Foreign investors pledged to invest $1.5 billion in real estate projects in Ho Chi Minh City, Vietnam’s leading economic engine, in 2015, the largest value over the past five years, according to a report by the city.
Empire City, a joint venture among two Vietnamese partners and the UK’s Denver Power Ltd under Gaw Capital Partners, in October kicked off the construction of a $1.2-billion complex on an area of 14.5 hectares in the Thu Thiem New Urban Area.
Coupled with foreign direct investment (FDI), capital flows to the city’s real estate market have also come from investment funds.
Ibeworth Pte. Ltd, a wholly-owned subsidiary of Singapore’s Keppel Land Limited, bought 7.1 million shares of Nam Long Investment Corp (NLG), a developer of affordable housing, for 140 billion dong ($6.22 million).
Genesis Global Capital in November cut a deal with Phuc Khang Corp, under which the Singaporean fund will pump up to $300 million in six installments to acquire stakes in the latter’s projects and jointly build international-standard apartments.
Meanwhile, Japan’s Creed Group in July pledged to invest $200 million in An Gia Investment to buy a 20% stake in the Vietnamese real estate company. The former will provide 50% of the capital for An Gia’s project, providing “Japanese quality” housing services in Ho Chi Minh City.
Inbound remittances have flown to estates, with an estimated amount of $1.03 billion, or 21.6% of total remittances to the city, in the 11 months through November.
Foreign investment in this sector is expected to increase as Vietnam has loosened conditions on foreign ownership of housing and the country has signed free trade accords with a wide array of economies.
FDI in property projects in Vietnam reached $2.39 billion this year, accounting for 10.5% of the total FDI flow, according to data of the Foreign Investment Agency under the Ministry of Planning and Investment.