Asian developers turn their backs on once-hot property sector
Asian developers turn their backs on once-hot property sector
Several years ago, more South Korean and Japanese investors arrived in Vietnam, ready to pour more money into property projects.
Analysts at the time predicted that many construction works in the country would “bear the South Korean stamp”, that is, a certain style.
Lotte Center, the 65-storey building on Lieu Giai Street, one of the most beautiful streets in Hanoi, opened on September 2, marking a new development period for the company, a well-known South Korean real estate group.
It is the second tallest building in Hanoi, and includes a shopping mall, hotel, A-grade offices (45,000 square meters), 258 apartments and an observatory.
Lotte was one of the Asian investors who could see the great potential of the Vietnamese market. Five years ago, Lotte bought Lotte Center Hanoi project from Korean company Daewoo.
Keangnam, another large company in South Korea, now has the tallest tower in Vietnam after spending $1.05 billion and working 50 months with 3,500 workers and 100 contractors to complete the project.
Hyundai and Ypung, the other two big players in the market, are also from South Korea.
In 2012, Tokyu, an investor from Japan, stirred up the public when it decided to spend $1.2 billion for Tokyu Binh Duong, a 71.5 hectare new urban area.
Tokyu Binh Duong is expected to have 7,500 apartments and houses, entertainment complexes, shopping malls and offices.
Another huge project developed by the Japanese is an industrial zone for enterprises in supporting industries – Hanssip – by Shimizu. The $1 billion project kicked off in March 2012.
The failures
While some investors have profited, many others have left after realizing that they had not gained what they expected.
Booyoung Vina, an apartment project in Mo Lao urban area in Ha Dong District in Hanoi, has been idle over many years. Booyong, the South Korean investor of the $171 million project, though having been repeatedly urged by the Hanoi People’s Committee, cannot move ahead.
Meanwhile, Grand Plaza, a hotel-office-shopping mall complex, developed by Chamvit from South Korea, has been closed for restructuring. It is still questionable when it will open again.
In the south, GSCD, a subsidiary of GS Engineering & Construction Corporation, had to sell its project to a domestic company for $24 million.
The $2.57 billion Spendora project has fallen into dilemma as the domestic partner in the joint venture has quit the project.
Bright future for Asian investors
Though many investors have left Vietnam, analysts believe that Vietnam is still attractive.
Neil MacGregor, a senior executive of Savills Vietnam, a real estate estate consultancy firm, noted that when Vietnam was at the bottom of the growth period, the other Asian markets were at the peak. However, the markets will be cooling down, which will allow Vietnam to attract more investors in its recovery period.
vietnamnet
