Japanese capital injected into real estate

Japanese capital injected into real estate

Are Japanese too slow to march towards the Vietnamese real estate market? The current merger & acquisition (M&A) wave indicates the answer is ‘no’.

Japanese arrive in time

Japanese are believed to be the ‘newcomers’ in the Vietnamese real estate market. They have turned up in Vietnam in recent years, while investors from South Korea, Taiwan and Malaysia have been present here for many years.

A Vietnamese real estate expert noted it is true that Japanese investors are more ‘slow paced’ than Singaporean, South Korean or Hong Kong’s real estate developers. And because of this, Japanese face a great challenge because they find it more difficult to find advantageous positions for their projects.

He also noted that Japanese should have come earlier when the real estate prices plunged to the deepest low. If they had come at that time, they would have been able to buy projects at ‘very reasonable costs’.

Meanwhile, the real estate market has warmed up, which means they have to pay higher prices.

However, the expert thinks there are still opportunities for Japanese.

He noted that the prevailing M&A wave will bring great opportunities to Japanese investors.

Just after pouring VND600 billion into City Gate Towers project developed by Vietnamese Nam Bay Bay Company, Creed Group, a Japanese investment fund specializing in investment in real estate, successfully landed in the Vietnamese market.

The investor has also signed memorandums of understanding on the development of two Nam Bay Bay’s projects - NBB Garden II and NBB Garden III – to which it will contribute 50 percent of capital.

According to Creed Group, though real estate prices in Vietnam have increased again after a long period of stagnancy, the real estate is still undervalued compared with Vietnam’s potential in population and industrialization.

Haseco, another Japanese real estate development firm, has teamed up with Vietnamese Him Lam Group to develop a housing project in Hanoi.

This is Haseco’s first outward investment project since 1988. The Japanese firm would hold a 98 percent stake in the new joint venture.

The project to be developed by the joint venture is five kilometers from Hanoi. It is expected to be completed by 2017 when 100 apartments would be ready for lease.

Haseco has said that it would join forces with other Vietnamese partners to develop other projects to implement the plan to hold 10 percent of the apartment housing market share in Vietnam.

vietnamnet