Source : Weekend TODAY, August 11, 2007
WITH a growing middle class, Vietnam is increasingly luring investors. And two Singapore developers have announced building projects this week.
CapitaLand said on Friday that it plans to build upmarket homes in Ho Chi Minh City —its third residential project there. Also, Vita Holdings is planning a 5-star hotel in the Vietnamese capital.
“Vietnam has seen its GDP grow by close to 8 per cent in the first half of this year, the highest in five years,” said Mr Lui Chong Chee, CEO of CapitaLand Residential.
“The strong growth has translated into an increased demand for luxury homes among the affluent local professionals and rising number of expatriates in the country,” he added.
CapitaLand has around 1,600 homes in Ho Chi Minh City in the pipeline. It is targeting the niche expatriate and highnet-worth Vietnamese segment by developing a gated community that includes shared recreational facilities and 24-hour security services.
Through its subsidiary CapitaLand (Vietnam) Holdings, CapitaLand will take a 75-per-cent stake in the joint venture for US$31.5 million ($48 million). Vietnamese company Azure City Co Ltd, an infrastructure and property developer, will hold the remaining stake of 25 per cent.
The venture includes 300 villas on the 11.7-hectare site and is expected to launch by the third quarter of next year.
Residential properties aside, the country is also facing a shortage in upmarket hotels. Vita will develop a US$41.5-million, 5-star hotel in the country, through a 65-percent stake in a joint venture with Dai Viet Trading Co.
The Singapore Exchange-listed diversified group with interests in property leasing and management, shipping, and coal trading is expected to invest US$17 million in the project while Dai Viet Trading will contribute the land lease.
According to an industry observer, “it is a good time to enter the Vietnamese market. With the potential gains they can make, it represents good value for the long term player”.
Mr Nicholas Mak, Knight Frank’s director of consultancy and research, said, “The country’s entry into the WTO (World Trade Organization) will also see an increase in trade and business. That means more foreigners will come and they will need accommodations.”
Mr Mak added: “The Vietnamese people will get wealthier and their standards of living will increase.”
According to Standard Chartered Bank, foreign direct investments into Vietnam could hit US$10 billion by the end of the year.
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