Masan opens beer brewery in Hau Giang province

Masan Group opened a beer brewery in the Mekong Delta province of Hau Giang on December 26.

The brewery cost a total of VND1.2 trillion (US$52.8 million) and has a capacity of 100 million litres a year in the first stage.

Speaking at the opening ceremony, Deputy Prime Minister Hoang Trung Hai said the Masan brewery in Hau Giang came into being from the policy to encourage the development of the food processing industry to serve domestic consumption.

The Deputy PM asked Masan Group to make a commitment to maintaining beer quality to protect consumers’ health. He also requested the brewery have all its wastewater processed before being discharged into the environment.

The Masan brewery in Hau Giang is expected to create around 1,500 jobs and contribute VND1.5 trillion (US$66 million) each year to the provincial budget.

Overseas Vietnamese investments important for development: official

Investments by overseas Vietnamese in Viet Nam play an important role in the development of the domestic economy, said Ministry of Industry and Trade official Duong Phuong Thao.

Thao made this announcement yesterday at a meeting held by the State Committee for Overseas Vietnamese (SCOV) under the Ministry of Foreign Affairs in Ha Noi.

According to Thao, overseas Vietnamese have invested in 52 out of 62 provinces and cities in Viet Nam. Also, they currently run about 3,600 businesses nationwide, with some 2,000 projects valued at a combined US$8.6 billion.

The projects concentrate in trading, tourism, construction and real estate fields, besides production of export goods, aquaculture and seafood processing. They bring in an average income of some $20 billion to the country annually.

Overseas Vietnamese enterprises and entrepreneurs have stakes in domestic banks, such as Techcombank and VPBank, and major property and tourism businesses, such as VinGroup and Sungroup.

They have also invested in large manufacturing companies, such as Eurowindow and Masan, as well as the waste processing firm Da Phuoc.

Vu Hong Nam, Deputy Minister of Foreign Affairs and Chairman of the SCOV, said the global business community of overseas Vietnamese, which comprised more than 10,000 businesses in 2012, has significantly helped Vietnamese goods penetrate different markets throughout the world.

The community has formed distribution networks with many shopping centres and trade association, while many Vietnamese entrepreneurs have established economic groups and bridged trade and investment among numerous countries.

However, Hoang Manh Hue, who chairs the union of Vietnamese business associations across Europe, said overseas Vietnamese still faced obstacles related to investment procedures in Viet Nam.

It has taken overseas Vietnamese three to four years to obtain investment licences, and six to seven years to have a clear site for building a factory, he added.

Nam said the SCOV will make greater efforts to assist overseas Vietnamese seeking to invest in enterprises and businessmen in Viet Nam.

Bui Dinh Dung, General Secretary of the Association of Overseas Vietnamese Entrepreneurs, said the overseas community and domestic enterprises should take advantage of connections in seeking partners and customers, as well as developing the brand names of Vietnamese goods.

Further, Nguyen Van Than, acting Chairman of the Viet Nam Association of Small and Medium-sized Enterprises, said the association will help foster cooperation between local and overseas businesses with investment and trade consultancies, as well as assistance in production, distribution and promotion phases.

Le Duy Thanh, Vice Chairman of the Vinh Phuc People's Committee, said he expected overseas Vietnamese to invest more in the northern Vinh Phuc Province, where the quality of human resources, administrative procedures and infrastructure had been improved to encourage investors.

Nguyen Gia Phuong, the director of the Ha Noi's investment promotion centre, said municipal authorities had also been working to create a more attractive investment environment for overseas Vietnamese investors.

He said the capital prioritises attracting investments in such areas as infrastructure, hi-tech industrial zones, support industries, biological technology, as well as new materials, healthcare and education between today and 2020.

It also calls for investments in trade centres, hi-tech agricultural zone, tourism, entertainment and ecological urban complexes.

Deputy Minister Nam said the laws on nationality, land, housing, investment, enterprises, customs and taxes have all been revised, offering better conditions for investment and business activities to overseas Vietnamese.

Monetary policy initiatives urged for macroeconomic stability

Deputy Prime Minister Vu Van Ninh has urged the State Bank of Vietnam (SBV) to develop flexible and effective monetary policy initiatives in combination with fiscal policy to ensure macroeconomic stability.

The deputy PM made the request during a conference in Hanoi on December 25 held by the SBV to sum up its implementation of monetary policies and banking operations in 2015, as well as mapping out orientation for the next year.

Speaking at the meeting, Deputy PM Ninh said that the country’s economic outcomes achieved in 2015 reflects the Party and State’s adjustment to economic development orientation during 2011-2015, from rapid growth and sustainability to macroeconomic stability, inflation control and growth model renovation from early 2011.

Accordingly, GDP growth for 2015 is likely to exceed the National Assembly’s set target, in addition to macroeconomic stability has been ensured and growth model restructuring has obtained initially important results.

The government official praised the SBV and the banking sector’s contributions to the outcomes, reflecting in fast and sizable reduction of interest rates, credit growth exceeding set plans, appropriate and stable exchange rate adjustment in line with market movements and interest rates, credit organisations restructuring reaching positive results, and bad debt handling surpassing set objectives.

Deputy PM Ninh said that there will be more conducive conditions for national development in the long-run, yet in the short-term, monetary policy and macro finance operations in 2016 will face a range of difficulties as of pressure on low inflation, the volatility of crude oil prices, and the pressure on enhancing domestic economic competitiveness.

He urged the banking sector to secure credit growth right from early 2016 to cater for business production activities and improve credit quality in priority areas, in addition to strengthening economic restructuring and growth model innovation, particularly technological innovation, and enhancing enterprises’ competitiveness.

It is necessary to strengthen strict control over loans for real estate and consolidate banking system safety after restructuring of credit institutions, particularly applying international standards in banking management, Deputy PM Ninh stressed.

He also suggested that the SBV responsively adjust exchange rate under market mechanism, while promoting administrative reform and gradually operating credit policy towards market signals.

Reports by the SBV at the conference showed that the banking sector has achieved several important achievements in performing the tasks assigned by the government over the year. Notably, the average interest rate was reduced about 0.2-0.5 percent per year, thereby actively supporting business production activities while ensuring stability of the currency and foreign exchange market.

Ca Mau sees 20 pct drop in seafood export

The southernmost province of Ca Mau to date has earned roughly one billion USD from exporting its aquatic products, dropping nearly 20 percent from last year.

The Ca Mau Seafood Processing Association (CASEP) earlier predicted that it would be difficult for the sector to match the record 1.3 billion USD of export turnover in 2014 because of the increasing international supply of shrimp this year.

“The export market for shrimp, the main product of Ca Mau, is seeing unpredictable changes, with many competitors,” CASEP Chairman Ngo Van Nga said, adding that trade obstacles such as anti-dumping and anti-subsidy lawsuits or unreasonable technical barriers are on the rise in major markets.

On the domestic playground, businesses also counter rising production cost, lack of capital and raw materials, he said.

Another problem for Ca Mau seafood sector was the rising violations of food safety standards. According to the provincial Department of Industry and Trade (DoIT), as of November 20, nearly 2,640 tonnes of seafood, worth roughly 23.41 million USD were returned home for quality reasons.

Ca Mau DoIT Director Le Van Su said the sector will strengthen its supervision and monitoring of all stages of seafood production to ensure food safety.

The locality will also focus on developing brand names for local shrimp in a bid to enter key markets, including Japan, the US, the European Union.

Most favourite Vietnamese brand names in 2015 announced

A ceremony to honour and award “The most favourite Vietnamese brand names in 2015” for 35 outstanding businesses in various fields took place on December 26 in Ho Chi Minh City.

The annual event was organised by the Sai Gon Giai Phong newspaper in response to the “Vietnamese people prioritise Vietnamese goods” campaign.

It aims to encourage businesses to build up prestigious, high-quality Vietnamese brand names and to build a consumption culture among Vietnamese people.

Over 1,000 readers and consumers participated in the programme to select the best businesses for the award.

According to the organising board, 23 brand names have won recognition for five to ten consecutive years such as Saigontourist, Co.opmart, New World hotel, Vietnam Airlines, and Big C.

Thanh Hoa seeks tourism link with neighbouring provinces

The central province of Thanh Hoa has made a noticeable move to bring its tourism sector to a new level by signing agreements with the neighbouring provinces of Ninh Binh and Nghe An.

The agreement is of strategic significance for sustainable development of the three provinces and unique inter-regional products, meeting the increasingly diversified demand of local and international tourists.

Nguyen Ngoc Thien, Deputy Minister of Culture, Sports and Tourism, said the cooperation between Thanh Hoa, Nghe An and Ninh Binh to develop tourism is a right path.

According to Thien, besides developing uniquely local products, three provinces should together develop destinations.

Ninh Binh, to the north of Thanh Hoa, is a popular destination for spiritual and ecological tours with the Trang An Landscape Complex, a UNESCO world heritage, while Nghe An has the biggest city of Vinh in the north central region.

Thanh Hoa’s tourism sector has been given a boost in 2015 after the completion of a high-end seaside resort in Sam Son, a coastal town well-known for tourists in the summer.

The province’s tourism data showed 5.5 million tourists, including 200,000 foreigners, visited Thanh Hoa in 2015, generating a revenue of 5,200 billion VND (230 million USD), a 45-percent surge from 2014.

Seafood exports plunge 14 per cent year-on-year

The country's seafood exports fell to an estimated US$6.72 billion in 2015, down 14.3 per cent over 2014 and 10.4 per cent compared with this year's target.

Data from the Directorate of Fisheries under the Ministry of Agriculture and Rural Development detailed how total seafood output reached more than 6.56 million tonnes. Of this total, fishing output hit 3.03 million tonnes while farming output was 3.53 million tonnes.

The domestic seafood sector saw many challenges in 2015, especially in export markets, deputy head of the Directorate of Fisheries Nguyen Thi Thu Nguyet told a conference on reviewing the performance of the industry, held in Ha Noi on Friday.

She blamed the country's reduced seafood export turnover on the global economy's modest growth rate, while the demand for seafood from overseas markets, despite a rebound, remained low this year.

Meanwhile, Vietnamese seafood products also faced harsh competition over that of rival countries, Nguyet said, saying problems with exporting shrimp was a good example of this competition.

After being impacted by disease, many shrimp-producing countries resumed their production capacities, creating fierce competition with shrimp products from Viet Nam.

Also, unchanged antidumping tariffs imposed on Viet Nam's tra fish in the US market, and stricter requirements on levels of banned substances in other markets, had contributed to this year's seafood export decline, she noted.

However, Minister of Agriculture and Rural Development Cao Duc Phat said, despite facing difficulties this year, the seafood industry had still shown stable growth rates in the 2011-15 period.

Total seafood output increased 3.8 per cent per year, 9.3 per cent higher than the five year period's plan. Of these, fishing output rose 4.7 per cent and farming output was up 3 per cent.

The ministry is now working to reach outputs of 6.4 million tonnes of seafood and $7.6 billion in the value of exports next year.

Phat called on the domestic seafood industry to speed up restructuring to assure future sustainability, as well as the continued development of quality next year, as a move to improve competition in the world market.

FMCG growth gains momentum

Fast-Moving Consumer Goods (FMCG) growth in six key cities in Viet Nam – Ha Noi, HCM, Hai Phong, Can Tho, Nha Trang and Da Nang – gained momentum in the third quarter with 4.5 per cent growth compared to 0.9 per cent in the second quarter.

This was due to an increase of 3.6 per cent volume growth, according to the quarterly Market Pulse report released by Nielsen, a global performance measurement company.

"Although the FMCG growth in Q3 shows recovery, the signs reflect the volatility of Viet Nam, which places a lot of challenges for manufacturers to make sound decisions to fully seize market growth opportunities and drive a profitable business," said Nguyen Huong Quynh, executive director of Retail Measurement Services.

Quynh said that FMCG growth across Asia Pacific has run consistently around 5 per cent each quarter during the past two years.

"The FMCG growth in Viet Nam has not yet reached 5 per cent in any quarter of the past two years," she added.

"Asia-Pacific FMCG growth has mainly been driven more and more by volume increases while price increases have slowed down. Similarly, price increases have slowed down in Viet Nam, but it's still not compensated for entirely by volume growth."

The Market Pulse Report was based on the results of the Nielsen Retail Measurement study of FMCG in major categories.

FMCG in Viet Nam includes seven super categories – beverage (including beer), food, milk base, household care, personal care, cigarettes and baby care.

Only beverage shows consistent long-term and short-term growth, according to the report.

Beverages continued to be the biggest contribution to total FMCG growth (38 per cent) in the third quarter, and peaked with 9.9 per cent growth, mainly led by a volume increase of 7.3 per cent.

Other super categories all showed stagnancy.

"The sustainable growth of beverages was due to three trends that stand out among many others," including health, convenience and innovation, Quynh said.

According to Nielsen's report, health factors have become an important influencer of purchasing decisions, which was highlighted by 51 per cent of Vietnamese giving priority to nutrition-fortified products, 39 per cent preferring products with natural ingredients and 32 per cent paying attention with low fat, low sugar and low calories.

When it comes to the trend of convenience, it stands out when looking at in-category package trends.

This category is seeing big packages growing faster, which has the potential to lead to uneven growth. When using bigger packages, consumers do not need to go to the store often and do not have to worry about running out, which makes for slower future growth of these categories.

The Nielsen study also revealed that the trend of innovation requires a great deal of efforts to identify what manufacturers have to invest in to expand their categories rather than just provide something new for a new stage.

This is the key factor for making a breakthrough innovation to ensure long-term sustainable growth.

HCM City to cut power outages

The HCM City Electricity Company has promised to reduce scheduled brownouts by 20 per cent in the last two month of this lunar year and fix power outages within 75 minutes at a recent meeting with European, South Korean, and US companies.

The companies have been complaining that the electricity supply is unreliable and it takes the utility too long to fix power outages.

At the meeting they suggested that businesses should be informed in advance about load shedding plans by email.

The Government's website, chinhphu.vn, quotes EVN chairman Duong Quang Thanh as saying: "In recent times Viet Nam Electricity Group (EVN) has increased investment in power generation and the grid to meet the 11-12 per cent yearly increase in power demand.

"During the investment process, EVN has not ensured best quality of power supply.

"EVN has set up five customer-care centres to improve our service quality."

Senior officials at the HCM City Electricity Company promised to discuss grid upgrade plans with customers and inform them about the schedule at least one month in advance, and to complete all such tasks within five hours.

In addition, the company has begun to use live-line technology that enables it to fix outages quicker.

In the first 11 months of this year it was used on 2,774 occasions, 100 per cent higher than in 2014.

This year the company has supplied 19 billion KWh of power, nearly 9 per cent higher year-on-year.

Consignment stores boom in Vietnam

Recently, consignment ‘warehouses’ offering used clothes at affordable prices have become increasingly appealing to shoppers, consigners and intermediate consignees alike.

Consignment or ‘warehouse’ stores are retail outlets that stock and sell goods on a sale-or-return basis, or through an agent working on a commission basis.

Modeled after well-known consignment chains around the world, including Second Time Around and Once Upon A Child, such stores in large Vietnamese cities have served as middlemen connecting consigners who no longer want their used items with shoppers on the hunt for inexpensive, trendy brands.

The model, which takes in a wide range of second-hand articles, including clothing items, accessories, cosmetics, kids’ toys and even household appliances, is believed to have first appeared in Hanoi and later expanded to other large cities, including Haiphong in the north, Danang in the central region, and Ho Chi Minh City in the south.

Shops booming in Ho Chi Minh City

On a recent weekend morning, a 60-square-meter Give Away shop, located in Binh Thanh District, was packed with dozens of eager youths hunting for their favorite items.

Many had waited patiently for half an hour to get in before the shop opened at 9:00 am.

Minh Trang, a student, said that she prefers going to consignment stores than to flea markets, which are typically brimming with people and offer too many items to choose from.

Hong Loan, 23, the owner of the Give Away shop, has brought the best out of her space with neat rows of attire and footwear, visually-striking décor and a cozy atmosphere.

Her clientele are mostly youngsters and families.

At 7:00 pm another day, Second Chance Shop, situated in District 1 in the city’s downtown, was teeming with young shoppers perusing brand fashion items.  

Meanwhile, used goods offered at Consignista Shop in District 3 looked as good as new.

Dozens of shoppers were still inside the store as it approached closing time.

A number of consignment outlets, including Ustore in Tan Phu District, only receive goods based on the trust of their business colleagues.

Goods consignment can also be conducted online as some intermediary consignees cannot afford a physical retail space.

According to Loan, the Give Away Shop owner, as long as their items are in good order, of good quality and not obsolete, consigners can suggest their own prices.

After fixing rates ranging from VND30,000 (US$1.3) to VND150,000 (US$6.6) apiece, consigners can receive sums from the sale of their items with the shops’ commissions deducted after 40 to 70 days.

Ngoc Hang, 25, Second Chance Shop owner, revealed that the model has allowed middlemen consignees to run their business with only a small investment.

“Consigned items sell relatively well thanks to a diverse mix of styles and materials and affordable prices compared to their brand-new counterparts,” she explained.

Loan said she has opened two Give Away subsidiaries in Ho Chi Minh City and another in Hanoi.

Consignment has also benefited consigners.

Huong Tra, 29, has entrusted shops with 40 of her used items, which has netted her a considerable sum and relief at being able to seek new owners for the items.

Consigners can also rest assured that their pieces will never go missing thanks to shop attendants’ meticulous coding.

Trong Danh, 32, who had to close down his own fashion shop, disclosed that consignment has offered a convenient, lucrative outlet for 70% of his unsold stock.

Ho Chi Minh City is a fertile breeding ground for consignment stores, as the bustling market is characterized by a large number of frequent shoppers, affordable rents, and ready access to online consignment and promotion.

However, several owners of consignment shops have stressed that their business is unlikely to grow without patience and dedication.

As middlemen, they have worked hard not to compromise shoppers’ and consigners’ needs while also ensuring a return.

For each sold item, they earn between VND10,000 (US$0.4) and VND30,000 (US$1.3) for articles worth less than VND150,000 (US$6.6) and 20% of the sale price for those fetching more than VND150,000.

Some ‘warehouse’ owners also charge service fees depending on how long the items are held at their shops.

They also come up with different ways to attract clients.

Since opening, the owner of Give Away shops has organized a charity event once a month to donate articles unclaimed by consigners while promoting and selling other items to potential customers.

The events’ revenues have gone toward charity funds or as gifts to orphans.

‘Warehouse’ attendants also pick up goods at consigners’ suburban homes.

However, the consignment model is by no means a bed of roses. Some shop owners have had to close down or stop trading.

Thanh Tung, 26, who shut down his consignment store nearly a year ago, explained that though returns are satisfactory, shop owners and attendants had to spend too much time on consigned goods and marketing and faced a higher risk of loss compared to trading new clothes, given the poor condition of some older items.

International arrivals to Vietnam inch down 0.2%

International visitors to Vietnam are estimated to hit 7.94 million in 2015, down 0.2% from the previous year, which is the first decrease in the last six years, according to the General Statistics Office (GSO).

The GSO said that international arrivals are projected to top 760,800 in December, up 2.6% against last month and 15% compared to the same period last year.

This is the 6th consecutive month Vietnam has recorded a jump in the number of international visitors since July, a rebound after 13 months of successive decline.

In 2015, foreign guests arriving by air increased 0.8% over last year, but those coming to Vietnam by road went down 6.5% year on year, mainly due to a drop in the number of visitors from China (down 8.5%), Cambodia ( down 43.8%), and Laos (down 16.6%).

In addition, those arriving by sea this year rose to 27.5%, mainly due to the 145% hike in December alone, the GSO said.

In terms of markets, international arrivals from Cambodia, Indonesia, Laos, the Philippines, Thailand, and China were all lower than the same period last year, according to the GSO.

The number of visitors from the respective countries were 227,100 (down 43.8%), 62,200 (down 9.3%), 114,000 (down 16.6%), 99,800 (down 3.5%), 214,000 (down 13.1%), and 1.78 million ( down 8.5%).

Meanwhile, arrivals from Europe will reach 1.36 million this year, up 0.7% over the previous year.

Visitors from the Americas are estimated at 647,700, an increase of 5% over 2014. In particular, arrivals from the US were 491,200, up 10.7% year on year.

Arrivals from Australia and New Zealand are projected to hit 341,400, a 5.1% year-on-year dip.

The number of visitors from Africa was 27,200, up 44.3% against 2014.

In recent years, thanks to the implementation of the visa exemption policy for citizens of the UK, Germany, the Netherlands, Spain and Italy, the number of visitors from these countries has been increasing.

Car sales in Vietnam surge ahead of Tet

Car sales in Vietnam have increased in the run-up to the Lunar New Year.

Pham Vu, representative of a Honda agent in Hanoi, said that his branch had sold more than 100 cars a month on average in the fourth quarter of this year, compared to 60 previously.

Despite stopping sales prices, many companies have still seen high car sales because of higher demand, Minh said.

In the first 11 months of this year, Truong Hai Auto sold 71,000 cars, up 90% against the same period of 2014, putting the company top of the sales nationwide.

According to Vietnam Automobile Manufacturers Association, 215,517 cars were sold in Vietnam between January and November, up 57% on-year. The figure is expected to reach a record 220,000 cars by late December.

People traditionally buy expensive purchases before the Lunar New Year Pham Vu said, and he also added that some were taking loans to buy cars so they could operate as Uber or Grab Taxi services, he added.

Tran Tuan Hung, general director of Lien A International Joint Stock Company which is the official distributor of Audi in Vietnam, said that Audi sales have also increased by 8-9% compared to this time of last year.

Huynh The Du, managing director of Fulbright Economics Teaching Programme said the increased sales were due to a brighter financial picture for many Vietnamese families.

HCMC office rents set to rise

Rental costs in Ho Chi Minh City’s office sector continue to head upwards thanks to the city recording strong GDP growth and foreign direct investment (FDI) inflows, according to a report from Savills released on December 22.

On the back of limited vacancies and improved macro-economic conditions, some landlords in the city are set to increase rentals for Grade A and B space. Buildings with large contiguous floor plates are now in short supply. Large occupiers will need to be mindful of lease expiry and engage early with their space planning. Several Grade A landlords are reportedly planning to increase rentals despite the existing market gross rental running at $46 per sq m per month.

In the third quarter of this year the average occupancy in Grade A and B was 93 per cent, up 2 percentage points year-on-year. Grade A saw the best performance, at 96 per cent - the highest for the last six years. Ho Chi Minh City’s existing supply is limited to only nine buildings, including the entry of Vietcombank Tower in the third quarter. The newest Grade A projects - Saigon Center Phase 2 and Deutches House - won’t enter the market until the third quarter of 2017.

The report also pointed out that demand for Grade A and B office space mainly comes from foreign companies, accounting for 76 per cent of the leased area, while in Hanoi it is 66 per cent. Most tenants are in the banking, finance, and insurance sector.

By 2017 new Grade A and B supply in Ho Chi Minh City will be approximately 190,000 sq m, of which 77 per cent will be located in the central area. District 1 remains the most sought-after location and competition is expected to intensify. Districts 3 and 7 are emerging as alternative options for tenants who want to acquire large office space with lower rentals. Future prime locations such as Thu Thiem are now under development by major local and regional players. This will alter the cityscape significantly, with good infrastructure and connections, quality amenities, and a pleasant environment to live and work in.

Back in favor

The residential market across Vietnam has performed well this year. “We have witnessed strong growth in both demand and supply in the apartment sector,” said Mr. Neil MacGregor, Managing Director of Savills Vietnam.

Many projects entering the market in 2015 have achieved high absorption rates, especially when they are developed in strategic locations by credible developers, such as Riviera Point in District 7, Ho Chi Minh City, Watermark in Cau Giay district, Hanoi, and most recently The Nassim in District 2 and City Garden Phase 2 in Binh Thanh district, Ho Chi Minh City.

The villa and townhouse segment has also seen strong growth and sales performance, according to Savills. Dai Phuoc Lotus in southern Dong Nai province, Villa Park in District 9, Ho Chi Minh City, and The Point in Da Nang are outstanding examples.

For the first nine months of this year the condominium sales volume was close to the whole-year peak seen in 2009 in Hanoi while in Ho Chi Minh City it reached a new record, with nearly 25,000 units sold in the period, according to a CBRE report.

Interestingly, the high-end segment has taken over from the affordable segment in terms of successful transaction numbers.

“Even though it is still early to talk about capital gains in Vietnam again, investors can enjoy a gross rental yield of 6-8 per cent at some high-end projects in District 2 and District 7 in Ho Chi Minh City,” Mr. Marc Townsend, Managing Director of CBRE said. The availability of a ready pool of tenants in these districts, especially for projects near international schools, also helps investors quickly sell their apartments.

The key drivers in Vietnam’s property market in 2015 have been the economic recovery, controlled inflation and interest rates, rapidly improving infrastructure, the stimulus package to fund affordable housing, and a more supportive legal framework, according to industry insiders.

In particular, the new Law on Housing and Law on Real Estate Business, which came into effect on July 1, were significant and important steps towards opening up Vietnam’s real estate market to overseas investment. The Amended Law on Housing has created favorable conditions for foreigners to own properties in Vietnam.

“More developers are now considering sales and marketing plans to attract this group of target buyers,” said Mr. MacGregor. The new Law represents a significant step in foreigners securing properties Vietnam and further guidance has recently been issued by authorities. The new Land Law has also clarified a number of issues, providing real estate investors with much-needed confidence.

While there has been notable interest from foreigners who live and work in Vietnam, there have been very limited sales to offshore foreigners to date, Mr. Townsend said.

In contrast to local buyers, who are familiar with the market, when foreigners buy homes they have many questions about the administrative process, potential capital gains, and rental yields. They look far into the future, he said, and are concerned about any potential implications or problems related to selling their assets when the time comes.

Many potential buyers are still waiting for more guidance and progress in implementation. As an agent targeting this group of buyers, CBRE has observed that professionalism, language proficiency, and ease of credit card payments are some of the key concerns.

Last but not least, offshore buyers are still looking at how to get money in and out of Vietnam, which can be difficult. “Until all of these issues are addressed we believe it may take several years to see a number of foreign buyers actually buying into the market,” Mr. Townsend confirmed.

Foreign direct investment (FDI) in real estate has increased strongly since the early months of this year. This appears to show that foreign investors long believed the TPP would conclude this year, Mr. Nguyen Manh Ha, Chairman of Phu Quy Land Company, was quoted as saying.

Vietnam’s property market attracted $1.81 billion in FDI to 19 new projects in the first nine months and seven existing projects increased their registered capital, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment (MPI).

Bright prospects

Among others, real estate investors and insiders have high expectations over the potential of Vietnam’s real estate market in all segments given the imminent TPP and ASEAN Economic Community (AEC).

“The partnerships will have a significant and positive impact on Vietnam’s real estate market,” according to Mr. David Blackhall, Managing Director of VinaCapital Real Estate.

“While the TPP’s impact is likely to be seen over the medium to long term, the AEC should impact the industrial sectors of member countries almost immediately, with some positive impacts expected to be seen in the local office and retail markets.”

The two agreements may well trigger a healthy rise in the industrial market, which in turn will bolster the growth in office demand as more multinational corporations (MNCs) enter the market and more small and medium-sized enterprises (SMEs) expand in the country.

Personal wealth and living standards should increase markedly, which will have massive implications for the real estate market in general, as people save more and look to invest. One of the main outlets for this investment would be the real estate market, especially condominiums for sale, according to one insider.

While there is still a long process before the full benefits of the trade agreements are seen, it is a great time for real estate investors to prepare for the anticipated increase in demand, according to Mr. MacGregor. Vietnam is emerging from the bottom of the real estate market cycle and the time is right to secure development projects and begin construction.

“It is important that projects are built to international standards to appeal to this renewed influx of foreign demand, while the government needs to continue the focus on investment in infrastructure to maximize the opportunities,” he added.

“We hold a very positive view for 2016, with a hope that inflation and interest rates will continue to be under control and new legislation will start showing initial results after being in place for one year. More and more foreign investors will come to Vietnam at both the entity and individual level. Foreign investors love the size of the population, rising affordability, and rapid urbanization in the two major cities of Ho Chi Minh City and Hanoi.”

Mr. Marc Townsend, Managing Director of CBRE Vietnam

“We remain very positive about the residential market across Vietnam over the next 6-12 months. We’re also seeing more demand from real buyers and less speculation in the residential market, particularly in Ho Chi Minh City. We expect price increases to remain moderate given the large volumes of supply. With the effect of the amended housing law we anticipate an increased level of inquiries from foreigners looking to buy properties in Vietnam in the months to come.”

Mr. Neil MacGregor, Managing Director of Savills Vietnam

“The performance of office for lease in 2016 will be more driven by supply. There is a shortage in Ho Chi Minh City and too much in Hanoi, so different trajectories in rents will continue. Building-by-building, quality will be the key factor in 2016, not only in construction but also management and operation. The bigger multinationals become the more demanding they are in terms of building performance, service and quality, as are their best staff.”

Mr. Alex Crane, General Manager of C&W Vietnam

VNPT profits VND 3,280billion in 2015

Vietnam Post & Telecommunications Group (VNPT) organized its meeting on December 12 in Ha Noi to introduce its 2016 business plan.

At the meeting, Mr. Pham Duc Long, General director of VNPT affirmed, VNPT has completed its re-restructuring progress and officialy carried out in accordance with three level model "Infrastructure- Services -Business".

As a result, in 2015 VNPT maintained a high growth rate. It made total profit of VND 3,280billion, accounting for 111.7 percent of its plan, an increase of 20 percent compared to last year.

The number of VNPT subscribers totaled 33.7 million, a 3.3 million increase compared to last year while the number of internet broadband and IPTV subscribers is 3.3 million.

VNPT is expected to contribute VND 3,555 billion to the state's budget.

Investors required to place deposits for land allocations

From December 27, investors will have to place deposits before getting approval from authorities for land allocations to carry out their projects in line with a Government decree.

Decree 118/2015/ND-CP requires investors to place the deposit if they want to get permission to change the usage purpose of land allocated to their investment projects.

Previously, the 2005 investment law and related legal documents did not require investors to place a deposit as a guarantee for their projects to proceed as pledged to prevent State properties from being wasted. But this is compulsory in the 2014 law.

Under Decree 118, deposits will be based on the percentage of investment cost. In particular, the deposit will be 3% of investment cost of VND300 billion (around US$13,200) or lower for a project, 2% of VND300 billion to VND1 trillion, and 1% of higher than VND1 trillion.

The deposit will be placed in a designated account of the investment registration agency at a commercial bank in Vietnam. The investor is responsible for paying the fee of opening and maintaining the account and conducting related transactions.

The deposit will be returned to investors depending on the progress of their investment projects.

However, deposits are exempted for investors who win tenders for land or lease land with total rent paid only once. Investors winning investment projects and having land transferred or leased by the State will also be free from the deposit requirement.

Trade program produces 480 contracts this year

Businesses in HCMC and provinces have clinched a total of 482 contracts through the city’s supply-demand matching program for this year.

The figure was released at the fourth program between HCMC and provinces held on December 23 as part of a major trade cooperation plan between the city and other localities in the south.

After four years, the program had resulted in nearly 1,440 contracts for retailers, distributors and suppliers in HCMC and provinces, with 886 contracts worth a combined VND20 trillion (US$880 million) realized.

Firms in HCMC have bought over VND13.5 trillion worth of goods and supplied goods valued at over VND6.5 trillion to partners in provinces.

Le Ngoc Dao, deputy director of the HCMC Department of Industry and Trade, said this year’s program has found more products of higher quality. Many more goods chosen for the program meet Vietnamese Good Agriculture Practice (VietGap) and Hazard Analysis and Critical Control Point (HACCP) standards and have been certified as safe and qualified.

This year, the program has focused more on building a bridge between traders and traditional wet markets in order to boost supply of high-quality and safe products for the markets as well as restaurants, hotels and canteens.

Dao said HCMC enterprises can supply 20-30% of goods for local consumption and the rest come from provinces.

The biggest success of the program is that participating firms have stepped up cooperation with partners and investment in goods production in provinces to increase supplies, Dao said.

The program has helped improve the quality and packaging of goods and exports of more products.

The Saigon Union of Trading Cooperatives (Saigon Co.op) has exported 83 container loads of goods worth nearly US$1.77 million to Singapore, while Big C has shipped abroad 1,100 container loads costing US$25 million.

Lotte Mart has exported US$750,000 worth of goods to South Korea. Saigon Trading Group (Satra) and Binh Dien Wholesale Market are expected to sell goods to foreign market in the future.

The department has cooperated with agriculture departments in other provinces in supporting their businesses and farmers to establish areas for production of quality farm produce. The agency has worked with distributors, exporters and enterprises in HCMC over consumption of quality products for them.

Distributors in HCMC have plans to back enterprises and farming households in provinces to standardize their production and cultivation process, enhance quality and packaging of their products, and build brands for their products.

At the fourth supply-demand matching program, four enterprises registered an additional 38 safe product selling points, bringing the total in the city to 284. They were Vietnam Dairy Products Joint Stock Company (Vinamilk), Pham Ton Co. Ltd., Queen Investment Trading Service Joint Stock Company, and Thanh Thien Loc Joint Stock Company.

Vingroup simultaneously opens three shopping malls

Vingroup Joint Stock Company simultaneously held grand openings for three new retail shopping centres on December 24, just in time for Christmas.

The three shopping centres are the Vincom Megal Mall Thao Dien in Ho Chi Minh City, the Vincom Plaza Viet Tri in the northern province of Phu Tho and Vincom Plaza Long Xuyen in the southern province of An Giang.

The inauguration of the shopping plazas brings the total number of Vingroup’s shopping malls to 16 nationwide.

The Vincom Megal Mall Thao Dien in Ho Chi Minh City is built on a total area of nearly 90,000 square metres whilst Vincom Plaza Viet Tri and Vincom Plaza Long Xuyen cover nearly 22,000 square meters and 15,000 square meters, respectively.

The three shopping malls comprise fashion centres featuring products of renowned domestic and international brands, and supermarkets which offers essential goods for consumers.

Other attractions at the three new facilities are playgrounds for children along with movie theatres for cinema lovers.

Vingroup is now the leader in the country’s modern retail business sector. The group is scheduled to continue to expand its retail system to other cities and provinces, with Hai Phong city and Da Nang city coming in next on the list.

Vingroup is targeting to open nearly 50 trade centres nationwide by 2016.

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR