finance and investments.

Trade Secretary Cesar Purisima, who leads a 12-member Philippine business delegation, noted that the Philippines together with other countries, is interested in strengthening the AEBF as an institution to ensure greater continuity of membership and initiatives.

"Our delegation is quite an interesting mix. We have representatives from the SME (small and medium enterprises) sector, consulting, infrastructure, ICT (information communications technology), food processing, tourism and education," the trade chief noted.

Parallel to the ASEM, the Philippines, through the Department of Trade and Industry, is also participating in the ASEAN Trade Fair hosted this year by Vietnam.

The Philippine pavilion features Philippine brands which have become market leaders in Vietnam.

EU trade commissioner says WTO negotiations still ongoing with Vietnam

2004-10-09T16:02:00.000-07:00

SUMMARY:

- Vietnam targets the entry into WTO by 2005.

- Vietnam needs: approval from all 147 current members: which means Vietnam must first get approval from EU's 25 member, US and Japan.

- Key current issues in negotation with EU: granting access by Vietnam to telecommunications, tourism, and financial services.

- Trade with EU: US$6.8 billion, which represnet 22% of Vietnam's total trade

- Why 2005 target is crucial to Vietnam: textile and garment quotas no longer in place for other countries including China.

[main article from AP Oct 8 2004]
Vietnam and the European Union are getting closer to wrapping up negotiations over the communist country's bid to join the World Trade Organization, but some sticking points still remain, a top EU trade official said Friday.

Vietnam wants to become a member of the global trading body by next year, but it must receive approval from all 147 current members. Getting the 25-member EU's nod would clear a major hurdle.

"Our teams have worked hard and made good progress over the last couple of days, notably on goods, but there are still a number of basic disagreements on the degree of market access Vietnam is prepared to grant," EU Trade Commissioner Pascal Lamy said during a business luncheon in Hanoi on the sidelines of the biennial Asia-Europe Meeting, or ASEM.

The main outstanding issues include telecommunications, tourism, and financial services, he said.

Prior to a meeting with Lamy on Friday, Vietnamese Deputy Prime Minister Vu Khoan said the talks were progressing, but he would not speculate on whether an agreement would be reached before the end of the summit on Saturday.

"We have agreement on many items," he said. "But there are some items which require further discussion. I hope to achieve agreement anytime, but this process depends not only on myself but also on my colleagues."

Vietnam and the EU have already undergone nine rounds of WTO negotiations.

Two-way trade between the EU and Vietnam totaled US$6.8 billion last year, making up a total of 22 percent of Vietnam's total trade.

Vietnam still needs to get approval from two other heavy hitters in the WTO: the United States and Japan.

Gaining entry in 2005 is crucial to Vietnam as the quota system for textiles and garments will be dropped by the end of next year for members of the global trading body.

Vietnam's textile and garment industry _ the country's second largest source of exports _ is subject to quotas until it joins the trade body, and Vietnamese leaders are fearful they will not be able to compete with China and other Asian WTO members.

Lamy also said Vietnam's drive to join the WTO would also help its economic reforms.

Working to join "the WTO creates peer pressure and gives a certain added political energy to the domestic national engine pushing for reform," he said.

Vietnam began moving toward a market economy in the mid-1980s. Since then, the country has implemented many reforms, but widespread corruption and other problems still exist.

Real Estate Professional in short supply

2004-10-08T22:11:00.000-07:00

Demand for trained real estate professionals in Ho Chi Minh City has outstripped supply, according to property developers.

Real estate companies said they were also worried about the lack of qualifications in the pool of existing practitioners.
Developers fear the shortage of trained personnel places the emerging real estate industry at risk, as the success of property transactions involves a wide range of issues relating to laws, government policies, management, and human relationships.
An executive from Century 21 – a real estate brokerage firm owned by an American Viet Kieu – said: “A lack of qualified practitioners always gives us headaches and this is also a key factor in why we have developed our real estate network so slowly over the past months.”
Only 10 per cent of candidates who applied to be real estate brokers at Century 21, he said, were trained.
“We don’t know where to seek qualified staff in order to develop our business in future,” he said.
Like Century 21, many other property developers in Ho Chi Minh City said a lack of qualified staff had hindered their business development. Training courses, even though short-term, should be held to redeem the problem, they said.
In response to property developers’ request, the Economic Development Research Institute and the city’s Economics College recently developed a short real estate course – the first agencies to provide formal training to real estate staff in the south – in order to help practitioners better understand their role.
The six-month graduate course includes subjects such as business management, property trends, strengths and pitfalls of an emerging market and government regulations on real estate transactions.
Aside from classroom teaching, trainees take trips, write reports on extracurricular activities, and learn from the experiences of some of the country’s most successful developers.
Economy Development Research Institute’s Training and Consultancy Board head Pham Xuan Lan said many real estate companies had asked the board to supply them with personnel, following the completion of four training courses.
Lan said many of the course’s 600 graduates had been employed by real estate firms, with most students originally coming from State agencies and property-related offices.
Course graduate Pham Thi Lien Phuong said: “Our eight-member group has pooled our financial resources to establish the Dai Loi real estate trading company.
“In my opinion, trained real estate staff will always be in short supply, because this market is just developing.”
She said a successful practitioner needed strong networking and communication skills, professional knowledge and experience, and the ability to hold down a job despite frustrations.
Course director Nguyen Van Thuong said the city would also pursue professional accreditation.
“The Land Administration Department is working on awarding real-estate professionals with certificates to put an end to the chaotic market practices which are currently harming our national economy,” he said.

Vietnam Investment Review

Manor takes shape

2004-10-08T22:09:00.000-07:00

PRIVATE company Bitexco has began construction of the Manor Saigon, reportedly the biggest and most luxurious Vietnamese-built apartment, hotel and office complex in Ho Chi Minh City.

The complex will have two 426-apartment blocks in the first phase and will then be extended to include a 30-storey hotel and office buildings.
The apartments, which overlooks the Saigon River, will be sold to affluent Vietnamese and Viet Kieu and leased to foreigners.
The company last week completed a housing gallery with samples of two-, three- and four-bedroom apartments for interested buyers to visit before making a final decision. Bitexco director Moon Kyoo Kim indicated the price of these apartments would be almost triple that of other housing complexes.
“A lot of potential buyers have shown their interest to own an apartment here,” he said however.
“Design and construction would be carried by an international team from the US, South Korea and the Philippines,” he said.
The apartment complex has found the first buyers, two of whom are famous architect Ho Thieu Tri and Do Thi Hai Yen who featured Phuong in the film “Quiet American.” It is one of the biggest of its kind under construction near Ho Chi Minh City’s downtown area.
Most other residential complexes like Phu My Hung are in the suburban districts.

Keppel's Tamarind Park Project Still pending

2004-10-08T22:07:00.000-07:00

DEFENCE officials have rejected a bid by Singapore’s Keppel Land to restructure its $44-million housing project in Ho Chi Minh City.Keppel wanted to turn its Tamarind Park project from an apartment complex for lease, into an apartment block for sale.

But the defence ministry that oversees Keppel’s local partner the Army Garment Import-Export Company (Agtex), has given the thumbs down to the proposal, a senior Agtex executive said last week.
“Two years have already passed since the 2001 deadline given for construction on the project site to commence. Therefore, the Ministry of Defence might soon recommend the Ministry of Planning and Investment dissolve this project,” the executive told Vietnam Investment Review.
Agtex contributes 40 per cent of the project’s investment capital through land-use rights; Keppel provides the rest.
Keppel Land said it would start development before the end of 2002 but building never got underway.
A Keppel representative said last year the company would not quit the project under any circumstances, backed by promising forecasts for apartment sales in the second city.
Construction on the Tamarind Park apartment block, located on Thai Van Lung, in District 1 began in late 1996. At that time, developers said the building, named after the tamarind trees which line many of the city’s streets, would be completed in two years.
However, the 1997 Asian financial crisis put a stop to construction.
According to the initial design, the 20-storey apartment building will have 173 one-, two- and three-bedroom units, a three-level car park, swimming pool and other recreational facilities.
In 1996, the original foreign partner, FITI of Hong Kong, withdrew from the project because of financial problems and Keppel Land bought its stake in the venture.
For its $31-million Saigon Riviera residential project, also in the second city, Keppel Land is seeking government permission to form a partnership with a new domestic investor.
The government early this year disallowed Keppel Land’s application to establish a joint venture with local firm Huy Hoang joint stock company for Saigon Riviera.
The 5.9ha Saigon Riviera, which involves development of apartments and villas for lease and sale, is to be in An Phu ward, District 2, right opposite the $130-million sport and commercial complex project of Hong Kong’s Chiap Hua, licensed in May this year.
Keppel Land has six licensed projects in Vietnam including the International Centre, an office building, and Sedona Suites service apartment buildings both in Hanoi, Saigon Centre, an office service apartment unit, and Tamarind Park in Ho Chi Minh City.
The property giant has pumped more than $200 million into its properties in Vietnam, becoming one of the country’s biggest foreign property investors.

Vietnam Investment Review

Bitexco plays big in real estate projects

2004-10-08T21:51:00.000-07:00

VITAL mineral water producer Bitexco is to build a high-end housing complex in Hanoi to capitalise on the growing demand for upmarket residences in a market dominated by several large foreign investors.

The housing compound will be developed on 37 hectares next to the SEA Games 22 venue National Sports Complex, just a few kilometres from the city centre.
Bitexco president Vu Quang Hoi said the company decided to move into the upmarket property market as demand was growing very fast and there were not any complexes of this kind in Hanoi.
“Our project will be self-inclusive and luxurious and different from other locally-invested housing projects in the capital city. In fact, other housing projects have not paid attention to the art of living but have only tried to meet increasing demand,” Hoi said.
The high returns from housing investments – more than investments in hotels, office buildings and even the securities sector – are drawing more and more investors into the real estate markets of Hanoi and Ho Chi Minh City.
New projects are springing up in Hanoi, and housing complexes such as Linh Dam, Dinh Cong, Thang Long and Vinaconex have been completed.
However, Hoi said, these projects were of a lower grade than several other foreign projects that were still in the pipeline or under construction.
The Citra West lake Development company is building a $2.1-billion housing project overlooking the capital’s famous West Lake.
The project was licensed in 1997 but only a few high-rise buildings are currently under construction.
Hong Kong property developer Tungshing Group, the owners of the FTS Tungshing office building, is planning a $40-million housing complex in Thuy Khue street.
“We understand that there are a lot of other housing projects under construction in Hanoi. However, I believe there exists plenty of opportunities for other investors to step in. We will try to complete our properties before others so that we can go ahead with more projects,” Hoi said.
“We hope to sell all the apartments within just a few months.”
Bitexco is based in Thai Binh province and specialises in garments, textiles and mineral water. It is developing the French-colonial style ‘The Manor’ housing complex and a new office building in Ho Chi Minh City.
More than 60 per cent of the apartments in the Manor project have been sold so far although construction will be finished in 2005 and prices are more than double compared to other housing projects in the second city.
The Bitexco office building is the only property to open in the city’s downtown area this year.
Bitexco’s future ventures include the Nhon Trach commercial and residential project in Dong Nai province, An Khanh town residential development in Ha Tay province and a project in Saigon South.

Vietnam Investment Review

Land Law Changes Favor Investors

2004-10-08T21:38:00.000-07:00

The latest amendments to the Land Law will be of benefit to business, a senior government official has said.

Deputy Natural Resources and Environment Minister Dang Hung Vo told Vietnam Investment Review the amended law’s new price system, dispute settlement mechanism and decentralised land allocation powers would ease business concerns.
“The amended land law is much more appealing to investors,” Vo said.
He said the amended law, passed last week by the National Assembly, set deadlines for local authorities to resolve problems for land users and businesses, which was an improvement on the current lengthy procedures.
“The government policy is justified but it can take businesses a long time to negotiate with the local authorities. The deadlines will do away with bureaucracy,” Vo said.
Article 41 of the amended law allows state organisations to oversee site clearance and land management.
The deputy chairman of the National Assembly, Truong Quang Duoc, said this model had been successful in China and had been piloted in a number of Vietnamese cities.
Foreign investors have found site clearance to be a costly, time-consuming process that can cause delays to their construction projects.
The amendments give provincial people’s committees the power to set land prices close to the market value, breaking with the previous dual-pricing system in which prices were set by the government and the market.
Assembly delegates have called the current pricing system unrealistic, as it does not reflect the land’s market value. However, they have pointed out that market prices were sometimes absurdly high due to speculation.
Duoc said land prices would be adjusted when there was a big difference between government and market prices. The question of defining market land prices was a technical issue that the government would answer later.
He said the provincial people’s committees would have to consult with the people’s councils before issuing their final price decisions, because it was an important issue.
The amended law also allows the management boards of economic and high-tech zones to lease land directly to Viet Kieu and foreign investors, even though some deputies asked that this decentralisation be reconsidered.
Duoc said the mechanism aimed to encourage investment by streamlining.
“This is a special mechanism for the management boards of economic and high-tech zones,” he said.
Another point that was hotly debated at the National Assembly was the question of resolving land disputes.
The amendments allow land users to take their land disputes to court, but court officials have warned they will be overloaded because of the frequency of land-use conflicts in Vietnam.
The deputy chairman said there would be two methods for the settlement of land-related disputes, to clarify the jurisdictions of people’s courts and state administrative agencies.
The amended law states the courts are responsible for handling land and land-related asset disputes when the concerned parties have land-use-right certificates.
Disputes that do not have certificates will initially be handled by the district people’s committee chairman, but the parties can then appeal to the provincial people’s committee chairman.
If the parties do not agree with the provincial chairman, the Minister of Natural Resources and the Environment has final say. Appeals against administrative decisions regarding land management can be settled by the court or the provincial people’s committee chairman.
Deputy minister Vo said although the amendments did not allow Vietnamese individuals or organisations to lease land to foreign investors, the government would pilot this mechanism through a separate decree.

Vietnam Investment Review

Hong Kong-based Swiss-Bellhotel Int'l to manage Vinpearl Resorts and Spa

2004-10-08T21:32:00.000-07:00

Vietnam Investment Review - Timeout: "e"

Ocean Park Office Building Complex to Hit Hanoi

2004-10-08T21:30:00.000-07:00

THE largest building in recent years is set to go on Hanoi’s office lease market along with a number of smaller properties, all of them developed by local investors.

The $18-million Ocean Park building, at the intersection of Giai Phong and Dai Co Viet Street, will open in May with floor area of 35,000 square metres.
Another building, the Artexport, will open its doors in the next few weeks at 31-33 Ngo Quyen street.
Ocean Park was started by Vietnam Shipping Lines in 1997 amid the regional economic downturn that drove away various foreign property developers in Vietnam. The company was however determined to proceed with the project, the biggest office building by a Vietnamese company in the capital.
In the past, most commercial properties in the city were built by foreign investors or joint ventures.
Nguyen Hong Minh, director of the Hanoi Property Management Company, Ocean Park’s project manager, says the building’s facilities will meet Grade A standards while its staff have been trained for more than one year to serve customers.
It would benefit from the scant supply of large office buildings in the city, Minh says.
Demand is expected to grow as more foreign-invested projects are returning to Vietnam and companies in Ho Chi Minh City are planning to open representative offices in Hanoi.
Foreign companies are finding it difficult to find large floor space as most upmarket buildings in Hanoi have high occupancy rates while Ever Fortune Plaza, a Taiwanese-built office block in Ly Thuong Kiet Street, with 35,000sqm, is still in the foundation stage.
“Several multinational companies have already signed up to lease space in our building,” Minh says.
Market research by Hanoi Property Management showed that by the end of 2003, most of the 20 major buildings in Hanoi had occupancy rates of more than 90 per cent.
Many Grade C buildings have been 100 per cent occupied for a long time.
Artexport in Ngo Quyen street with Grade A facilities has drawn strong interest from tenants due to its prime location near Hoan Kiem Lake.
Though it is yet to open, only its eighth and ninth floors are still vacant. Public rental rates are about $23 a square metre.
Hanoi Property Management research also revealed strong demand for Grade C office space due to attractive rental rates and expansion plans by local companies.
Average rental rates for Grade C are between $9 to $13 a square metre compared to $15 to $17 for Grade B and $19 to $21 for Grade A.

Local publicly traded companies lured to follow the property boom

2004-10-08T21:26:00.000-07:00

LISTED companies are increasingly diversifying into property development in Ho Chi Minh City to tap a burgeoning demand for accommodation and office space.

Faced with difficulties in mobilising capital from investors, nine of the 23 companies listed on the Vietnamese bourse have diverted resources from their core operations into property projects.
The Khanh Hoi Import-Export Company (Khahomex), for instance, is shifting its investment from garment and bag making to property projects.
One of them is a 330-apartment building in District 4’s Ben Van Don Street.
Khahomex chairman and CEO Le Van Truong said his firm had invested nearly VND100 billion ($6.4 million) in the 7,700 square metre Khanh Hoi apartment building project, scheduled for completion in December this year.
The company plans to build two more high-rise office buildings next year, one of them on a 5,000sqm site adjacent to the apartment building and the other on a 3,000sqm site in Ben Chuong Duong Street, near the planned East-West Highway.
Another company in diversification mode is the marine transport company Gemadept, one of the stars of the local bourse. It has chalked out plans for a 25,000sqm office building on Le Thanh Ton Street in District 1.
The building is designed to have 25 storeys, including three below ground level, for office and private lease. Construction on the $18 million project is expected to start in the second quarter of this year and be completed by 2006.
Other firms with realty ambitions include REE, Savimex, Gilimex, and Sacom, which despite having to learn on the job are hoping to make large profits on the investments.
“The demand for accommodation and office space is increasing significantly, so we believe our investments will return profits,” Truong said.
All 330 apartments, to be built from the second floor upwards in the Khanh Hoi project, have already been taken by company staff and shareholders although construction has yet to be completed.
“The project is expected to fetch a net profit of at least VND10 billion ($640,000),” he said.
REE, or Refrigeration and Electrical Engineering Corporation, also has high hopes for its e-Town project in Tan Binh District, an office building earmarked for IT tenants.
The 12-storey building has already leased out 70 per cent of its 30,000sqm to nearly 100 foreign and Vietnamese companies. The company aims to lease 80 per cent of space by June this year.
“We are marketing both at home and abroad to realise the target,” REE chairwoman and CEO Nguyen Thi Mai Thanh said.
Following the success of e.Town, REE plans to team up with a local partner to develop another building in District 4 this year.
The 18-storey building is to include two underground levels for parking, a trading centre and 161 apartments for sale. Total investment is estimated at $9.2 million.
In addition, REE has developed three other property projects, the Maison and IDC buildings in District 1, and Ly Thai To in Hanoi. The two former projects have a 100 per cent occupancy rate, and the latter has passed 85 per cent.
According to real estate consultants, the property market in Ho Chi Minh City will see relentless growth in occupancy rates and rentals.
“There is limited supply of serviced apartments. A lack of supply will allow landlords to raise rates,” a consultant said, adding that some IT-related companies may move to REE e-Town from locations in the city centre.

Vietnam Investment Review 10/4/2004

Vincom City Tower - Hanoi bankrolled

2004-10-08T21:10:00.000-07:00

Five local commercial banks have agreed to bankroll part of a $32.9 million twin tower in Hanoi, to be developed by Vietnam General Commercial Joint Stock Company (Vincom).

The six-year, $10-million syndicated loan is to be granted by the Military Commercial Bank, Vietcombank, the Hanoi Bank for Housing Development (Habubank), the Marine Commercial Bank and the North Asia Bank.
Vincom general director Kieu Ha told Vietnam Investment Review last week that Vincom had signed memorandums of understanding with the banks.
She declined to reveal further details of the loan, but said it would help finance the ongoing construction of the project, otherwise known as Vincom City Tower.
Construction on the 22-storey project at 191 Ba Trieu Street in Hanoi, started in mid-2002 and is expected to be completed by November this year.
The new landmark development covers approximately 82,000 square metres.
It will have 28,700sqm of prime retail space on the first six levels, two 15 storey office towers of 43,500sqm and two basement levels of 10,000sqm.
Ha said she believed the project’s distinctive design and strategic location would attract both office tenants and new retailers to the capital’s busy Hai Ba Trung district.
The US-backed CB Richard Ellis (Vietnam) (CBRE) has been chosen as the sole leasing agent and property manager for the project.
CBRE managing director Marc Townsend said that with most prime office buildings in Hanoi having occupancy of more than 90 per cent, Vincom City Tower would give discerning tenants an opportunity to lease large spaces at an attractive price.
Vincom City Tower is CBRE’s second and largest property management project in Hanoi. CBRE is currently managing the Metropole Centre.
Vincom, founded by Vietnamese businesspeople residing in the Ukraine, and specialising in property development and general trading, recently opened a 500-room hotel, Vinpearl Resort and Spa on Hon Tre Island in Nha Trang.

Vietnam Investment Review 10/4/2004

Hung Vuong Plaza in District 5 under way

2004-10-08T19:50:00.000-07:00

The two-tower Hung Vuong Plaza will be built in the heart of the city’s Chinatown. Each tower will have 29 storeys, with 276 luxury apartments for sale on the eighth to 29th floor.
The three-bedroom, three-bathroom apartments will cover 117 to 128 square metres and have been designed to international standards.
When it is finished in early 2006, the complex will have a swimming pool, a playground, day care facilities and a gym.
More than 40,000sqm have been set aside for retail and entertainment facilities.
Kinh Do department store will occupy the first seven floors of the plaza, which will have luxury shops, offices, 20 restaurants and cafes, and five cinemas with a combined 1,500 seats.
The director of real estate company Chesterton Petty Vietnam, in charge of managing and marketing the project, said the Kinh Do department store was “a shopping paradise”.
“With so much on offer, the public will come from all over the city just to shop and have fun,” Brett Ashton said.
“Our goal is to create a fun and exciting environment for the whole family to enjoy. There is something for everyone at Kinh Do department store,” he said.
The department store has so far attracted 10 tenants, including Phu Nhuan Jewellery Company (PNJ), Thai Tuan Textile Company, Viet Fashion, Triumph International Vietnam and Phuong Nam Cultural Products company.
Some 20 per cent of the department store’s area is expected to be occupied one month before the opening date.
Designed by Hong Kong-based Chesterton Petty Design Partners Company, the Hung Vuong Plaza is being developed by four Vietnamese companies: Saigon 5 Trading and Construction Company, M&C Joint Stock Company, Kinh Do Corporation and Lam Phan.
The Eastern Asia Commercial Bank (EAB) has signed agreements with investors to provide loans to tenants in the Kinh Do department store.
Tenants can borrow up to 50 per cent of the cost over 10 years at an interest rate equal to their 12-month deposit rate plus 0.25 per cent monthly by Vietnamese dong, and at a fixed rate of 6 per cent per year by gold.
EAB general director Tran Phuong Binh said his bank would consider providing loans to apartment buyers for periods of up to 15 years.

Vietnam Investment Review 10/4/2004

State pledges to address investor land concerns

2004-10-08T19:40:00.000-07:00

The government plans to set a timetable to address foreign investor’s concerns about leasing land from individuals, negotiating mortgages at foreign credit agencies and balancing rights between foreign and local investors in land leasing, a senior government official has said.

Deputy Minister of Natural Resources and Environment Dang Hung Vo said although these issues had not been mentioned in the newly amended Land Law, which takes effect on July 1, the government was paying attention to their concerns and would work out measures to address them.
However, when these solutions would be carried out remained unclear as these were complicated issue requiring time to resolve, Vo said.
Initially any new mechanisms are expected to be applied only on a pilot basis.
Foreign investors have said the procedures in the newly amended Land Law are more transparent since they provide specific steps in land transaction.
However, they remained concerned about three problems that form the basis of long standing demands.
Investors have suggested they be allowed to lease land for non-state users.
They say the State at present does not have a big land reserve and foreign investors first have to pay current land users to vacate the property before they lease it from the state.
This means investors have to pay twice for land, making investment in Vietnam more expensive.
This problem would be removed if foreign investors could directly lease land from non-state users as they would not have to pay compensation.
Vo said the government was considering this proposal.
As an example he cited a case in which a joint venture turns into a 100 per cent foreign-owned company.
In these circumstances, the investor might be allowed to continue the lease with the existing land use rights owners.
In terms of new lease contracts, Vo also affirmed that the government would facilitate individuals and households to lease land to foreign investors.
This is because the mechanism would benefit these owners for the fact that they can lease at higher price.
“We agree that this is a good method,” said Vo.
He added that the government had asked the ministry to implement the proposal from local authorities on a trial basis before submitting it to the National Assembly Standing Committee for approval.
Foreign investors have also asked that land users in Vietnam be allowed to mortgage their land use rights at foreign-based credit agencies.
They claim this mortgage is vital to large-scale projects in order to secure loans that domestic credit agencies are not able to provide.
In response, Vo said the government had asked the State Bank and the Ministry of Natural Resources and Environment to work out a plan to address this issue.
Though such a plan has not been finalised, Vo reiterated that the mechanism would be tested on a trial basis.
The vice minister said this mortgage was likely to be first applied in open economic zones such as Chu Lai in Quang Nam province since this kind of zone, where land is owned by the Vietnamese state.
Vo also said that there was no difference in the rights and obligations of land users between the two mechanisms.
The state allocates local users land and collects land use fees and the state leases land to foreign users for a certain period and collects rental.
The minister said land users under both mechanisms had full rights and obligations in land use rights transfer, mortgage and sub-leasing.
The only difference was that foreigners were not allowed to receive land use right transfers, an issue that Vo described as a shortcoming in the real estate market.
Vo said the ministry would consider the problem while taking into account the development of the property market before it submits a proposal to the government and the National Assembly for approval.

Vietnam Investment Review 10/4/2004

Leasing plan stirs investors’ interest

2004-10-08T19:39:00.000-07:00

Ever Fortune has become the first foreign developer in Hanoi to adopt a lease-right sales approach that would allow sub-investors to earn profits at one of its new properties.

The Taiwanese company is currently developing the $30 million Pacific Place, an office, apartment and retail block for lease on Ly Thuong Kiet street, in the capital’s Hoan Kiem district. Construction is expected to be completed in late 2006.
Instead of directly leasing to tenants and collecting monthly rental, Ever Fortune is selling long-term lease rights to individuals, both foreigners and Vietnamese, who can then act as sub-investors by leasing units at higher rental.
This approach would help the company quickly recover investment capital while sub-investors, who find few opportunities in this saturated downtown area, can join the development and earn profits from sub-leasing units.
Leasing rights for residential units at Pacific Place are being sold for $1,800 to $2,200 per square metre, for up to 40 years or the lifespan of the building. Office space will be rented at $23 to $25 a month, and sub-investors can enter three- to five-year agreements.
Under Ever Fortune’s calculations, a sub-investor who buys a two-bedroom apartment in Pacific Place can earn an annual return of 20 per cent compared to 4.8 per cent of bank interest rate if the unit is leased at $2,200 a month.
But company general director Shu Hsin Hung said buyers could earn even greater returns since the actual monthly rental for such a unit in this prime location was higher than the rate the company had fixed.
Sub-investors can also earn profits from buying long-term lease rights for the project’s office and retail space.
“Both the developer and the investor enjoy a fruitful profit based on a very strong tenant market and can have a high expectation of the upward market’s increment,” Shu said.
He added that this approach has been internationally popular and it will be especially more known in a capital of an 80-million population country. Through the practical reaction from the market, local but international-minded investors really know how to grasp the rare opportunity that they has never had before.
Shu said for the past decades, this concept has been developed in various capitals all over the world and obviously, professional and international-minded investors have made huge profits from their investments.
This method was recently employed by the Phu My Hung Corporation in Ho Chi Minh City, where the Khaisilk Corporation bought apartments and villas from the corporation to lease to expatriates.
The Pacific Place would offer 191 luxury residential units of varying sizes. For a couple or family, one-, two- and three-bedroom apartments, with floor areas ranging from 77 to 200sqm, would be available. A 46-sqm studio would meet the needs of business travellers who frequent Hanoi but prefer not to stay in a hotel.
Pacific Place would also provide a convenient community for expatriates, with its modern luxurious facilities including a swimming pool, babysitting services, fully-equipped gynasium, restaurants, boutique outlets and massage and beauty parlours.
An office area with 18,000sqm of rental space would stand alongside the apartment block, offering 1,200sqm per floor for clients in need of large office spaces.
The building would offer a solution to parking to Hanoi’s congested downtown area with plots reserved for up to 400 cars. These will be sold for long-term lease rights.
The Pacific Place project was originally licensed in 1994 as a five-star hotel to a joint venture between Ever Fortune Industrial of Taiwan and two Vietnamese companies. It was delayed for various reasons until the foreign company bought out the local partners a few years ago.

Rising incomes fuel demand for luxury

2004-10-08T19:32:00.000-07:00

Customers are surprised when looking at colourful crosses and squares on the list of apartments for sale given by the sales departments of Officetel or Apartment Projects.

All the apartments in An Khanh Building in District 2, on Tran Nao, Luong Dinh Cua streets, and No.25 Interprovincial Road and Hanoi Highway, have been sold, even at VND12 million ($764) per square metre.
There is no shortage of competition. Twenty people competed with each other to buy one apartment at An Khanh.
In May the Phong Lan Company, opened a luxury apartment building for lease in District 1.
Ben Thanh Tourism Service Company and AA Land Realty Shareholding Company spent VND17 billion ($1.08 million) to develop the seven-storey building, which has 22 luxurious apartments, each 52 to 105 sqm. The monthly rent on the 10 year leases is $1,500-$2,000.
Vo Ba Son, deputy director of Phong Lan Company, said his company expected to recoup its investment capital after seven years operation and would soon begin work on apartment projects at 172-174 Ky Kon Street, 32-34 Ngo Duc Ke Street and 5 Me Linh Square, all in District 1.
Another success story is the Hung Vuong Plaza in District 5. According to an executive from Kinh Do Corporation, one of the four partners in the project, nearly all 276 apartments have been registered only two months after work on the 29-storey project started.
The three-bedroom, three-bathroom apartments will cover 117 to 128 sqm. When finished in early 2006, the complex will have a swimming pool, a playground, daycare facilities and a gym.
What’s more, 40,000 sqm have been set aside for retail and resident entertainment facilities.

Why serviced apartments?
The apartment complexes cater to well-off people, including Viet Kieu (overseas Vietnamese) and members of the expatriate community, who now prefer buying luxurious apartments instead of houses because of the services provided.
Most serviced apartments were developed before the Asian economic crisis in 1997. Some projects were combined with office and retail developments. The developers or joint venture partners of these projects were investors from Hong Kong, Singapore, Japan and South Korea. International property management groups such as Ascott, Peninsula, Sheraton and Sedona are managing some of these projects while others have in-house management.
Deluxe apartment buildings provide utilities typical of hotels, like swimming pools, fitness centres, restaurants, tennis courts, around-the-clock security, and several even have creches, child pickup and housework services. Most tenants of serviced apartments are expatriates from multinational companies with the same nationality as the investors or developers.
According to property consultant CB Richard Ellis Vietnam (CBRE), there is a strong and growing demand for high-class residential apartments in Ho Chi Minh City, particularly those located in the central business districts (CBD). Most residential apartments are easily sold as the market demand is very high and developers can have a quicker payback period.
Many medium-class residential apartment buildings were constructed in Ho Chi Minh City. Most of them were located in Saigon South and Thu Duc and were quickly sold out to middle class families with the average sale price of $400 to $600 per sqm.
CBRE experts said the demand driving factors for the serviced apartment market include a strong demand from emerging upper class and the rental market for expatriates as well as increasing demand for high-class residential apartment of international standard and good management.
A vital trend that the prevalence of households earning over $5,000 per month is increasing dramatically, CBRE said.

High demand but
short supply
Both real-estate operators and consultants believe demands for luxury apartments among domestic and foreign companies will remain high for two or three years as the city is in short supply of high-quality apartments while more multinationals are coming to the city.
“More and more people, local and foreign alike, prefer moving into convenient apartments. What’s more, a growing expatriate community and higher living standards demanded by local residents have triggered a flurry of building activity in city’s luxury apartment market.
“If the trend continues, the city is likely to face a shortage of apartment accommodation for foreigners and local businesses over the next few years, until new apartments are put into operation,” a consultant said.
According to CBRE, the serviced apartment supply would still be very limited for years to come. In the last few years, there were few new serviced apartment projects. Thus, the market demand was very high and the serviced apartment market continued to be good investment opportunity for developers.
Ho Chi Minh City is now home to 14 serviced apartment buildings (grade A and B) with total supply of 1,433 units. With no new supply added to the market, the average occupancy rate continued at a high level of 95 per cent (refer to the table below).
CBRE also predicts that Ho Chi Minh City is likely to face a shortage of high quality accommodation for foreigners over the next few years.
Because of this, some projects in the planning stage, which were put on hold, may be re-started in the near future.
Currently, there are two new high class residential projects, Indochina Park Tower (93 units) and Green Building (51 units), under construction in Districts 1 and 3, of which more than 60 per cent were sold out within two years at the average sales price from $700 to $1,000 per sqm.
Both projects are to be completed in the year 2004 with a floor space is from 500 sqm to 700 sqm.
Meanwhile, there are three residential projects in District 1 which are currently in the planning stage.
All the projects are planned to be completed in the year 2005 with a scheduled selling price of $990 to $2,000 per sqm.
Upon completion, they will provide 497 units to the market in year 2005.
Pasteur Court, the first high class residential project to be launched in Ho Chi Minh City, is located in District 3 and planned to be completed in Jun 2005 with 252 units.
Property experts noted that prices of these high-end apartments in the city could drop significantly from 2005 or 2006 as a number of property projects are now under construction and many serviced apartments will be for sale or lease at the same time.
Along with improved living standards of locals and a growing number of expatriates, the serviced apartment segment continued to be the jewel in the crown of the Ho Chi Minh City property market during the first half of this year. Despite expensive prices, luxurious apartments continued to attract buyers. Nguyen Hong reports.

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2004-10-08T19:17:00.000-07:00

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