Developers take a chance on depressed assets
Developers take a chance on depressed assets
Homebuyers in the Usilk City development are still waiting to move into their properties years after the supposed completion deadline as developers Song Da Thang Long ran out of funds.
Opposite, the Duong Noi New Urban Area developed by Nam Cuong Group also remains abandoned at the foundation stage.
However Pham Thanh Hung, chairman of Cen Invest and his partners claim they now have the finances to restart these long-abandoned developments.
Hung and his partners have signed a deal with Nam Cuong Group to take over the three buildings in the Duong Noi New Urban Area which includes 630 apartments. Cen Invest has poured around VND250 billion ($11.9 million) into the project.
“These delayed projects are an inevitable consequence of an over-heated property market. Several of these mothballed developments are just waiting for finance to restart,” Hung said.
“The real estate market has really recovered and now it’ll be about those developers who have vision,” Hung said.
Hung claimed that the sale of more than 10,000 apartment units in the capital last year was a good indicator for the real estate market, but warned that if the current rate of sales continued the city would face a shortfall in available properties.
The Cen Group also operates the STDA real estate transaction floor, and last year STDA sold more than 3,100 apartments in Hanoi alone in a range of projects like Vinhomes Nguyen Chi Thanh, Mipec Tower, Dolphin Plaza, HP Landmark Tower.
Figures from CBRE Vietnam show that there was a 50 per cent increase in apartments sold in the capital compared to 2013.
“The positive results in the apartment segment have encouraged investors to pour capital into property. In our newly taken over project, we will focus on reasonable scale units at VND19 to 21 million ($904 to $1,000) per square metre,” Hung said.
Hung’s positive outlook has been shared by other developers such as Vingroup, Novaland and TNR Holdings.
Doan Van Binh, chairman of the CEO Group said however, that opportunities will not be available for all people and all segments.
Binh said that while apartments for sale were booming, other segments such as office for lease and retail were still facing challenges.
“Moreover despite the apartment for sale segment seeing positive signs, the west of Hanoi is facing oversupply, so we’re holding off on our plans at the moment,” Binh said.
CEO Group however has decided to invest VND1,000 billion ($47.6 million) into the construction of infrastructure into the already under construction Sunny Garden City in Hanoi, Riversilk City in Ha Nam and Novotel Phu Quoc hotel.
CEO is currently constructing Novotel Phu Quoc with 400 rooms and 44 villas for lease, with the project expected to be finished within 2015.
“I want to focus on Novotel Phu Quoc, rather than other projects, because we see very bright prospects for the island in the coming time. The island’s infrastructure has recently been upgraded with a new airport and tourism growth has been good. Phu Quoc now has the highest hotel room rates in the country,” Binh said.
“However the opportunity won’t be around for ever. People are keen to get into the island and we’re making our move now,” Binh said.
