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SG Vietnam real estate market thaws

Property Here - Thursday, July 18, 2013

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Vietnam's property market is starting to attract overseas investors once again, following a two-year freeze. While the market has not yet bottomed out, some investors believe that it will rebound soon.

For instance, EXS Capital announced on 16 July that it has spearheaded the formation of a US$37 million (S$46.7 million) pool from 50 high-net-worth individuals (HNWIs). The money, which could climb up to US$80 million (S$100.9 million) depending on demand, will fund upcoming projects of Son Kim Land, the property arm of retail-focused conglomerate Son Kim Group. 

“The market is starting to thaw,” said Son Kim Land Chief Executive Trinh Bao Quoc. In particular, the firm has six developments in the pipeline, including two mixed developments in the second district of Ho Chi Minh City, near its first subway line.

EXS Capital is not the only company bullish on Vietnam's property market. In May, private-equity giant Warburg Pincus led a consortium that is buying a US$200 million (S$252.2 million) stake in the retail property business of Vingroup, the country's biggest private real estate firm.

In April, Korean company Lotte acquired a luxury riverfront establishment known as Legend Hotel Saigon. The firm also plans to launch another hotel in Hanoi by 2014 and boost its five existing supermarkets in Vietnam to 35. Japanese retailer Aeon also intends to build a large mall in western Ho Chi Minh City in the same year.

However, Vietnam has the smallest volume of investable property in Asia at US$21 billion (S$26.5 billion), less than Philippines’ US$48 billion (S$60.5 billion) which is second-to-last, according to an APREA study. Nevertheless, that figure is expected to soar to US$65 billion (S$82 billion) in 2021 and US$171 billion (S$215.7 billion) by 2031.


Nikki De Guzman, Junior Reporter at PropertyGuru, wrote this story. To contact her about this or other stories email nikki@allproperty.com.sg