Vietnam Investment Report Q4 2015 (EN)

vietnam quarterly investment report
q4 2015

Table of Contents Page
EXECUTIVE SUMMARY.........................................................................................................................
ECONOMIC OVERVIEW..........................................................................................................................
KEY ECONOMIC INDICATORS.................................................................................................................
MONETARY INDICATORS........................................................................................................................
EXTERNAL INDICATORS.........................................................................................................................
LEGAL UPDATES.....................................................................................................................................
INVESTMENT HIGHLIGHTS - NEWS COVERAGE...................................................................
LIST OF FIGURES
Figure 1 Vietnam GDP.............................................................................................................................
Figure 2 Vietnam Consumer Price Index ................................................................................................
Figure 3 Interest rate and Exchage rate in Vietnam.................................................................................
Figure 4 Outstanding debt of real estate.................................................................................................
Figure 5 Government bond yield ............................................................................................................
Figure 6 Foreign Direct Investment ........................................................................................................
Figure 7 Exports and Imports in Vietnam ...............................................................................................
Figure 8 Index Performance of Vietnam .................................................................................................
Figure 9 Bad debt in Vietnam .................................................................................................................
Figure 10 International tourist arrivals to Vietnam...................................................................................
LIST OF TABLES
Table 1 Vietnam Retail Sales....................................................................................................................
Table 2 Macroeconomic Indicators..........................................................................................................
COVER PAGE: A&B Tower, District 1, Ho Chi Minh City
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EXECUTIVE SUMMARY
It is forecasted by HSBC that Vietnam’s exports will grow by an average 10.1% annually
from 2015 to 2030. FDI inflows have been very strong in recent years, helping Vietnam
diversify its export base and gradually move into higher value sectors, most notably
Information and Communication Technology (ICT) equipment. The sizable, young,
growing and increasingly skilled workforce continues to attract manufacturers of low
cost items and Vietnam is becoming increasing integrated into global trade. The Free
Trade Agreements with Korea, EU and Trans-Pacific Partnership agreement (TPP)
should provide impetus towards reform, most notably liberalizing some key protected
sectors such as retail, banking, agriculture, etc. The government enacted Decree 60/
ND-CP 1 July 2015 to remove the 49% cap on foreign ownership in many sectors (though
some key ones such as banking are still excluded).
The trade balance has been in surplus. Risks remain quite high though, particularly while
the outlook for global markets and trade is fragile. In particular, strong domestic demand
may create inflation pressures, putting pressure on the interest rate.
Vietnam’s strong points:
• Positive economic prospects in terms of growth, despite the global economic crisis;
• A young, low cost, rapidly growing and an increasing technologically qualified
workforce;
• Social and political stability;
• A firm commitment to liberalize the economy and to introduce reforms based on the
free market.
Vietnam’s weak points:
• Weak financial and institutional structures. Although being undergoing reforms,
the financial sector is neither well regulated nor independent of the government;
and unequal allocation of resources between State-Owned Enterprises (SOEs) and
private sectors.
• The lack of guarantees for property rights;
• Transparency issues
Foreign investment is subject to an array of unclear regulations, which cannot be legally
guaranteed. The judiciary is subject to political influence, and commercial cases often take
years to be resolved. Despite this, the promotion of foreign investment is a large part of
the country’s developmental strategy. Therefore, the government is continually improving
its judicial system, creating more incentives and taxation policies for foreign investors
and trying to respect its commitments with regard to the international community.
©2016 Colliers International Research Page 3
Trans Pacific Partnership map

Q4 2015 | ECONOMIC OVERVIEW
©2016 Colliers International Research
VIETNAM QUARTERLY INVESTMENT REPORT
Page 4
Figure 1: Vietnam GDP
Source: World Bank | Colliers International Research
Source: GSO | Colliers International Research
Total Proportion
Retail sales 2,245,502 76.2%
Accommodation and catering 337,767 11.5%
Travelling service 27,780 0.9%
Other services 335,093 11.4%
KEY ECONOMIC INDICATORS
Table 1: Vietnam Retail Sales
GDP
After Vietnam started its transition into a market economy in
1986, a process called “Doi Moi”, economic growth has averaged
6.7% a year up to 2011. Due to the global financial crisis and
inefficient allocation of resources to State-owned Enterprises
(SOEs), Vietnam suffered a period of economic downturn and high
inflation from 2011 to 2014. GDP in this period experienced the
lowest growth rate, especially in 2012 at 5.25%. Q4 2015, Vietnam
GDP grew 7.01%, which accelerate to 6.68% in 2015, the fastest
growth rate since 2008. Growth was driven by the industrial and
construction sectors, which contributed nearly half of the total
output. Increases in export-oriented manufacturing output and
continuing high foreign direct investment are providing further
boost to the economy.
The service sector grew by 6.33% this year, industrial and
construction witnessed a growth of 9.64% while agriculture
recorded more modest growth at 2.41%. Data for the first half of
2015 shows domestic demand continuing to serve as the main
driver of growth. Good economic recovery policies have situated
the country as being highly regarded as an attractive destination
for foreign direct investment. With recent progress on major Free
trade agreements, GDP growth forecasts for Viet Nam are expected
to be maintained at 6.7%-6.8% in 2016.
CPI
Consumer price index (CPI) grew by 0.02% in December 2015
over the previous month. In general, CPI 2015 has gone up 0.63%
y-o-y. Core inflation of 2015 grew by 2.05% compared with 2014.
Asian Development Bank (ADB) forecasts that Vietnam’s inflation
will be around 4% in 2016 and HSBC’s predictions for Vietnam are
4.8% in 2016.
Retail Sales
Generally, in 2015, total retail sales of consumer goods and services
were estimated to reach VND3,242.9 trillion (USD144.1 trillion). This
is an increase of 9.5% y-o-y (if changes in price are excluded, the
growth rate would be 8.3%). More specifically, retail sales of goods
reached VND2,469.9 trillion (USD109.8 billion), which accounted for
76.2% of the total retail sales and a rise of 10.6% y-o-y.
Sales of accommodation and catering services gained VND372.2
trillion (USD16.5 trillion), which took 11.5% of the total sales and
grew by 5.2% y-o-y; Travelling achieved VND30.4 trillion (USD1.35
trillion), which represented 0.9% and went up by 9.5% y-o-y;
Remaining services attained 370.3 trillion which accounted for
11.4% and raised by 7% y-o-y.
Figure 2: Vietnam Consumer Price Index
Source: General Statistics Office (GSO) | Colliers International Research
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MONETARY INDICATORS
Interest Rate
In September, the State Bank of Vietnam (SBV) reduced interest
rates on dollar deposits in order to stabilize the Vietnam dong and
discourage hoarding of USD. The interest rate ceiling was reduced
from 0.25% to zero for corporate deposits and from 0.75% to
0.25% for individual deposits.
Exchange Rate
Vietnam’s trade deficit occurring for the first time in three years
and a high government fiscal deficit in 2015 are going to pile more
pressure on Vietnam Dong in 2016.
In addition, the nation’s exchange rate is affected by two external
factors in 2016. Firstly, Fed’s policy of keeping USD stronger would
reduce the demand of holding local currency in Vietnam; secondly,
China‘s slow economic growth could lead the People’s Central
Bank of China to devalue the Yuan further. This, in turn, may lead
the State Bank of Vietnam (SBV) to change the rate USD/VND to
prevent further trade deficit from China.
Credit Growth
Statistics from the SBV shows that at the end of Q3-2015, the
banking system has increased credit to real estate industry 14.5%
more than Q4-2014. Overall, as of 18/12/2015, credit growth of
the whole banking system reached 17.02% y-o-y. This number is
higher than credit growth rate of 14%-15% in the period 2012-2014
but much lower than 37% of 2009, when property prices reached
its peak. Outstanding debts relating to real estate account for about
VND 360,000 billion – an increase of 80% compared to the amount
of VND 197,000 in 2012. According to estimation from Vietnam
Banks Association, about 70% of capital investments in real estate
are backed by bank credit and 65 % of collateral is in the form of
property.
Government Bond Yield
As of 15 October 2015, local currency (LCY) bond yields in
Vietnam fell for most tenors except for 3-year maturity bond. More
specifically, the 1-year bond declined 13 basic points (bps), yields of
2-year and 5-year maturity bonds slightly went down 2 -7 bps while
3-year bond rose 14 bps. Because Fed posponed a hike on interest
rate, investors regained confidence on VND leading to an increase
in bond price. Also, SBV showed firm commitment on keeping VND
exchange rate stable. As a result, yields on 1-year and 2-year bonds
went down. However, expected inflation in future and government
budget deficit went down contributed to the decrease of 3-year
bond price so that yield on 3-year bond were up.
At the end of September, Vietnam’s LCY bond market reached
VND832 trillion (US$37 billion) (the number excludes bonds
issuance through private placements to institutional investors) in
which government bonds (treasury bonds, central bank bonds)
dominate majority of the market, accounting for 98.7% while
corporate bonds accounts for the rest 1.3%. The whole market
has witnessed a decrease of 14.9% y-o-y in value. The treasury
bonds only reached about 50% issuance target for 2015 while most
corporates chose to borrow loans instead of issuing bonds.
In October, the National Assembly approved Government proposals
to raise USD$3 billion government bonds in foreign currency
to refinance the national debt maturing in 2016 and 2017. The
government is also allowed to issue bonds with maturities less than
5 years to fund fiscal shortfall as the demand for long-term bonds
has declined significantly.
Source: Asian Development Bank (ADB) | Colliers International Research
Figure 3: Interest rate and Exchage rate in Vietnam
Figure 4: Oustanding debt of real estate
Source: World Bank | Colliers International Research
10,000
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VND/USD
%perannum
Interst Rate Exchange Rate
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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 3Q
2015
trillionUSD
Figure 5: Government bond yield
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Source: ADB | Colliers International Research

FDI
The country has long been an attractive FDI destination, particularly
for investors from Japan, South Korea, Taiwan and Singapore where
they can borrow at low interest rates. In 2015, FDI attracted 2013
newly licensed projects with the registered capital of US$15.58
billion, an increase of 26.8% in the number of projects and a
decline of 0.4% in the capital from the similar period in 2014. At the
same time, 692 projects from the previous years registered to raise
US$6.67billion investment capital. Thus, the total registered capital
of both newly and additionally financed projects reached US$22.67
billion, grew by 12.5% against the last year’s same period. Realized
FDI capital in 12 months of this year was estimated to gain US$14.5
billion, up 17.4% from 2014’s similar period.
As of end of December, the manufacturing industry attracted
the largest number of FDI projects with the registered capital
of US$15.23 billion, accounting for 66.9% of the total registered
capital while the real estate business attracted US$2.39 billion,
accounting for 10.5%.
Exports - Imports
In 2015, export turnover was estimated to reach US$162.4 billion,
increased by 8.1% from the same period last year, of which the
domestic economic sector achieved US$47.3 billion, decreasing by
3.5%; the FDI sector (excluding crude oil) gained US$111.3 billion,
growing by 18.5%. The United States was the biggest export market
of Vietnam with export turnover of US$33.5 billion, a rise of 17%
compared to 2014’s same period.
Generally, in eleven months of this year, import turnovers reached
an estimate of US$165.6 billion, up 12% over the last year’s similar
period, of which the domestic economic sector gained US$67.6
billion, 6.3% increase; the FDI sector achieved US$98 billion, a
rise of 16.4%. China was still Vietnam’s largest import market
with estimated import turnover of US$49.3billion, a rise of 12.9%
compared to the identical period last year.
Estimated trade deficit was US$3.2 billion, equaling 1.97% of export
turnovers, of which the domestic economic sector had a trade deficit
of US$20.3 billion; the FDI sector had a trade surplus of US$17.1
billion. Only trade deficit with China in 2015 was US$32.3 billion,
sharply increased by 12.5% from the similar period in 2014. With a
decrease in prices of crude oil and some agricultural commodities,
2015’s export turnovers could not achieve the proposed plan (up
10%), but the rate of trade deficit was estimated to reach the
proposed plan at less than 5% of export turnovers.
Exports and imports are calculated at FOB prices (excluding
US$9 billion transport fee and import goods’ insurance which
are included in import of services) then trade baalance in 2015 is
US$5.8 billion surplus. (decreased 44% in 2014)
Page 6
EXTERNAL INDICATORS
Figure 6: Foreign Direct Investment
Figure 7: Exports and Imports in Vietnam
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Exports Imports

Stock Market
VN-Index ended at 579.03 points, equivalent to an increase 6.13%
y-o-y. Hanoi index declined 3.46% to 79.96 points.
As of 31/12/2015, market capitalization estimates at about $58
billion. Average trading volume reached 2,500 billion per trading
day. There are 1.5 million investor accounts which are supported
by 79 securities companies.
Total value of foreigners’ purchase on stock market since the
beginning of 2015 has accumulated to VND 2,929 billion (USD130.2
billion), equivalent to 264 million shares. This is a 15th year that
overseas investors have positive net buying of Vietnamese shares.
The Price/ Earnings ratio of listed companies is at about 11.2
times, versus to 14.3 for the MSCI Southeast Asia Index. Stocks
in Vietnam are relatively cheap in comparison with that of other
nations. For example, P/E of SET index (Thailand) is 16.46 and of
JET index (Indonesia) is 25.95.
Decree 60/ND-CP 1 July 2015 lifted the limitation on companies’
share ownership allowing foreign investors to get more involved
in a process of investment and management of local real estate
assets.
Government bond:
• issued: VND 233,825 billion
• term: 4.94 years in 2014 to 8.68 years in 2015
• average coupon rate: 6.35%/year
Manufacturing Purchasing Manager Index (PMI)
Manufacturing purchasing managers’ Index (PMI) rose back above
the 50.0 neutral-mark, reaching 51.2 from 49.4 in November 2015.
The rate of improvement business conditions is modest. Number
of new orders and new export orders returned to grow. Stock of
finished goods remained unchanged.
Import buying went up the first time in four months in response to
an increase in new business.
Bad Debts
SBV announced that banking system’s bad debt has been lowered to
below 2.9%. Yet, this result somehow contributed by the transfer of
bad debts to a state-owned Vietnam Asset Management Company
(VAMC) as well as the increase of bank credit supply.
As of October 2015, VAMC has exchanged its bonds for VND
226,000 billion of bad debts, yet VAMC has just been able to
deal with 7% of the amount. According to the World Bank, VAMC
process of dealing with bad debts faces difficulties due to a lack of
detailed legal framework for dealing with illiquid assets and transfer
of assets, confiscation of assets and selling asset below their book
value.
International arrivals
Estimated number of international visitors to Vietnam reached
7,934.7 thousand arrivals, down 0.2% from the last year’ same
period, of which visitors coming by airway, increased of 0.8%; by
road: a decline of 6.5%; by sea: an increase of 27.5%.
In this year, visitors to Vietnam from Asia fell by 2.6% against the
similar period last year. Visitors from Europe gained an estimate
of 1,367 thousand arrivals, went down by 1.9% from the last year’s
identical period. Visitors from America reached 647.7 thousand
arrivals, rose 5% from the same period last year.
Page 7
EXTERNAL INDICATORS
Figure 10: International tourist arrivals to Vietnam
Figure 8: Index Performance of Vietnam
Source: Ho Chi Minh Stock Exchange | Colliers International Research
Figure 9: Bad debt in Vietnam
Source: ADB | Colliers International Research
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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
thousandarrivals
International tourist arrivals Average
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Table 2: Macroeconomic Indicators
2012 2013 2014 2015 2016 F Q1 2016 F
KEY ECONOMIC INDICATORS
GDP (%, y-o-y) 5.2 5.4 6.0 6.5
CPI (%, y-o-y) 9.1 6.6 4.1 0.63
Retail sales (trillion VND) 2,324.4 2,618 2,945.2 3,242.9
MONETARY INDICATORS
Interest rate (%) 10.5 7.1 5.8 6.2
Exchange rate (USD/VND) 20,828 20,933 21,148 22.517
EXTERNAL INDICATORS
FDI (billion USD) 16.3 22.35 21.92 22.76
Export (billion USD) 114.5 132.1 150.2 162.4
Import (billion USD) 113.8 131.3 147.8 165.6
Stock market (VN-Index, points) 413 504 545 579
International arrivals (thousand arrivals) 6.85 7.57 7.96 7.94
Source: General Statistics Office, World Bank, Asian Development Bank, Colliers International Research

Q4 2015 | LEGAL UPDATE
Page 9
The major updates focus on the guidance provided in Decree
76/2015/ND-CP (Decree 76) issued in September and Decree
99/2015/ND-CP (Decree 99) in October that provide specific
guidelines for the implementation of Law on Real Estate Business
(LOREB) and Law on Residential Housing (LORH).
Simplified Procedures for Doing Real Estate Business
According to Decree 76, individuals who are engaged in real estate
business at “small scale” are not required to set up entities for the
business. “Small scale” is defined as doing business with properties
owned by such individuals, or developed by such individuals with
the total investment capital less than VND 20 billion (equivalent to
US$ 870,000).
With regard to the establishment of a real estate business, a legal
capital (minimum paid-up capital) of VND 20billion is required,
however, a financial statement or bank acknowledgement certifying
sufficient fund for the legal capital is no longer required as before.
As such, the procedures for registration of the real estate business
therefore are simplified and take less time than before.
Sample Contracts for Real Estate Business Activities
Decree 76 also provides sample contracts for real estate transactions
such as: sale, lease of existing and under-construction properties;
transfer, lease of land use rights; partly or wholly transfer of real
estate development projects. Of note, it is not required that the
parties have to follow exactly the sample contracts as it did before,
but the transaction documents have to contain main terms as the
sample contracts do.
Further guidance for housing ownership by foreign individual
Decree 99 clarifies eligible foreign buyers are those who have
their valid passport affixed with an entry stamp by the immigration
authority of Vietnam.
Foreign individuals may purchase either directly from developers or
from other foreign individual or entity who owns residential housing
in Vietnam. In later case, the ownership duration is the remaining
term specified in the issued ownership certificate. However, if the
foreign housing owner sells the residential housing to a Vietnamese,
the Vietnamese will hold the indefinite ownership term over the
property.
The foreign owners have to dispose the housing properties before
the expiry of the ownership duration, otherwise the properties may
belong to the State of Vietnam. However, there is also a possibility
for foreign owners to extend the ownership duration by submitting
the request to relevant authorities for consideration.
There is still a confusion or ambiguity under the regulations that
although the LoH says that a foreign owner may lease its housing
property and earn the rental, the LoREB says that foreign investors
are only allowed to “lease real properties for sub-leasing”, and
Decree 99 also strictly prohibits foreign individuals and/or entities
from purchasing residential housing for the purpose of reselling
business for profits. This must be further clarified to comfort the
foreign homebuyers in owning residential properties in Vietnam.
Determination of restrictions in foreign housing ownership
The LoH sets forth foreign buyers are not allowed to own properties
in areas of national security and foreign ownership ratio in an
apartment building must not over 30% or 250 landed houses in
a ward scale (or 10% at maximum in a project that develops over
2500 houses).
Decree 99 requires the Ministry of National Defense and Ministry of
Public Security to specify and inform such areas of national security
to the local authorities for informing the developers.
As such, the provincial departments of construction (DOC) have
to build an online portal where details (i) projects that foreigners
are not permitted to own residential housing; (ii) the number of
apartments in each building and/or the number of landed houses
in a development project that foreign individuals/ entities are
permitted to own; and (iii) the number of residential houses have
been purchased by foreign individuals/entities in a project/building.
Prior to executing a contract, the sellers either by visiting the
portal or by requesting DOC to provide detailed information must
check whether or not their houses are subject to any restrictions
on quantity or areas where foreign individuals can own residential
houses. Failing to do so, the sellers must pay compensation for loss
and damage to the foreign purchasers.
After the contract is executed, the seller must give a notice to DOC
to inform the address of the sold property.
Additional restrictions imposed on capital mobilized from
homebuyers
Pursuant to Decree 99, capital mobilization for a project must be
conducted in the forms prescribed in the LORH only, and the raised
capital is used for developing the property project only.
Capital mobilization by the way of “capital contribution agreements
and being distributed with housing units” (as previously allowed to
the extent of 20% of total units in a project) is no longer allowed.
Source:
LNT’s practices are focused on assisting their client with their most complex legal matters in the following areas: Banking &
Finance, Corporate, Dispute Resolution, Intellectual Property and Real Estate & Infrastructure. LNT regularly partner with Colliers
to ensure Best in Class Real Estate Advisory Service’s. Mr. Thai Binh Tran heads LNT & Partners’ Real Estate & Infrastructure
Practice Group, and brings with him more than 15 years of legal experience. Mr. Tran has advised Colliers’s clients on a wide
variety of matters covering all aspects of the real estate industry, including project implementation, land use rights and property
ownership-related matters, property acquisition transactions and taxation matters, and real estate project development procedures.
Disclaimer: The legal update is prepared by LNT & Partners and should not be taken as an advice to a specific matter. Should a reader
have any query or need further clarification, please feel free to contact Mr. Binh Tran, Partner of LNT, at binh.tran@lntpartners.com.

Q4 2015 | INVESTMENT HIGHLIGHTS - NEWS COVERAGE
Prime Minister Dung: Equitization paying big dividends
VOV News (english.vovnews.vn), 7 October 2015
Prime Minister Nguyen Tan Dung stated at a recent Global Investment
Forum in Hanoi that the number of state owned enterprises
(SOEs) has dropped by 90% from roughly 12,000 over the past
two decades. The equitization process has created a friendlier
business climate and has been a key factor behind the nation’s
economic success over recent years. The plan to equitize SOEs
and raise the ratio of foreign ownership has drawn positive review
from foreign investors. The government’s steadfast dedication to
augmenting the business environment and competitiveness has
resulted in impressive outcomes in foreign investment attraction.
TPP helps small, medium businesses: experts
Vietnam News, 8 October 2015
The Trans-Pacific Partnership deal (TPP) will offer more business
opportunities for local small- and medium-sized enterprises (SMEs)
although many challenges still remain. Diversification in the business
sectors under TPP will create big opportunities for domestic
enterprises, including SMEs during the process of seeking new local
and overseas markets. To support private economic sectorafterjoining
TPP,thestateshouldpromotearenovationofeconomicgrowthmodels,
restructuring local economies and improving business environment.
Vietnam access to TPP markets to affect China exports
Saigon Times Daily, 9 October 2015
The World Bank in Vietnam has projected that Vietnam’s exports
would replace an increasing share of China to Trans-Pacific
Partnership (TPP) markets when the comprehensive trade agreement
comes into force. The TPP is expected to create opportunities
for Vietnam to diversify trade and enhance market access to key
export markets, especially the United States and Japan. This trend
has already been ongoing even before the conclusion of TPP talks.
Solid investment
Vietnam Economic Times, 12 October 2015
When two long-awaited pieces of legislation the Law on Housing
and the Law on Real Estate Business came into effect on July 1,
industry insiders expected their significant impacts on marking an
important step towards opening up Vietnam’s real estate market to
overseas investment. The new law is believed to provide motivation
to developers to kick off construction of second home products
around the country. Although the second home market is still
in the very early stages of development, the market in Vietnam
can compete directly with those in the region such as Phuket and
Bali, given their competitive price and better quality. Meanwhile,
new launches of villa and condominiums in Phu Quoc and Da
Nang are expected to attract foreign buyers in the short term.
Foreign investors gear up with investments in Vietnam’s
property
VOV News (english.vovnews.vn), 17 October 2015
As the market recovery has become clearer, multinational
groups and foreign investment funds have begun to inject
money into real estate projects, mostly in large ones, such as
Diamond Island - Phase 2 (Kusto Home), Nam Hoi An Complex
(Chow Tai Fook), Caye Sereno seaport (Jen Capital), etc.
ASEAN is now an attractive destination for foreign investors, while
Vietnam is particularly important thanks to its gateway position. The
Vietnam market is heating up, supported by a series of new policies.
Finnish fund investing in Viet Nam’s property market
Vietnam News, 19 October 2015
PYN Elite Fund (Non-UCITS), managed by Finnish PYN Fund
Management Ltd, has been actively buying shares in many real
estate companies in Viet Nam with an eye to the future. Hoang Quan
Consulting Trading-Service Real Estate Corp (HQC) last Thursday
told HCM Stock Exchange that the fund had bought six million
shares in the company on October 89, raising its stakes in Viet Nam
to almost 22 million shares, equivalent to 8.34 per cent of its capital.
According to the fund manager Petri Heiskanen, PYN Elite fund has
defined Viet Nam as its core market for the period 2013-2020.
Golden Property Mine to Be Tapped Soon
Vietnam Business Forum, 9 November 2015
Sapa is a potential but untapped real estate market, according
to professional investors and international experts. This is
a new “gold mine” that will bring huge profits for investors.
Infrastructure development and income growth are attributed
to the new investment wave for vacation property developments
in Sapa. The town is currently a much-interested real estate
market. After infrastructure is completed, a series of large
investment projects will be implemented to tap the local potential.
Ho Tram Strip gets US$50 mil. from Harbinger Capital
Saigon Times Daily, 10 November 2015
U.S. investment fund Harbinger Capital has announced to inject an
additional US$50 million into Ho Tram Strip, the 2,2km beachfront
tourism development in Ba Ria - Vung Tau Province, raising the total
investment in the project to nearly US$1 billion. Additional capital is
earmarked for several signature components, including construction
of the second building of The Grand, villas and condos, additional
leisure amenities in and around The Grand, as well as organization
of the Ho T ram Open golf tournament slated for early next month.

Foreign developers make beeline for Vietnam’s property market
VOV News (english.vovnews.vn), 10 November 2015
With large population, policy relaxation on foreign property
ownership and deeper international integration, Vietnam is
witnessing growing demand for housing in Vietnam. Vietnam’s
participation in the Trans-Pacific Partnership agreement, which
is expected to draw more investment into the country, especially
from major importers of Vietnamese products like the US and
Japan, has also attracted housing investors. The increasing
housing demand should also come from one of Asia’s fastest rates
of middle-class expansion, with the economy growing 6.28% in
the first half of this year - the fastest pace since 2008. After the
government’s efforts to clear up bad debts and ease restrictions on
housing buyers, the residential property market has grown rapidly.
Da Nang seeks foreign investors
Vietnam News, 11 November 2015
Danang organised an investment promotion week for 15 members
of the Japanese Business Association (Keidanren), and 120 other
Japanese businesses, in Japan from November 9 to November 12.
In a meeting with Kyohei Takahashi, Chairman of Showa Denko,
and Kuniharu Nakamura, chairman of Sumitomo, chairman of the
city’s People’s Committee Huynh Duc Tho said the city has offered
investment from Japan in the high-tech, tourism and real estate
sector. The central city was also committed to creating the most
favourableconditionsforJapanesebusinessesinthecityinthefuture.
The central city also hosted an investment promotion event in Berlin,
Germany, this week calling investors from Europe in the tourism,
high¬tech and information technology (IT), and software sectors.
Saigon port redevelopment announced
Vietnam Economic Times, 15 November 2015
Saigon Port Co. Ltd. will partner with Vingroup to develop a real
estate project worth over VND11 trillion ($490 million) on the current
site of the port after it is relocated in 2016. After equitization, Saigon
Port will join forces with Vingroup to establish an urban development
investment company called Ngoc Vien Dong to implement the project.
With 26 per cent held by Saigon Port, Ngoc Vien Dong will develop a
32.1 ha residential area comprising 3,000 apartments, riversidevillas,
office buildings, commercial facilities, a boat terminal and schools.
Consortium awaits green-light
Vietnam Investment Review, 30 November 2015
Despite a strong commitment to expediting a USD2.2 billion ¬Eco
Smart city project in Ho Chi Minh City’s Thu Thiem new urban
area, the foreign investment consortium led by South Korea’s retail
giant Lotte Group and three other Japanese partners - Mitsubishi
Corporation, Mitsubishi Estate Limited, and Toshiba Corporation, is
still unsure as to whether or not they have been selected to move
forward with the project. The project covers a 16.7 hectare area,
with the aim of turning the space into a signature development
consisting of trade centres, hotels, serviced apartments, office
buildings, residential blocks and a 50-storey tower. Despite
having deposited over $90 million in land use fees, the foreign
consortium does not know if it will be granted development rights.
Bitexco joins consortium to develop new urban area
Saigon Times Daily, 4 December 2015
The government of HCMC has chosen a consortium comprising the
local firm Bitexco and Dubai-based Emaar Properties PJSC to develop
a new urban area worth VND30.7 trillion (US$1.36 billion) in Binh
Quoi-Thanh Da in Binh Thanh District. The project covers about 427
hectares in the entire Ward 28 of the district and excludes the Saigon
River water surface. The VND30.7 trillion amount will be used for
infrastructuredevelopmentandcompensationforaffectedhouseholds.
The project will be carried out in three phases from 2016 to 2030.
Property Giants Stand Ready for Long-distance Races
Vietnam Business Forum, 7 December 2015
Professional property firms in southern Vietnam have actively
outlined business strategies and plans to create opportunities, rather
than sit by and wait for opportunities as earlier. Many property
investors have announced their big investment projects in the last
two months of this year, such as FLC Group in Hanoi, Bach Dat
Company in Danang, Phuc Khang Corporation and Sacomreal in
HCMC. Many property companies have well established their brand
names and positions on the domestic market with effective meticulous
business plans, including Him Lam, Novaland and Dai Quang Minh.
Mortgages replace sacks of cash in Vietnam as buyers seek loans
Thanh Nien Online, 7 December 2015
Home loan surged 22 percent through August this year, marking
a shift in a country where it is common for buyers to plunk down
sacks of cash for payment. Real estate loans, which account
for about 8 percent of total bank lending, are contributing to
a property rebound of which residential sales almost double
this year. The bank estimated the country’s mortgage market is
growing approximately USD3 billion a year. However, the rapid
popularity of mortgages, coupled with ample residential inventories,
is raising concerns about credit risks and real estate bubble.
FLC approved to develop VND1.6 trillion resort in Quy Nhon
Saigon Times Daily, 8 December 2015
The government of Binh Dinh Province has given the approval
for FLC Group Joint Stock Company’s eco-resort project worth
VND1.6 trillion (US$71.2 million) in Quy Nhon City. Scheduled
for completion in 2017, phase one of the two-phase project will
include the luxury resort and tourism-related services in Hon
Seo area. FLC plans to implement phase two until October 2018.
Besides FLC, Central provinces have recently attracted investment
to many tourism projects such as the mix-used project by Vingroup
with 300-key hotel, villas, entertainment center, golf course,
restaurants and a cable car system in Hai Giang or the five-star
hotel project Kim Cuc investment and construction in Quy Nhon City.

Vietnam A Rising Asian Retail Market
Vietnam Economic Times, 10 December 2015
The upswing in FDI commitments and disbursements has buoyed
economic growth and underlined Vietnam as a solid investment
destination. As at the end of October, foreign companies generated
USD95 billion in export revenue this year, an increase of 14.3
percent yearonyear and accounting for twothirds of Vietnam’s
total export revenue. Foreign companies also recorded a trade
surplus of USD12.9 billion, contributing to bridging the trade
deficit. Foreign companies registered to invest $20.22 billion in
Vietnam in the first eleven months of this year, up 16.7 per cent
compared with the same period last year. One thing highlighting
the success of FDI in Vietnam this year is the continual relocation
of investments by multinational companies to the country.
Samsung Electronics or Jabil Circuit are good examples for this
trend. The wave of investment from multinational companies
has encouraged others that previously left Vietnam to return.
Back In Favor
Since mid-2014 Vietnam’s residential market has been recovered,
starting with the affordable segment. Many projects entering the
market in 2015 have achieved high absorption rates. There is a
strong growth in both demand and supply in the apartment sector.
However, infrastructure is regarded as a major obstacle for Vietnam
taking advantage of the opport unities from the TPP.
The key drivers of Vietnam’s property market in 2015 have been
economic recovery, controlled inflation and interest rates, rapidly
improving infrastructure, the stimulus package to fund affordable
housing and a more supportive legal framework. Foreign direct
investment (FDI) in real estate has increased strongly since the
beginning of this year. According to the Foreign Investment Agency
(FIA) under the Ministry of Planning and Investment (MPI) Vietnam’s
property market attracted $1.81 billion in FDI to 19 new projects in
the first nine months and seven existing projects increased their
registered capital.
A Piece Of The Action
Mergers and acquisitions in real estate are expected to boom in 2016
as foreign investors seek partners rather than do it alone. 2015 saw
many foreign investors pouring capital into Vietnam’s real estate
market. Foreign direct investment (FDI) into the country’s industrial
park (IP) segment accounted for 67 per cent of the total capital of $11
billion and 59 per cent of the 1,400 projects in the nine-month period
from Januaryto September. Manufacturing will undoubtedlysee a lot
of foreign investment, as foreign companies with expertise in certain
sectors look to take advantage of low labor costs and agreements
like the TPP with their zero tariffs. Utilities and infrastructure will
benefit from M&A deals as these areas need sustained investment
to support Vietnam’s growth. However, foreign investors are
eligible to buy shares in only a few real estate projects in Vietnam.
Any project that can generate a good return will potentially be of
interest but different foreign investors have different risk appetites.
A Piece Of The Action
Mergers and acquisitions in real estate are expected to boom in 2016
as foreign investors seek partners rather than do it alone. 2015 saw
many foreign investors pouring capital into Vietnam’s real estate
market. Foreign direct investment (FDI) into the country’s industrial
park (IP) segment accounted for 67 per cent of the total capital of $11
billion and 59 per cent of the 1,400 projects in the nine-month period
from Januaryto September. Manufacturing will undoubtedlysee a lot
of foreign investment, as foreign companies with expertise in certain
sectors look to take advantage of low labor costs and agreements
like the TPP with their zero tariffs. Utilities and infrastructure will
benefit from M&A deals as these areas need sustained investment
to support Vietnam’s growth. However, foreign investors are
eligible to buy shares in only a few real estate projects in Vietnam.
Any project that can generate a good return will potentially be of
interest but different foreign investors have different risk appetites.
New Kids On The Block
Recovery of the real estate market and potential opportunities
created by agreements such as the TPP are attracting new foreign
investors. Figures from the Foreign Investment Agency show
that foreign investors committed to invest in 25 new property
projects in the country this year, as at the end of October,
outlaying $1.8 billion in the process and also registered to increase
their capital by a total of $275 million in eight existing projects.
Total foreign investment in the real estate market at this time is
nearly double what it was a year ago. Singapore-based Genesis
Global Capital, Hong Kong-based Gaw Capital Partners, Japanese
fund management Creed Group are newcomers to Vietnam
real estate market. The new wave of foreign investment has
been a breath of fresh air for many struggling property projects.
Key Resource
The upswing in FDI commitments and disbursements has buoyed
economic growth and underlined Vietnam as a solid investment
destination. As at the end of October, foreign companies generated
USD95 billion in export revenue this year, an increase of 14.3
percent yearonyear and accounting for twothirds of Vietnam’s
total export revenue. Foreign companies also recorded a trade
surplus of USD12.9 billion, contributing to bridging the trade
deficit. Foreign companies registered to invest $20.22 billion in
Vietnam in the first eleven months of this year, up 16.7 per cent
compared with the same period last year. One thing highlighting
the success of FDI in Vietnam this year is the continual relocation
of investments by multinational companies to the country.
Samsung Electronics or Jabil Circuit are good examples for this
trend. The wave of investment from multinational companies
has encouraged others that previously left Vietnam to return.

COLLIERS INTERNATIONAL | VIETNAM
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