VietNamNet Bridge - Have the Japanese been too slow to invest in Vietnamese real estate market? The current merger & acquisition (M&A) wave indicates ‘no’.



Part 1: Vietnamese market attractive to Japan

More Japanese real estate firms have shown their interest in Vietnam. Toshin Development, for example, has suggested building an underground shopping mall in HCM City. The project is expected to be developed in the Ben Thanh Market area and connect to the Ben Thanh-SuoiTien subway station.

Toshin Development plans a huge amount of investment capital of VND6.4 trillion for the project, while suggesting the PPP (private public partnership) mode with the capital contribution ratio of 67-33 percent.

The underground shopping mall would comprise two public and commercial areas. The Vietnamese partner will build public areas with the Japanese, while the Japanese firm would develop the shopping mall.

Toshin Development is a subsidiary of Takashimaya, a shopping mall development group. If the project gets approval from Vietnamese agencies, this would be the second project to be implemented by Takashimaya in HCM City.

Three years ago, Takashimaya joined forces with Keppel Land to develop a shopping mall at Saigon Center. The project is expected to open in 2016.

Real estate projects were not the focus of Japanese in the past. Over the last two decades, Japan, one of the top investors in Vietnam, invested mostly in industrial manufacturing. 

The Vietnamese real estate market has been mostly exploited by investors from Singapore, South Korea, Hong Kong and Malaysia, until the Japanese turned up recently.

Shimon Tokuyama, chair of the Japanese Enterprises Association in Vietnam, said at the Vietnam Business Forum held in Hanoi in mid-June that real estate had become the new interest for Japanese.

He noted that rapid urbanization had led to a high demand for accommodations.

This was for the first time a representative of the Japanese enterprises association had mentioned cooperation between Vietnamese and Japanese investors to develop real estate projects at such an important business forum, held between the government and the business community.

Tokyu Group has teamed up with Vietnam's Becamex to develop a project in Binh Duong province, capitalized at $1 billion. 

Aeon, a well-known Japanese retail group, which is now running a shopping mall in HCM City and building another in Hanoi, has said it would build the second one in Hanoi in the near future.

An analyst commented that Japanese seem to be moving at a “slow-pace” in Vietnam because nearly all prime land is occupied by investors from other Asian countries.