Sandy beaches a solid foundation

The central region has enjoyed a robust growth in tourism in 2017 with the highlight of the APEC Economic Leaders’ Week in Danang, which gave a boost to the region to lure in hospitality investors.

According to statistics from the central cities and provinces, the region has attracted an increasing number of tourist arrivals in 2017. Danang recorded six million tourist arrivals in the first ten months of 2017, while Quang Binh welcomed roughly three million. Nha Trang and Hue saw 4.5 and three million tourist arrivals, respectively, during the period. It is evident that the central region’s scenic coastline has contributed significantly to the development of the local tourism industry.

“The central region is home to long stretches of sandy beaches. This, coupled with urban development along the coast, gives the region an edge over other tourism destinations in Asia,” said Nguyen Duc Quynh, deputy director of Furama Resort Danang.

Quang Binh, known for its long coastline and rolling white sand dunes, has become a new destination for hospitality investors. FLC Group has poured VND13.8 trillion ($607.2 million) into a resort complex with a golf course, villas, and entertainment facilities in the central province.

In Thua Thien-Hue, Lang Co is planned to become a new urban area with modern hospitality services. Singapore’s Banyan Tree Group and Laguna Vietnam Co., Ltd. have recently requested permission to raise investment capital to $2 billion to expand the world-class integrated resort Laguna Lang Co in the province. Another notable project is Mediterraneo Resort by Vincoland, which has already finished the bare-shell construction of villas and hotels.

Not far from Lang Co, at Vinh Thanh and Vinh An communes of Phu Vang District, BRG Group is building a high-end resort complex with an investment capital of VND2 trillion ($88 million). PSH Group from Spain is also conducting research as well as completing investment procedures for Hue Amusement & Beach Park worth VND1.06 trillion ($46.64 million) in the coastal communes.

Quang Nam and Danang are the most popular areas buzzing with activity on the regional tourism map. The areas have a coastline connecting Son Tra in Danang and Dien Ngoc in Quang Nam running through the ancient town of Hoi An. The place has been a hotspot for hospitality investors in recent years. Several luxury resorts have appeared over the past two years, including Ariyana Beach Resort & Suite Danang, CocoBay Danang, Naman Retreat, The Nam Hai, Palm Garden Beach Resort & Spa, and Vinpearl Resort & Villas Hoi An.

In Binh Dinh, FLC has developed FLC Quy Nhon Beach & Golf Resort with the total investment of VND7 trillion ($308 million). This is the first large-scale project on an international level that has been completed and is fully operational at Phuong Mai-Nui Ba, a national tourist attraction. The pioneer project is expected to impact the province as well as woo an incredible number of tourists to Quy Nhon-Binh Dinh.

Along with Danang and Phu Quoc, Nha Trang in Khanh Hoa is one of the three hottest spots in the Vietnamese hospitality market. Numerous property giants have flocked to the city with large-scale projects worth millions of dollars. Nha Trang is now home to the largest number of hospitality projects in Vietnam. Some notable projects include Vinpearl Empire Condotel, Vinpearl Beachfront Condotel, Panorama Condotel, Ariyana Smart Condotel, Havana Nha Trang Plaza, Starcity Nha Trang, and Novotel Hotel.

Danang and Nha Trang have been in the spotlight of the regional hospitality market. According to real estate services firm Savills Vietnam, Danang saw large hotel supply in the first half of 2017. The total stock from the 86 three- to five-star hotels was approximately 9,400 rooms. As local tourism saw strong growth, five-star hotels continue to be the highest performers in the market. Over 1,300 four- to five-star rooms came online in the second half of 2017.

According to reports by CBRE Vietnam, there were 7,697 condotels, three golf courses, and 771 villas on sale in Danang in the third quarter of 2017.

Meanwhile, Nha Trang had 10,138 four- to five-star hotel rooms, 1,190 villas, and 10,913 condotels. CBRE Vietnam forecasts that this figure will increase to 36,715 rooms by 2020.

As the wave of capital inflows to the central hospitality market shows no signs of slowing down, concerns arise about a future oversupply, especially as many condotel projects are underway. However, industry insiders said that the hospitality segment is an attractive investment channel bolstered by strong local tourism and high average occupancy rates.

“The development of hospitality projects and large-scale entertainment complexes along the central coastline will bring several benefits,” Erik Billgren, general manager of Savills Vietnam in Danang, said, noting that the most noticeable projects are Hoiana and CocoBay situated between Danang and Hoi An.

According to Billgren, the resorts and relevant services that centre on the coastline of the region will help improve occupancy rates, catering, and other relevant services. “These projects will create employment and tax revenue, which is a good thing for socioeconomic development,” he said.

Duong Thuy Dung, senior director at CBRE Vietnam, said that the wave of investment in resort property was to meet visitors’ demands before and after the APEC Economic Leaders’ Week took place in Danang in 2017. With the expectation that property prices will increase after the major event, developers have ramped up development in the city, especially condotel projects, in anticipation of the trend.

Can Southeast Asia’s largest mixed-use development revitalise Vietnam?

Thu Thiem, Ho Chi Minh City’s proposed financial district and mixed-use urban area, is set to become the largest inner city development in Southeast Asia in the coming years.

Over the past 30 years, Ho Chi Minh City has witnessed a meteoric rise. However, rapid growth comes with growing pains. Infrastructure within the existing central business district (CBD) is starting to buckle under the pressure of rapid expansion, vacant land is difficult to find, land value has reached a level that makes returns on office development and investment less attractive, and office rents have reached levels not seen in 2008. The master plan for Thu Thiem will alleviate these pressures, with the possibility of saving some of the historic urban centre of the “Pearl of Asia” from demolition and redevelopment.

The 657-hectare site of Thu Thiem is located on the Saigon River’s opposite site, facing the existing CBD. Comprising of 176 land parcels with approximately 3.2 million square metres (GFA) of residential space and 3.4 million sq.m (GFA) of commercial space, the total site will eventually accommodate a residential population of 145,000 and a workforce of 217,000. The new financial district will be home to a number of major head offices and will become a vibrant destination combining residences, offices, shopping centres, hotels, and serviced apartments.

Thu Thiem is a strategic getaway from Ho Chi Minh City to future development areas to the east, including the newly-proposed Long Thanh International Airport. With Thu Thiem Bridge 1 and Thu Thiem Tunnel under operation and once the four other bridges that are either under construction or planning are completed, residents in the CBD and neighbouring districts will have direct connection to Thu Thiem.

Thu Thiem will benefit from the future Metro Line No. 2, which stretches from Thu Thiem (District 2) and ends in An Suong (District 12) with the total length of approximately 19 kilometres. It is forecasted that once complete, the metro line will handle approximately 480,000 passengers per day.

The most common way to obtain land in Thu Thiem is through the build-transfer (BT) agreement where a land plot is granted for developers in exchange for investing in infrastructure in the new urban area. 45 per cent of the total development site area have been officially approved through a BT agreement in which Dai Quang Minh Real Estate Investment Corporation, the developer of Sala City, has been granted the largest land bank in return for constructing four main internal roads (Crescent Boulevard, Central Lakeside Road, Saigon Riverside Road, and the road through the ecological forest located in the Southern Delta), Thu Thiem Bridge 2, and a pedestrian bridge. In addition, other parts of Thu Thiem are dedicated to this developer to build a 20-hectare Central Plaza and a 9-ha River Park, the 1:500 master plan of which are in progress.

Similarly, Ho Chi Minh City Infrastructure Investment JSC (CII) was granted approximately 90,000sq.m of freehold land and 6,000sq.m of 50-year leasehold land for residential and commercial purposes in exchange for the construction of technical infrastructure for the northern residential area, which consists of neighbourhoods 3 and 4 and the main North-South arterial road.

Phat Dat Real Estate Development Corporation has also been approved by the Ho Chi Minh City People’s Committee to conduct a study on the construction of Thu Thiem Bridge 4, which will link the peninsula to District 7.

Alternatively, land can be obtained through the bidding process. In 2011, the city authorities started the first tender for land parcels in Thu Thiem. Prior to 2016, 10 per cent of the total development site area was granted through the bidding process to different consortiums of large investors.

According to the announcement of the Thu Thiem Management Authority, in the second quarter of 2017, the remaining 16 per cent of the total development site will be tendered with a focus on five parcels in neighbourhood 2a.

With the majority of the total land bank in Thu Thiem confirmed, the remaining available land bank is scarce, while the demand for investment remains strong.

Land values within Thu Thiem have increased by 30 to 40 per cent in the past three years. While this is a considerable uplift, we believe it can be sustained for the following reasons: (1) the initial land value is coming off a relatively low base, (2) the speed of infrastructure construction has increased dramatically during this period, (3) the most recent residential projects launched in Thu Thiem have witnessed strong demand, and finally, (4) Thu Thiem is the largest undeveloped clean and clear master-planned land within the city centre.

On average, land prices in Thu Thiem are approximately one-third of District 1 and relatively low compared to neighbouring districts such as districts 3 and 4. In addition to land values appreciating in Thu Thiem, the neighbouring areas in District 2, such as Dong Van Cong, An Phu, and Thao Dien, have also witnessed increasing land prices. With rapid urbanisation, the establishment of Thu Thiem projects and some improvement in the legal and planning framework, it is reasonable to say that land prices will continue to increase over the coming years. The largest beneficiaries from this price movement will be the early pioneer investors in Thu Thiem as the higher risks that they had to bear in the early stage of development are compensated.

With a booming high-end residential market and the abundant opportunities for commercial development, District 2 has become the focal point for large-scale developments in the last three years. Because of the quality of the master plan and the proximity to District 1, Thu Thiem is possibly the most attractive part of District 2.

The Empire City project—developed by a consortium of Keppel Land, Gaw Capital Partners, Tran Thai Real Estate Co., Ltd., and Tien Phuoc Real Estate JSC—commenced a soft launch in December 2016 and a subsequent launch in July 2017, with the projects named as Linden Residence and Tilia Residence. These two launches demonstrate the latest ‘craze’ in demand for Thu Thiem. Both residential projects, totalling up to approximately 1,000 units, were almost sold out within the first few weeks of the launch. The average selling price of Tilia increased by approximately 20 to 25 per cent in comparison to Linden during the first six months. This increment is not only due to Tilia’s closer proximity to the Saigon River and better quality in terms of design and construction, but is also a reflection of high demand for the project.

Similarly, Dai Quang Minh’s Sala City has sold 95 to 100 per cent and recorded a 30 to 35 per cent increase in sale prices compared to the first launch in 2015. Both the projects of Empire City and Sala City have indicated strong appetite to invest in the high-end residential market in Thu Thiem.

Despite the recent increase in transaction volumes and prices, JLL believes that the current cycle has yet to reach its peak. It is forecasted that the supply of apartments in Thu Thiem will rise in the coming years as a new wave of luxury branded apartments from major investors is expected to hit the market. This new wave of supply might establish a new price level in Thu Thiem as the urban area becomes more developed with value-added services such as offices, commercial areas, shopping centres, entertainment venues, schools, and hospitals, among others.

The apartment selling price is predicted to keep on rising and we expect that this uptick will be an offset helping investors achieve the expected returns as land prices increase. Given a growing economy with strong demand from the buyers who either have cash on-hand or the ability to leverage, it is likely to see that buyers are taking a long-term view in their purchasing decision which is a positive sign for Thu Thiem. There are still plenty of investors hunting for good investment opportunities in Thu Thiem at a reasonable land price through acquisition or joint venture with good local partners. Hence, we expect this trend to support strong sustainable growth in this focal development of the city.

Although officially planned since 2005, it took two years to complete the first bridge and another four years to complete the tunnel, the second connection between Thu Thiem and the city’s downtown area. The paucity of support for infrastructure development and lack of incentives are the biggest impediments to Thu Thiem’s development.

Nonetheless, it is also observed that in these cases, it took time for the initial steps to be accomplished. As soon as the infrastructure development takes shape, the market will respond. Developers will be more confident and occupiers and buyers will be attracted to this rising opportunity.

As a late starter, Thu Thiem has the advantage of having an advanced master plan and learn from the experiences of other townships. Local authorities are able to introduce “smart city” concept and Thu Thiem will become Ho Chi Minh City’s premier destination for residential and commercial development.

With pressure mounting on the existing CBD and the renewed impetus to complete major infrastructure, JLL believes that now more than ever since its inception 12 years ago, Thu Thiem has reached a “tipping point.” It is time for investors to set their sights on Thu Thiem for the investment opportunities it offers.

CapitaLand to develop first integrated development in Hanoi

Stepping up growth momentum in one of its key markets, Singapore’s CapitaLand Limited has acquired a prime site for its first integrated development in Hanoi and has successfully set up its second commercial fund in the country, the $130-million CapitaLand Vietnam Commercial Value-Added Fund (CVCVF).

With a fund life span of eight years, CapitaLand will hold a 50 per cent stake in CVCVF with the balance interest held by MEA Commercial Holdings Pte. Ltd.

CVCVF will focus on Grade A commercial properties in Vietnam. Located in Hanoi’s exclusive Tay Ho district with unblocked views of the scenic West Lake, the upcoming 25-storey integrated development worth about $217 million will comprise of a 380-unit residence including SoHo apartments, around 230,000 square feet of office space, and over 208,000 square feet of retail space.

According to Lim Ming Yan, president and group CEO of CapitaLand Limited, this mixed-use development allows the company to strategically diversify and optimise its portfolio in Vietnam with both good trading returns and a strong recurring income stream.

“With this latest project, we expand our presence in the capital and reaffirm CapitaLand’s commitment as a long-term partner in Vietnam’s urbanisation journey,”Yan said.

“Together with our $300-million CapitaLand Vietnam Commercial Fund, which was set up last year, we are now closer to our five-year target of leveraging private equity funds to grow our assets under management by S$10 billion ($7.54 billion) before 2020. We are pleased to be able to work with reputable capital partners who want to invest through CapitaLand, given our deep local insights and execution know-how. This allows us to scale up fast and be nimble in seizing opportunities in fast-growing markets like Vietnam,” he added.

Chen Lian Pang, CEO of CapitaLand Vietnam, added that the country was a key growth market for CapitaLand and the company sees strong demand for vibrant, quality live-work-play spaces with rapid urbanisation and the evolving lifestyles of young and mobile Vietnamese people.

“Harnessing our vast experience across different real estate types, this upcoming integrated development will offer the best-in-class in homes, offices, and malls which will attract young Vietnamese urbanites, multinational companies, and local startups,” Pang said.

2017 was a year of stellar growth for CapitaLand in Vietnam with the highest home sales ever achieved (1,409 residential units) and sale value surpassing the previous year by 63 per cent.

The integrated development will stand on an approximately 0.9ha site in Tay Ho District, well connected to both the new and old business districts, and less than a 20-minute drive away from Hanoi’s Noi Bai International Airport.

Vietnam is the third largest market for CapitaLand in Southeast Asia, after Singapore and Malaysia.

As of the end of December 2017, it had S$948 million ($715 million) worth of gross assets under management in Vietnam. The latest acquisition will expand CapitaLand’s portfolio to 12 residential developments, one integrated development, and 21 serviced residences with around 4,700 units across six cities in Vietnam.

Apartment launches break year-long silence

In 2017, the Ho Chi Minh City real estate market was poised to grow thanks to vibrant transactions, but in reality, many projects were delayed by red tape. The market is expecting a different scenario in 2018.

apartment launches break year long silence

According to research by CBRE Vietnam, the supply of new apartments in Ho Chi Minh City in 2017 went down by 20 per cent from 2016. The demand, on the other hand, remained robust with a slight decline of 5 per cent year-on-year. 2017 was also the first year since 2012 when the sold apartments outnumbered those put on sale during the year.

Even Hung Thinh Corporation, known as “the king of apartment distribution” in Vietnam, only launched three projects called Moonlight Boulevard (Binh Tan District), Richmond City (Binh Thanh District), and Lavita Charm (Thu Duc District) during the entire year. The total number of apartments from these three projects was 2,000—and all of them have been sold within a short time.

On the contrary, Novaland Group, which manages 40 major projects, did not introduce any new projects to the market in 2017. The developer previously planned to launch at least four new apartment buildings last year.

Similarly, Him Lam Land Corporation, one of the leading developers in the south, only unveiled one project named Him Lam Phu An in District 9, with more than 1,000 units.

Other high-profile developers, such as Dat Xanh Real Estate Service & Construction Corporation, Phuc Khang Construction and Investment Corporation or An Gia Investment stayed silent during the entire year.

According to Tran Khanh Quang, CEO of Viet An Hoa Real Estate Investment JSC, the bureaucracy related to new projects was quite cumbersome. In 2017, regulations were tightened, which means many developers got stuck in complex legal procedures. This caused delays in launching new projects.

Another reason for the lack of new supply on the real estate market is the on-going inspections at some projects. This is especially true for 60 projects located on land previously managed by state-owned enterprises (SOEs). During the equitisation process of these SOEs, local authorities were strict in investigating the intended usage of the land, some even requested a temporary halt to construction works during the inspection.

It is true that the market did not see much action in 2017. However, industry insiders expect the market to spring back to life this year, as new apartments finally find their way to the market.

Right at the start of 2018, the Ho Chi Minh City real estate sector has already witnessed a slew of new projects. For example, after the success of Dragon City in Saigon South, Phu Long Real Estate Co., Ltd. has expanded its grip to the east of Ho Chi Minh City by launching Dragon Village on Nguyen Duy Trinh Street, District 9. Dragon Village, which spans an area of 21.6 hectares, is intended to become a compound area with 24/7 security, apartments, and villas.

Similarly, right at the start of 2018, Novaland has launched Victoria Village in Dong Van Cong Street, which is near the main road Mai Chi Tho in District 2. Victoria Village consists of four towers, each 25 storeys high and having one basement. Apart from 900 apartment units, the project also has 92 villas built in the Victorian architectural style. The developer has confirmed a number of other new projects scheduled for 2018.

Dat Xanh also recently announced that it would launch 10,000 apartment units in 2018. Specifically, the new supply will come from four major projects, including Gem Riverside in District 2 with 3,100 apartments in 12 towers; Opal City in District 9 with 3,500 apartments in eight towers; Opal Premium in Thu Duc District, with 4,247 apartments across 10 towers; and Lux Riverview in Saigon South.

Hung Thinh is also gearing up for new product launches. Nguyen Nam Hien, CEO of Hung Thinh Land, revealed that the developer will launch approximately 10,000 apartments in 2018, 4,000 of which will be introduced in the first quarter via a project in District 7. Another project in the east of the city, with 3,000 apartments, will also be put on sale soon. Hien said that all of these projects are ready to go on the market.

Smaller developers are also launching apartment complexes this year. For example, Dream House Investment Corporation (DRH Holdings) is ready to sell 500 apartments in Aurora Residences at 277 Ben Binh Dong Street, District 8. The developer will introduce Dream Home Riverside in District 8 as well.

Meanwhile, Hung Loc Phat Real Estate Service JSC will launch Green Star in the Phu My Hung township in District 7, consisting of 100 villas and 1,000 apartment units.

In the east of Ho Chi Minh City, Daewon-Thu Duc Housing Development Corporation will put on sale 544 apartment units at Centum Wealth. This project, which spans an area of 11,585sq.m, features three 20-storey high-rise buildings.

At the same time, Vingroup’s mega project called Vincity in District 9 is also ready to launch 30,000 apartment units on the market this year.

According to research done by most market consultants, the Ho Chi Minh City real estate sector has witnessed a hike in liquidity and prices. In the coming future, prices will not increase too much but the market should not expect any drastic declines either. It is a positive sign that most new projects are competing in terms of quality, promising a new era of high-quality products for homebuyers. If this is the case, then homebuyers will reap the greatest benefit.

Techcombank adjusts FOL to 8.54 per cent to approach foreign investors

Techcombank on March 3 announced at its annual general meeting (AGM) that it has lifted its foreign ownership limit (FOL) to 8.54 per cent in a quest to offload its treasury shares bought back last year from HSBC to foreign investors potentially from the US or the EU.

The Hanoi-based lender currently holds more than 172.35 million treasury shares, accounting for 9.39 per cent of the total outstanding shares.154.87 million of these will be available to foreign investors.

In the first batch of treasury share sales, 93.24 million units will be offered at the minimum price of VND23,445 ($1.06). The sale is expected to take place in the first or second quarter of this year, after securing the approval of the State Securities Commission.

Last September, following the buyback from HSBC Holdings, Techcombank (OTC:TCB) asked shareholders to lock the foreign ownership limit to nil until further notice. The recent lifting of its FOL, according to the lender, is to prepare to resell its treasury shares in line with the AGM resolution approved on March 3.

The share buyback from HSBC Holdings last year could have hurt Techcombank’s capital raising plan, prompting the lender to subsequently issue 500 million shares to existing shareholders and possibly other institutional investors to make up for the capital shortage in the last months of 2017.

In its report on Techcombank last year, Hanoi-based VPBank Securities (VPBS) said, “The treasury buyback [from HSBC] totaled up to VND4.041 trillion ($183.68 million) and could be the reason behind the virtually non-existent credit growth at the bank in the first six months of the year, as it had to prepare large amounts of money for the buyback.”

Ho Chi Minh City Securities Corporation (HSC) commented in one of its reports in 2017 that investor interest in acquiring Techcombank’s stakes is there, even as global banks like HSBC Holdings or Standard Chartered Public retreat.

“Even as established global banks, such as HSBC and perhaps also Standard Chartered, are looking to sell their stakes in local banks as they step up to meet Basel 3 requirements, other types of investors are jockeying to replace them,” the Ho Chi Minh City-based securities firm wrote.

“We understand that these range from regional banks from Japan, Korea or the ASEAN to some large private-equity-type investors from the region. There may also be interest from local investors, including some of the existing shareholders. Hence, we believe that TCB will not find it too hard to find a buyer for the treasury shares, although executing a deal may take several months.”

AIA delivers another year of excellent growth

The Board of Directors of AIA Group Limited (stock code: 1299) announced that AIA has delivered strong results for the year ending on November 30, 2017 with double-digit growth across main financial metrics.

Ng Keng Hooi, AIA’s group chief executive and president, said: “AIA has delivered another strong performance with double-digit growth across our main financial metrics. The value of new business increased by 28 per cent to reach a new high of $3.512 billion and we also achieved strong growth in IFRS operating profit and free surplus. Today’s results are the direct outcome of the scale, quality, and breadth of AIA’s exceptional businesses across the region and the significant progress we are making in delivering our strategic objectives.”

The board has recommended an increase of 17 per cent in the 2017 final dividend, reflecting the strength of AIA's financial results as well as their confidence in the outlook for the group.

AIA has been in Asia for almost a century, operating in some of the most dynamic and attractive life insurance markets in the world. With the corporation’s deep roots and long history in Asia, they have aligned their growth strategy with the opportunities created by the unprecedented structural economic, demographic, and social changes taking place across their markets.

AIA’s extensive distribution reach, product innovation, trusted brand, and outstanding people capabilities place them in a unique position to help safeguard the financial security of consumers across the Asia-Pacific.

“Our focus continues to be on the execution of our strategic priorities that will build on our competitive advantages and make a material difference to AIA’s future. I am confident that our teams will continue to deliver profitable growth and long term value for our shareholders as we help our customers live healthier, longer, better lives and plan for a brighter future,” Hooi said.

Eximbank offers $650,000 compensation in advance to swindled customer

After a meeting with Eximbank, Chu Thi Binh, who lost VND245 billion ($10.8 million), will check the arrangement carefully before receiving VND14.8 billion ($0.65 million) of advance compensation from Eximbank.

Chu Thi Binh, who lost VND245 billion ($10.8 million) at Eximbank, has met the bank’s Board of Management to find a solution. Eximbank agreed to pay VND14.8 billion ($0.65 million). The remaining amount will be paid after the court trial.

At first, Binh did not agree to Eximbank’s proposal, as she wanted all of her money returned, including the original amount and interest. Finally, she agreed to check the arrangement carefully before making her decision.

Eximbank said that the advance payment expresses the bank's responsibility for the client, while waiting for the court.

Earlier in 2013, Binh opened three savings accounts with the total original amount of VND301 billion ($13.26 million), including VND247 billion ($10.9 million) in the first account, VND49 billion ($2.16 million) in the second account, and VND5.4 billion ($0.24 million) in the third account.

In February 2017, upon the maturity date of the VND49 billion savings account, she contacted the bank to withdraw the money, but Eximbank said that her money has disappeared from the system. She checked all the saving accounts and Eximbank informed her that VND245 billion ($10.8 million) has disappeared.

Subsequent investigation revealed that Le Nguyen Hung, former deputy director of an Eximbank branch in Ho Chi Minh City forged documents to withdraw money from her saving accounts and left the country.

Growth boosts demand for industrial land

Demand for industrial land around the country is expected to increase thanks to significant growth in terms of both industrial production and FDI.

Last year the city’s index of industrial production grew by 7.9 per cent while Hà Nội’s expanded by 7.1 per cent.

FDI flows into HCM City topped $6.3 billion while for Hà Nội they were worth $2.4 billion, a national year-on-year increase of 22.5 per cent, and most foreign and domestic investors are seeking to expand production.

At HCM City IPs, according to real estate service consultant Colliers International, at the end of 2017 the average annual rent was $142.2 per square metre, an increase of 0.9 per cent from the previous year.

HCM City now has 20 operating IPs with a total area of 3,025 hectares. Củ Chi District has the largest number of industrial parks totally measuring 863 hectares, but the price is lowest there at $80 -90 per square metre.

By 2025 it is expected that more 2,300ha in eight new industrial parks will come into the market with a promise of better infrastructure and services.

From now through 2025 rents are expected to increase sharply.

Authorities around the country continue to offer incentives to promote supporting industries.

The HCM City science and technology department has set up a database for all enterprises in supporting industries, including foreign companies, for easy connection and technology transfer.

Around 200 hectares in the Hiệp Phước and Lê Minh Xuân 3 Industrial Parks will be earmarked for supporting industries.

Hà Nội has 11 industrial parks with 2,700 hectares, mostly in outlying districts.

Rents in Hà Nội’s IPs increased more than in HCM City in 2017 with an occupation rate of 82.6 per cent, 5.3 percentage points higher than the year before.

By 2020 Hà Nội will have 14 more IPs with 6,100 hectares in operation.

“With a business-friendly environment and high demand from customers, we hope the trend will continue through 2018,” David Jackson, general director of Colliers International Việt Nam, told the Thời báo Kinh tế Việt Nam (Việt Nam Economic Times) newspaper.

“Hà Nội is a good location close to northern industrial centres like Hải Phòng, Hưng Yên and Bắc Ninh, and this helps the city be the best location for IPs.”

In other cities too, demand for industrial land has increased as many enterprises have expanded their production since the beginning of this year.

For instance, HTMP Ltd signed a contract with TNI Holdings Việt Nam to expand its production at the Quang Minh Industrial Park, Japanese automobile parts maker Toyoda Gosei started construction of a new plant in Tiền Hải Viglacera Industrial Park in the northern province of Thái Bình.

Industrial production has recovered and is expected to expand, and the occupancy ratio at industrial parks has significantly increased, especially this year.

Mekong Innovative Startups in Tourism extends application deadline     

Mekong Innovative Startups in Tourism (MIST) Startup Accelerator will extend its application deadline for Vietnamese startups until March 24.

The original deadline was March 10. Startups hoping to take advantage of the deadline extension still must email mist@mekongbiz.org by March 10 to announce their intention to apply.

The Startup Accelerator provides support to early-stage companies with innovative and scalable business models.

The 15 to 20 startups selected to the accelerator will attend an all-expenses-paid intensive boot camp where they will compete for six months of advanced mentorship, in-kind acceleration support valued at US$20,000, prize money up to US$10,000, and customized business matching with potential investors and partners.

The Greater Mekong Sub-region’s government, tourism, and hospitality leaders have embraced MIST as a force for innovation, sustainability, and growth in the region,” said Jens Thraenhart, executive director of the Mekong Tourism Coordinating Office.

“Through this program, we have created the ideal mechanism for tourism innovators and travel startups to get paired with investors and industry mentors who can equip them to scale and thrive.”

Jason Lusk, director of the MIST programme, explained that the decision to extend the deadline was made after the Tet (Lunar New Year) holiday. “We have seen a blossoming of interest from tourism startups in Viet Nam post-Tet, and incubators in Vietnamese cities have requested additional information sessions to answer startups’ questions about the programme.”

“It made sense to extend the deadline in light of this heightened interest in our programme from quality startups,” Jason said.

Destination Mekong and the Mekong Business Initiative – with the backing of the Government of Australia, the Asian Development Bank, and the Mekong Tourism Coordinating Office – launched MIST in 2016 to propel innovation in the rapidly growing tourism markets of the Greater Mekong Sub-region.

MIST aims to expedite tourism industry growth, create an ecosystem that inspires innovation, and promote sustainability in tourism.

Interested companies can find application details online at mist.asia. 

Project to promote exports to Middle East     

Vietnamese export companies will have opportunities to set up distribution channels in the Middle East thanks to a market research programme launched by the Investment and Trade Promotion Centre in HCM City and the Vietnamese Embassy’s Commercial Affair Office in the United Arab Emirates (UAE).

The research will be carried out from March 4-9 this year. It aims to help rice, food and fruit exporters seek opportunities in Middle Eastern nations.

According to the Ministry of Industry and Trade, trade between Viet Nam and the Middle East reached US$12.8 billion in 2017, up 17.4 per cent from 2016.

Viet Nam’s main exports were mobile phones, computers and accessories, seafood, footwear, garment and textiles, fibre, rice, pepper, wood products, cashew nuts, natural rubber, vegetables and fruit and coffee beans.

The country mostly imported materials for domestic production, such as plastic, liquefied gas, electronic spare parts, machines and animal feed, from the Middle East. 

Thanh Hoa hands over expanded site for Nghi Son refinery plant

The People’s Committee of the north central province of Thanh Hoa has handed over an expanded site in the Nghi Son Economic Zone and local industrial parks for the implementation of the Nghi Son Oil Refinery and Petrochemical (NSRP) complex.

The committee also presented a land use right certificate to the project on March 3.

This is a significant move to ensure safety and security for residents living near the construction site of the complex.

The expanded site has a total area of 110.4 hectares spanning Trung Yen, Nam Yen, Trung Hau and Dong Yen hamlets in Hai Yen commune, Tinh Gia district.

Land clearance has been carried out since 2013 with the resettlement of more than 1,000 households and the disarmament of bombs, mines, explosive materials and toxic substances. Local authorities have given resettlement land for 985 households.

Director General of the NSRP complex Turki Alajmi thanked local people in Hai Yen commune for ceding land for the refinery. 

This also creates extra land funds for the expansion of the project in the future, he added.

Earlier on February 28, Nghi Son Refinery & Petrochemical Limited Liability Company received the Ready For Start Up (RFSU) certificate for its NSRP project.

Turki Alajmi said: “We are proud to achieve this critical milestone for the NSRP project today. The project is strategically important to meet the growing domestic demand for refined and petrochemical products driven by rapid industrialisation and modernisation of the country.”

He thanked all the stakeholders in the NSRP project, including the Government and Thanh Hoa authorities, who have provided a favourable investment environment for the project.

The NSRP project is a joint venture sponsored by four internationally reputed corporations including Vietnam Oil and Gas Group, Kuwait Petroleum Europe B.V. from Kuwait, Idemitsu Kosan Co. Ltd and Mitsui Chemical, Inc. from Japan.

The refinery will have capacity to process 200,000 barrels of crude oil per day imported from Kuwait, equivalent to 10 million tonnes per year.

The total estimated cost of the project is 9 billion USD, making it the largest foreign direct investment project in Vietnam to date.

The refinery is scheduled to produce its first commercial oil products in May this year. 

Once operational, the project will help ensure national energy security. It is expected to contribute 10 trillion VND (436 million USD) to the local budget in 2018.

Investment from state budget exceeds 29 trillion VND in two months

Total investment capital from the State budget was estimated at more than 29 trillion VND (1.27 billion USD) in the first two months of 2018, equivalent to 8.6 percent of the yearly plan.

Of the figure, which was 6 percent higher than the same time last year, 5.6 trillion VND (247.8 million USD) came from the central budget, up 0.5 percent year-on year, and the remaining was managed by localities.

In February, total investment from the State budget was calculated at 12.58 trillion VND (553.52 million USD).

The Ministry of Planning and Investment (MPI) said most of the capital has been spent on construction works that began in 2017 and brand new projects.

According to the MPI, the total investment capital from the State budget, excluding Government bonds, planned for 2017 was 307.15 trillion VND (13.5 billion USD).

By the end of June 2017, more than 303.07 trillion VND (13.3 billion USD) or 98.7 percent of the sum was allocated. The remaining 4.074 trillion VND was capital intended for the national target programme on climate change response and green growth, two new projects of the Ministry of Agriculture and Rural Development and the northern mountainous province of Ha Giang, and capital allocated by ministries, agencies and local administrations in violation of rules.

Fruit, vegetable exports continue growth trend in two months

Vietnam exported 293,960 tonnes of fruits and vegetables worth 620 million USD in the first two months of 2018, a year-on-year rise of 47 percent and 47.6 percent, respectively.

Fruits made up 87 percent of the total value, according to General Department of Customs.

China topped the list of importers with 79.54 percent of Vietnam’s fruit-vegetable market share, followed by the US (3 percent), Japan (2.9 percent), Thailand (1.4 percent) and Malaysia (1.2 percent).

Most exported fruits and vegetables were crude products, accounting for more than 93 percent of the total export value. Meanwhile processed products comprised only 6.6 percent.

According to the Ministry of Agriculture and Rural Development, Vietnam earned a record 3.45 billion USD from fruit and vegetable exports in 2017, up 40.5 percent from the previous year.

China, Japan, the US and the Republic of Korea were the biggest importers of Vietnamese fruits and vegetables last year. Markets saw high growth were Japan (70.6 percent), the United Arab Emirates (57.4 percent) and China (54.9 percent).

The ministry said 2017 was a “bumper” year for Vietnamese fruits, with surging export turnover and entrance into many demanding markets.

There is still potential for Vietnamese fruits and vegetables in the global market, which requires the country to focus on to processing and exploring new markets instead of traditional ones.