New policy boosts real estate investment
Real estate development has gained a major boost after the government allowed foreign investment in the sector.
The number of commercial buildings in Vientiane and the major cities of Luang Prabang, Savannakhet and Champassak have witnessed rapid growth over recent years. Much of the construction has been for commercial purposes such as retail space and offices but residential building is also growing to meet market demand thanks to the inflow of foreign investment.
A major real estate investment project underway in the capital is the Vientiane New World Project in Chanthabouly district. CAMCE Investment (Lao) Co., LTD, a joint venture between the Chinese state-owned enterprise CAMCE Engineering and Lao Krittaphong Group are investing US$800 million to transform the Mekong riverfront into a new shopping paradise.
The project developer is gearing up its advertising to sell spaces for traders who want to open shops, restaurants and other commercial activities at the shopping centre, which is expected to complete over the next few years.
Another big project in Vientiane is the construction of condos and infrastructure such as roads and drainage at That Luang Marsh Specific Economic Zone in Vientiane. The Chinese developer plans to spend US$100 million to transform the site.
The project developers expect to sell the residences to local and foreign investors who are attracted to the economic zone. A number of investors, particularly those from Thailand, have expressed interest to invest in the zone, which will include commercial areas and tourist sites.
There are also a number of other real estate developments in Vientiane, which are in the preparation stages such as construction of the residential area at Nongtha marsh.
According to officials from the Ministry of Planning and Investment, the government has in place a new investment promotion law, which allows foreign investors to invest in real estate in the country after learning there was huge demand for commercial buildings and shopping centres.
Investment Promotion Department's Legal Division Chief, Ms Thavichanh Thiengthepvongsa recently said one of the main features of the latest revised Investment Promotion Law was designed to encourage foreign investors to put money into the real estate sector.
Under the government policy foreign investors are allowed to own apartments, shops, offices and even houses but not the land they sit upon.
Rentsbuy.com property company Managing Director, Mr Houmphan Sayalath told Vientiane Times recently that the housing market in Vientiane was booming thanks to the government policy to boost investment in the sector.
He also said the establishment of the Asean Economic Community in 2015 would see an influx of foreign investment and labour, which would increase demand for accommodation in Laos, particularly Vientiane.
The price of land in Vientiane has seen big increases over the past few years due to growing demand for office space and house construction. Land in the city centre of Vientiane is around US$2,000 per one square metre, according to real estate firms.