VietNamNet Bridge - The establishment of the REIT (real estate investment trust) fund shows that the real estate market has integrated more deeply into the global market.


The finance market has received Techcom Viet Nam REIT, the first of its kind in Vietnam. 

Unlike the other real estate investment funds such as VPH, managed by Saigon Asset Management (SAM), VPF managed by Dragon Capital, ILH3 by Indochina Capital and VinaLand by VinaCapital (which were established and have fund certificates listed on foreign bourses), Techcom REIT was set up in Vietnam and its certificates are listed in Vietnam. 

It is the first Vietnamese owned fund specializing in injecting money into real estate projects.

Investors, instead of spending big money to buy valuable real estate assets, now can obtain indirect ownership by buying Techcom REIT certificates with reasonable investment capital.

Le Hoang Chau, chair of the HCM City Real Estate Association, commented that REIT is considered the beginning of real estate securitization, and will be helpful in mobilizing and providing capital for the real estate market. 

The establishment of the REIT (real estate investment trust) fund shows that the real estate market has integrated more deeply into the global market.

Chau went on to say that the existence of REIT shows the Vietnamese real estate market has been developing and integrating more deeply into the global market.

As the REIT mode remains unfamiliar in Vietnam, the founders of Techcom REIT have just set a modest target of mobilizing VND50 billion for the first fundraising campaign. BIDV will serve as the supervisory and depository bank.

The fund will make investment in assets with stable cash flow which can bring long-term profits such as building for lease, hotels, resorts and shopping malls.

REIT was first seen in the US in 1960, while the funds of this kind had been present in 30 countries by 2014. There are two types of investments for REIT – Equity REIT, the most popular mode, and Mortgage REIT. In the immediate time, Techcom REIT will operate as an Equity REIT.

Though analysts believe that REIT would have positive impact on the domestic real estate market, they warned that the fund’s development may be hindered by some legal problems.

The government has issued Decree 60, allowing investors to contribute capital in property into real estate investment funds. In the past, investors could only contribute capital in cash.

However, according to Chau, problems still exist. Real estate investment funds now operate in accordance with the Stock Law. Meanwhile, the decrees that guide the implementation of the provisions relating to investment funds remain unclear.

Regarding the scale of REIT funds, Chau believes VND50 billion, the capital of Techcom REIT, remains too small. He thinks an REIT needs to have at least VND500 billion.


NCDT