The draft law on special administrative-economic zones is expected to bring opportunities to the real estate market when it comes to effect.
TheLEADER had a talk with Tran Dao Duc, Deputy General Manager of CEO Group, which is covering two main areas including real estate and education and training, on this issue.
How will the draft law on special administrative-economic zones influence the real estate market?
Tran Dao Duc: CEO Group is one of the real estate enterprises having an interest in the draft law and wishing it to come into effect as it offers opener policies, which will help attract more investments.
Currently, special administrative-economic zones are mostly located in prime positions nearby the seaports and maritime routes, which help create the domestic and international connectivity as well as the development opportunities.
The special administrative-economic zones will not only develop but also create a diffuse effect in the real estate market throughout the country. The formation of this draft law is expected to bring about a positive effect on the real estate market in particular and Vietnam’s economy in general.
The draft law offers foreigners the 99-year leaseholds on properties in Vietnam. What is your opinion about this?
Tran Dao Duc: I think this will help attract more foreign investors. Even though there may be interest conflicts between domestic and foreign enterprises, the former can draw precious leadership experiences and capital inflows.
I am confident that the principles of the Land Law, Investment Law, Housing law and the Law on Real Estate Business in the new draft law will ensure the management over foreign investors in Vietnam and help us avoid the potential risks like foreign enterprises dodging the laws, creating obstacles for domestic firms.
I think that foreign enterprises come to Vietnam to seek for a good market to invest and I believe that Vietnam will create a fair playground to promote the foreigner resources including capital flows and experiences.
What are the requirements for developing countries like Vietnam to both attract foreign investors and ensure the development of domestic firms?
Tran Dao Duc: Phuket in Thailand and Bali in Indonesia have policies in developing tourism and attracting foreign investors that Vietnam does not have.
Novotel Phu Quoc resort depicted above
Firstly, they make the most of their geographic location, culture to attract management experience and the investment capital flows of foreign investors. They built amusement parks, also known as the geese that lay golden eggs, especially for the development of tourism.
The tourism industry in Vietnam has gained a lot of achievements thanks to the government's special attention. However, it will produce a better result if we can draw and utilize the foreign investments in terms of capital and management capability, starting from such special administrative-economic zones as Phu Quoc, Van Don, and Van Phong.
Do you think that there would be a phenomenon in the real estate market when the draft law is passed?
Tran Dao Duc: When the draft law is passed, many effects will be created. Firstly, foreign investors can be more confident in their investment. CEO Group has prepared for this for a long time. We have invested in places that will soon become the special administrative-economic zones like Phu Quoc.
Currently, CEO Group is one of the three biggest investors in Phu Quoc. We have been very active in implementing projects that have contributed to Phu Quoc's recent change with a relatively good tourism infrastructure.
In the upcoming time, we will invest in the SonaSea Dragon Bay tourism complex in Van Don and turn it into a world-class resort. With the desire to have new open and attractive policies, investors in general and the CEO Group, in particular, will continue working for the sake of sustainable development. We will invest more in the world-class resorts in these special administrative-economic zones, hoping to create the geese that lay golden eggs for Vietnam.
What do Vietnam’s leading real estate enterprises have to prepare to respond to the huge wave of foreign investments?
Tran Dao Duc: We have anticipated and prepared for the international competition. As a domestic investor, we confidently understand the strengths and weaknesses of the Vietnam market.
After two years operating the Novotel Phu Quoc Resort, the domestic tourists account for 70-80 per cent of our customers. We are confident that by having experiences and understanding customer psychology, we are now ready to fairly compete with foreign rivals with high possibility of success.
What are the obstacles that real estate enterprises are facing?
Tran Dao Duc: The biggest obstacle is the lack of a clear policy on the ownership, selling and buying, and renting of resort real estates. For instance, despite having no clear policy on property ownership of resort real estates, many 50-70 year term projects are still approved, making secondary investors hesitate over their investments. This is one of the difficulties that the resort real estate companies are facing.
Thank you so much!
