CAMCE eyes bright future for Lao real estate
The outlook for the real estate market in Laos is bright and CAMCE Investment Lao Co Ltd has certainly made the right decision to embark on one of the largest real estate projects in the country.
The Lao-Chinese joint venture officially launched the concept plan for their urban development project on the Don Chan riverfront (known as Vientiane New World) in Vientiane on May 21.
At the launch ceremony, the company's management said they would invest more than US$600 million to build the three phases of the project over a period of six to eight years. The main features are luxury residences, apartments, a business centre, and shopping and entertainment centres.
CAMCE is currently building the first phase of the project, which comprises 50 high class villas to be used by the Lao government to house heads of state and government attending the 9th Asia-Europe Meeting Summit in November.
The company plans to kick off construction of the second and third phases in the near future and hopes to complete the entire project in 2020.
Despite recording the highest economic growth rate in the region over the past five years, Laos has a shortage of high quality residences, business facilities and entertainment centres to meet the changing needs of development and strong economic growth over the next five years.
Over the past five years, Laos has maintained an economic growth rate above 7.5 percent. The government plans to maintain this rate at a minimum of 8 percent over the next five years, with mining and hydropower as the main drivers of growth.
“We hired several consultants to conduct feasibility studies. We finally learnt that this was a great investment opportunity,” CAMCE Investment Lao Managing Director Mr Yao said during an exclusive interview with Vientiane Times .
One local rental property company says the demand for homes and other accommodation in Laos has increased rapidly over the past five years since the government offered more investment opportunities for both local and foreign businesses.
Many people have built houses and apartments for rent and sale. They believe the government will continue to ease restrictions on foreign investment, which is crucial to increasing the inflow of foreign businesses and will lead to a surge in demand for accommodation and office space.
The rental company says there are about 50,000 foreigners working and living in Laos and these people need better residences and offices.
Now that Laos has acquired the nine votes from WTO member countries needed to join the trading body, it expects to be accepted as a member at the end of this year. Laos is also improving laws and regulations towards integration into the Asean Economic Community in 2015.
International integration will help Laos to attract more foreign investment, which will play a significant role in boosting GDP growth.
As part of efforts to attract foreign investment, the Lao government has amended the Investment Promotion Law, to allow foreigners who invest US$500,000 to buy land use rights from the government for a site measuring 800 square metres.
In the past, investors were unable to own land use rights, which made it difficult for them to find a permanent location for offices and residential accommodation.
Mr Yao said he believed a large number of overseas tourists will visit Laos in the future and that compared to other Southeast Asian countries, Laos has a lot of potential in tourism.
With its rapid economic progress and the development of transport, enormous growth can be expected.
Mr Yao said CAMCE saw a promising future in Laos' real estate market and he believed it would prove to be a good investment.
Centrally located among the Mekong countries, Laos is transforming itself from a landlocked nation into a land bridge within the region. Thailand has built a railway to Vientiane and plans to extend the track into the city centre, believing there is a strong future for logistics in Laos.
China and Laos also plan to build a high speed railway as part of the Asean-China rail network. Construction of the railway will make Laos a top business centre. Many economists and business operators say there is a bright future in store for Laos because of its shared border with China, which is one of the world's largest and fastest growing economies.
One government leader said that people who plan to trade with China should come to Laos because of the good investment environment to be found here.