The taste of Japanese investors in Vietnam real estate market

AEON Group's $ 190 million project was kicked off last weekend in Hai Phong under Prime Minister Nguyen Xuan Phuc’ supervision. As it comes into operation in 2020, this sixth mega market project in Vietnam will transform the 9.5ha land plot in the city center (Le Chan) into a valuable commercial real estate.
Only two weeks ago, at the other end of the country, two other large Japanese firms - Hankyu Hanshin Properties and Nishi Nippon Railroad - have completed an agreement with local real estate developers, Nam Long Investment Corporation (HOSE: NLG) to develop the Akari City project with a total investment of around VND7.676 billion, which will provide approximately 4,600 apartments and directly connect to Vo Van Kiet Boulevard - the route that links the East and West of Saigon.

These are the latest examples showing not only the interest but also the concrete and drastic actions of Japanese investors to take part in many segments of Vietnam’s real estate market. Earlier in 2017, for the first time in many years Japan returned to the top position of foreign direct investment in Vietnam with over USD $9.1 billion FDI. Besides large-scale projects in the thermal power sector, capital flow into real estate as well as other sectors are remarkable.
From the taste of real estate targeting the real needs...
Having 5 big projects cooperating with Japanese partners, and considering expansion possibility, Nam Long's projects are typical examples of Japanese investor’s taste in Vietnam real estate market. Famous for “affordable housing”segment, Nam Long launched the first project - Flora Anh Dao with Japanese partners in 2015, with a total investment capital of about VND 500 billion. At that time, Flora was Nam Long’s new product line, consisting of condominium for medium income earners who are looking for high quality living.
Targeting the real needs of customers, Flora products focus on the placement of independent facilities such as community club, swimming pool, children playground, gym, rooftop café, etc... even the average selling price of an apartment is only 1.5 billion Dong. Up to now, there are more than 3,000 flora apartments sold in Flora Anh Dao and other co-projects of Nam Long and partners. The percentage of customers buying for residency purpose in these projects therefore increased to 90%.
Also by looking at the real needs of customers, besides Flora product line, when launching villa and townhouse Valora product line, Japanese partners and Nam Long’s co-projects also target customer’s desire of affordable land-attached products. The selling price is maintained at an average of 3 billion for a townhouse of 90m2 or 8 billion for a single villa of 170 m2.
In Hanoi and other regions, Japanese investors and consultants also show a great interest in the demand of buyers when considering to invest in projects populated areas or adjacent to developing arteries, leading to city center. For example, Bitexco and its Japanese partners develop low-floor houses (townhouses, adjoining villas) at the 90-hectare The Manor Central Park project in Hoang Mai District and Thanh Liet Commune.

Similarly in Da Nang, Sun Frontier Vietnam Ltd., a subsidiary of Sun Frontier Fudousan Group, has also invested in the Hiyori Garden Tower project since mid-2017 in Son Tra district - a fast developing area of the city. The project has a total area of over 2,000 m2 with 306 apartments and property price range between 1.7 billion and 8 billion dong.
... to invest in carefully planned township
A common feature of real estate projects involving Japanese investors is the focus on landscape design and priority for location near rivers and green zone. For example, Ascent Lakeside project developed by Tien Phat, a member of Hoa Binh Construction Joint Stock Company and its Japanese partner Sanyo Homes Group, highlights Japanese architecture in a naturally blended design filled with tree, wooden and water elements.
Another high-end project, Diamond Lotus Riverside (District 8), invested by Mitsubishi Corporation in partnership with Phuc Khang Construction and Investment JSC, also has location in a riverside landscape, with 300m waterfront, a 5.000m² wide meditation garden and many other modern facilities.
Similarly, Nam Long and Japanese partners’ co-projects also emphasize the landscape as they are built in accordance with the international standard (separate planning zone) with closed-end services. A typical example is 5.38-ha Fuji Residence, which consists of 84 Valora Villas and 789 Flora Fuji Apartments, surrounded by Rach Chiec River, District 9 and a 10,000-m2 landscape lake.
In addition, Kikyo Residence that has a capital of 630 billion VND and 5.3ha of land, also includes a number of high-class facilities, such as 1-hectare primary school, 15,000m2 landscape lake and air-conditioned water surface, swimming pool, clubhouse, children's playground, central park, outdoor sports area, garden system, 2.000m2 square... According to the investors, these features will continue to be maintained and accelerated in current trillion-VND projects such as Mizuki Park, Akari City and the upcoming Waterpoint in Long An.
Talking about the search of investment opportunities in Vietnam’s real estate market, Mr. Kazumasa Ohchi - Hankyu Hanshin Properties' CEO, said that his biggest wish is to find a business partner who offers high quality housing at affordable price, contributing greatly to the regional development and suitable with their point of view. He also expects the Vietnam-Japan cooperation will create new value added for the housing sector in Vietnam.
Meanwhile, in media interview, Vu Tien Loc, Chairman of the Chamber of Commerce and Industry of Vietnam (VCCI) said that the domestic real estate market is growing strongly as a result of many new policies. Forecasts show that in the next 3 to 5 years, the market will continue to attract large amounts of foreign investment, in which investors from Asia, especially Japan is still the majority. According to Mr. Loc, the cooperation between domestic enterprises and Japanese investors will create motivation for a booming growth in the future market. 

By: Dân trí.