Vietnam to have more real estate investment funds
Vietnam to have more real estate investment funds
Competition is going to heat up among real estate investment funds as Vietnamese developers consider establishing funds to call for capital from small investors.
As the State Bank of Vietnam plans to tighten credit for the real estate sector, Vietnamese developers have started to think of alternative ways to mobilise capital for their projects.
One of the ways is to call on small investors through funds. As of now, there are only foreign real estate funds in Vietnam, such as VinaLand, Indochina Land Holding, Vietnam Opportunity Fund, Vietnam Property Fund and Vietnam Property Holding. There has yet to be a truly Vietnamese real estate fund.
Nguyen Tran Nam, chairman of the Vietnam Real Estate Association, said that developer Hoang Quan Group was working on a project named ‘Vietnam real estate investment fund’, and that many developers have shown interest in joining. The project is expected to be the flagship of more such funds, making it easier for developers to mobilise capital.
Hoang Van Cuong, vice president of National Economics University, said that funds had to have prestige to be able to call for capital from individual investors.
Another alternative is to list the project on the stock market. Dang Hung Vo, former Deputy Minister of National Resources and Environment, said that in the future this model is going to replace the nowadays common practice of direct investment between developers and buyers.
No developer has attempted to set up a fund like this yet in Vietnam, though the legal framework allows it. Companies are only waiting for relevant government agencies to state the requirements for the projects to be listed.
