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Sunday, September 13, 2009

Vietnam projects set to take off

An artist’s impression of Gamuda Land’s Yen So Park project in Hanoi.

Malaysian developers with property projects overseas, especially in Vietnam, are getting ready to proceed with their project launches after an almost year-long delay brought on by the global financial crisis.

Vietnam has attracted one of the largest Malaysian participation. Local developers with projects there include SP Setia Bhd, Gamuda Land Sdn Bhd and Berjaya Land Bhd.

Tan Sri Liew Kee Sin … ‘The fundamentals of the supplydemand dynamics for Vietnam’s property market remain intact.’

According to SP Setia Bhd president and chief executive officer Tan Sri Liew Kee Sin, the market is seeing a rebound in terms of property demand as sentiments improve and the Vietnamese begin switching out of more conservative asset classes like gold.

“The macroeconomic environment also seems to be more supportive of this, with inflation falling to a seven-year low of 2% and with positive impact on financing rates, although most property buyers in Vietnam do not require bank financing. Limited launches by property developers during the crisis has also helped in terms of limiting supply – resulting in a more favourable supply-demand scenario,” Liew tells StarBizWeek.

Despite the global crisis, he says the fundamentals of the supply-demand dynamics for Vietnam’s property market remain intact.

“Supply of well-planned dwellings are on the low side. On the other hand, the well-known and much spoken about demographics reality of a 86 million strong population with a high youthful proportion will ensure a healthy demand side.

“This is against a backdrop of rising incomes of a generally hardworking and homogenous populace.

Post-crisis, going by our own project and other launches, demand is encouraging. It is interesting to note that even second-home vacation dwellings launched in the last quarter were very well taken-up. This shows the kind of appetite that still prevails in Vietnam,” he adds.

Houses priced below US$100,000 are still in high demand as 70% of the population are below 35 years old and have yet to own a home.

Liew says Vietnam continues to have a shortage of well-planned retail space and strategically located projects of decent size.

“Where applicable, we will have such retail-space offerings in our projects. Both EcoLakes and EcoXanh will offer such retail components,” he notes.

Liew says although the global financial crisis has somewhat delayed the company’s regional expansion plans in Vietnam, “the response to EcoLakes’ first launch has been very encouraging in current market conditions and we hope to ride on the back of the strong sales momentum to resume our projects there.”

Phase 1, called the Garden of Splendor, comprised 257 terraced houses while phase two will have 58 semi-detached houses and villas.

Its first two phases, comprising 257 terraced houses in phase one and 58 semi-detached houses and villas in phase two, have received encouraging response, with 95% and 60% interest respectively. Construction of Phase 1 has already begun and is expected to be completed by the end of next year.

Meanwhile, Berjaya Land Bhd says it has received investment licences for four of its six projects in Vietnam.

Senior general manager for properties and marketing, Mah Siew Wan, says the company is targeting to launch its Bien Hoa project in Ho Chi Minh later next month and Thach Banh New City project in Hanoi by the year end.

Gamuda Land Sdn Bhd managing director Chow Chee Wah says the launch of the residential component of the company’s Yen So Park project on 500 hectares in Hanoi is targeted for the first quarter next year.

The project involves the development of a sewage treatment plant, transformation of an existing park into an international thematic park, and integrated commercial and residential developments. It has an estimated gross development value of RM8bil over a 10-year period.

“Our design, technical and construction works are on schedule. The development of the sewage treatment plant and upgrading works of the park is smoothly moving on. We will be launching our township parcels (links and apartments) in early 2010. By then, we will be in the right time as the economy improves,” Chow says.

He sees a great potential in Vietnam because of its largely untapped property market.

“Vietnam has a population of over 186 million people (this is three times of Malaysia’s population), and it is the 13th most populated country in the world. Of this, more than 30% of the nation’s population is concentrated in Hanoi and Ho Chi Minh.

“The Vietnamese are rapidly upgrading their lifestyle and standards of living. The demand for nice housing surpasses the present supply. Hence, there is a ready market for us to draw on and it is an excellent chance for us to introduce resort lifestyle living which Gamuda Land is renowned for,” he says.

By The Star (by Angie Ng)

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