China’s billion-dollar real estate projects plan in Vietnam

The wave of Chinese investors’ real estate investments to Vietnamese market has spread widely across all segments, from housing, rental office, industry area to tourism real estate projects which are mostly located in the prime positions next to airports, seaports and golden lands in the south.

In the middle of April 2017, China Fortune Land Development Co., Ltd. (CFLD), a publicly traded Chinese real estate developer, purchased a US$65.3 million stake in 198.5 million hectare Dai Phuoc Lotus project in Dong Nai province of VinaCapital, a Vietnamese real estate development firm.

The project is adjacent to district 2 and district 9 of Ho Chi Minh City with important traffic routes such as National Highway 51A connecting National Highway 1 with Vung Tau city, Long Thanh - Dau Giay and Ben Luc - Long Thanh expressways connecting Long Thanh airport in the future.

According to the CFLD Vietnam Real Estate Development Co., Ltd. (CFLD Vietnam), in the corporation’s development strategy, it would develop dozen of industrial cities which are mostly located in ASEAN, especially Vietnam.

CFLD has worked with the People’s committee of Dong Nai province since January 2016 to seek for investment opportunities. At that time, Indonesia was the corporation’s first foreign destination. In September 2016, CFLD and Tin Nghia Company Limited, 50 per cent charter capital of which belonged to the provincial office of Dong Nai, signed the Memorydeom of Understanding to develop the New Industry City (NIC) and Ong Keo industrial park. These two projects are adjacent to the Long Thanh international airport which is expected to be constructed in the future.

Besides, Hongkong Land Holdings Limited (Hongkong Land), a property investment, management, and development company in Hongkong possesses a 64 per cent stake in the housing projects in Tu Thiem new urban area of Hochiminh City Infrastructure Investment Joint Stock Company (CII). The 657ha area which is opposite to district 1 of Ho Chi Minh City is located on the east bank of Sai Gon river.

Hongkong Land currently has the capital contribution rate of over 50 per cent in three domestic projects and enterprises including the Central Building, Doan Ket International Company Limited and Nassim Jv Company Limited, investor of The Nassim Thao Dien high-end residential project.

Hongkong Land has come back to Vietnam since 2015 with its collaboration with Son Kim Land to develop the Nassim high-end project in district 2 of Ho Chi Minh city.

However, in the beginning of 2015, Hongkong Land and Sumitomo Realty & Development Co., Ltd were infamous for returning the golden land plots at 164 Dong Khoi street due to the lack of capacity to conduct the project in the midst of the 2008-2009 market downturn.

Alpha King Real Estate Development JSC, a company established in Vietnam but belonging to a Chinese, is believed to buy the monolithic Saigon One Tower project which has been suspended since 2011 of Saigon M&C. The main shareholders of this companies are Alpha King Investment Limited, a Hongkong-based company holding a 93.3 per cent stake, and two Chinese people holding the equal stakes of 3.3 per cent.

The project which is an apartment, office and commercial complex with the highlight of Vietnam's largest outdoor bar is expected to be reconstructed and completed by 2018.

However, the View-Based Access Control Model (VACM) has documented the seizure of the monolithic Saigon One Tower project as the security property for the purpose of processing and recovering the debt.

Another project having the involvement of Chinese investors is the US$4 billion Hoi An casino resort project which had been suspended until 2016 due to the obstacles in finding investment partners. This project developed by VinaCapital, Chow Tai Fook Jewellery Group Limited of Hongkong and The Suncity Group of Macau in 2015 is located near Da Nang international airport, Hoi An Ancient Town and My Son Sanctuary as well as The Cu Lao Cham-Hoi An Biosphere Reserve.

The Chinese government has begun to tighten the investment rules to avoid the risk of the property bubble bursting after a prolonged development period; therefore, Chinese investors are finding investment opportunities in other nations and Vietnam is not an exception.