Korean chaebols snatch Vietnam’s biggest real estate projects
Korean chaebols snatch Vietnam’s biggest real estate projects
Two mammoth real estate projects were transferred to South Korean investors in 2013. Analysts comment that South Koreans have been, step by step, acquiring all the big projects in Vietnam.
The millions-of-dollar affair
The information that the A-class Gemadept Tower in district 1 in HCM City was sold to CJ Group and its subsidiaries was only released on the last days of 2013.
Securities firms believed that the building is valued at VND930 billion.
CJ, in Vietnam, has been well known as the investor in the home shopping sector, the developer of Tour Les Jour bakery chain in HCM City and food shops. It has become more famous after the $70 million deal of purchasing 80 percent of stakes in Megastar Media JSC.
Sources from well informed circle said CJ would set up its headquarter at Gemadept Tower, while the other parts would be for leasing.
Another South Korean chaebol, Lotte, has also poured big money into Vietnam. In April 2013, Lottel Hotels & Resorts, a subsidiary of Lotte, bought 70 percent of Legend Hotel’s stakes to become the new owner of the five star hotel.
The commercial affair has paved the way for Lotte Hotel & Resorts to go further into the Vietnamese resort real estate market. What the group has been doing showed that Vietnam, together with China, is one of its key markets.
Lotte’s business plan would be as follows: It would put the 5-star Vietnam Hanoi Lotte Center into operation in 2014. Meanwhile, a complex in South Korea – Lotte World Tower, would be completed, and the 5-star complex of shopping mall, office building, and apartments worth $400 million would be inaugurated in Shenyang, China.
Vietnam still very attractive
Dr. Su Ngoc Khuong, the Investment Director of Savills Vietnam, commented that the Vietnamese real estate market seems to be quieter recently, but this does not mean that the market has become no longer attractive. Especially, Khuong has noted a very big attention from South Korean investors to Vietnam.
This explained why the workshop organized by Savills in November 2013 in Seoul themed “Why to invest in Vietnam now?” attracted more than 110 finance institutional investors.
Neil MacGregor, Managing Director of Savills Vietnam, noted that South Korean investors mostly eye the real estate projects with stable cash flow, such as office buildings, apartments and hotels.
Cao Thanh Hoang, Managing Director of KHM Capital, an investment fund management company, which is managing $20 million worth of capital in Vietnam, thinks that South Korean have always bee appreciating the Vietnamese real estate market. They just tend to take more cautious steps in making investments.
Hoang noted that nowadays, South Koreans tend to cooperate with domestic enterprises to develop projects rather than making foreign direct investment in the real estate sector. The domestic partners are generally more professional in dealing with the difficulties in the site clearance.
Hoang revealed that he knows a big South Korean investor moving ahead with necessary legal procedures to invest in a complex worth billions of dollars in Hanoi.
According to South Korean Eximbank, Vietnam is the second biggest outward investment market for South Korean investors in Asia. In the real estate sector, Vietnam, together with Cambodia and China, are the three biggest markets.
vietnamnet
