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Property

Real estate catches eye of Japanese investors

Released at: 11:30, 04/10/2016

Real estate catches eye of Japanese investors

Photo: Duc Anh

Many Japanese investors keen on Vietnam's real estate sector in recent times.

by Quynh Nguyen

Japan’s Meade Group, the contractor of the Ho Chi Minh City Urban Railway’s Ben Thanh - Suoi Tien stretch, plans to invest in a high-end real estate project called Wateria Suites in Ho Chi Minh City's District 2.

The information was revealed in CBRE’s Quarter 3 real estate market report, where it noted that the Meade Group has worked with CBRE to research Vietnam’s real estate market.  

The Wateria Suites project has investment of $30 million on an area of 2,000 sq m with 89 apartments of 150-200 sq m overlooking the river.  

Vietnam’s real estate market has recently witnessed an investment wave from Japanese investors. Indochina Capital signed an agreement on September 16 to establish a new joint venture with Kajima Corporation, a major Japanese construction and real estate development company with a global presence in key markets around the world.

Indochina Kajima Development Ltd. (ICC - Kajima) aims to build on the success and impressive track records of the two companies, developing quality and innovative real estate projects throughout Vietnam.

The Mitsubishi Corporation and the Bitexco Group established a joint venture in July to develop a residential real estate project in Hanoi’s Hoang Mai district, 8 km southwest of the city center and part of The Manor Central Park, a large-scale mixed-use development.

Mitsubishi will hold 45 per cent of the joint venture and Bitexco 55 per cent, with total investment estimated at 30 billion Japanese Yen ($290 million) in the first phase. During this first phase the joint venture will develop 240 low-rise housing units and two high-rise apartment blocks comprising 1,036 apartments.

Mitsubishi’s real estate subsidiaries have also cooperated with South Korea’s Lotte Group to build Eco Smart City in the Thu Thiem Urban Area in Ho Chi Minh City’s District 2.

Lotte has committed to invest in $2.2 billion in the project, which covers 16.71 ha and includes a trade center, a hotel, apartments and, in particular, a 50-storey office block. Construction is expected to begin in early 2017.

According to Mr. Stephen Wyatt, CEO of JLL Vietnam, foreign investors hold a steady position in Vietnam’s real estate market and many are researching further opportunities with JLL.

In the first nine months of this year investment from Japan reached a total of $1.7 billion with 236 new projects and 159 projects adding capital, ranking it second among Vietnam’s foreign investment sources.

Being party to the TPP is considered an advantage for Vietnam by Japanese investors.

In a survey conducted by the Mizuho Research Institute on 1,100 businesses on their plans to expand investments in the 12 TPP signatories, 12.8 per cent of those surveyed chose Vietnam, 10.7 per cent Japan, and 4.9 per cent the US.

Another survey conducted by the Japan External Trade Organization (JETRO) early this year showed that more than 60 per cent of Japanese businesses operating in Vietnam plan to expand their investment and consider Vietnam an important investment destination.

Japanese businesses cited low labor costs, social and political stability, a good investment environment and growth capacity as the country’s advantages.

It also revealed that Japanese businesses put high hopes on the establishment of the ASEAN Economic Community (AEC), with simplified customs procedures, tariff removals and unity in certificates of origin (C/O).

JETRO conducted the survey on 1,027 Japanese businesses, 364 of which invested in manufacturing and 193 in non-manufacturing industries and services in Vietnam.

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