The southern province of Ba Ria – Vung Tau granted licences to 30 new projects worth a combined US$521 million since the beginning of the year, according to the provincial Department of Planning and Investment.
Eleven of the 30 projects include foreign investments. During this period, the province also revoked the investment licences of four sluggish projects capitalised at $36 million, the department said.
New SSC draft guidelines to continue margin lending ratio
In its draft guideline on margin trading issued on Thursday, the State Securities Commission would continue to restrict the margin ratio to 30:70 – a ratio market insiders are saying is too restrictive.
Under the guideline, brokerages would be able to loan up to 30 per cent of the value of a securities transaction, while the investor would be required to front the remaining 70 per cent.
"The proposed margin ratio of 30:70 is too conservative and doesn't truly reflect the nature of margin trading," Vietcombank Securities Co deputy director Tran Viet Anh told the newspaper Dau tu Chung khoan (Securities Investment).
Since the nation's stock markets had yet to allow for short sales and derivative trading, a margin ratio limited to just 30 per cent wasn't going to do much to improve the liquidity of shares on the market, Anh said, suggesting a ratio of at least 40:60.
The Ministry of Finance issued Circular No 74 on June 1, approving margin trading effective August 1, and the SSC was tasked with drawing up specific guidelines.
The margin ratio of 30:70, although it would help ensure the financial security of securities companies, was unfeasible, said the director of a Ha Noi-based securities company who asked to remain anonymous. The ratio should depend on an evaluation of each share and each investor's financial capacity and relationship with the brokerage, he said.
The newly revealed draft guideline also sets regulations on securities eligible for margin trading. The stocks would have to have been listed for at least six months, have book value of no lower than face value, and not be subject to transfer restrictions.
These rules would broaden the number of shares eligible. Under an earlier draft, many blue chips, including Saigon Securities Inc (SSI), Asia Commercial Bank (ACB) and Vietinbank (CTG), would have been ineligible as their share prices sometimes fell below VND10,000 or failed to satisfy liquidity requirements in a single month.
Nevertheless, SHB Securities Co deputy director Bui Thi Minh Tam said the commission should further loosen the criteria by allowing securities companies to create the list of eligible stocks on the basis of consultations and negotiations with investors.
Tran Viet Anh of Vietcombank Securities Co said the commission could manage the process by overseeing the companies' basic indicators, such as minimum charter capital, usable capital, and liquidity.
SSC's vice chairman Nguyen Doan Hung said the commission's policy was to be prudent when initially implementing margin trading, since many securities firms have already suffered heavy losses in the current market decline.
"The money they lend comes from their equity or from of bank loans, so it is better to be careful," Hung said.
Under the new draft, brokerages which have operated for at least one year and satisfy minimum charter capital requirement would be allowed to lend up to 200 per cent of their equity to investors. The line of credit that could be extended to a single investor would also be increase from 1 per cent of equity to 3 per cent.
Interest rates would be limited to no more than 150 per cent of the prime rate set by the State Bank of Viet Nam. With the prime currently at 9 per cent, that would equat to 13.5 per cent per year.
Seafood exporters cast bigger nets
The Ministry of Industry and Trade (MoIT) has forecast a monthly seafood export revenue of roughly US$490-500 million during June and July thanks to price hikes on the world market.
The Ministry of Industry and Trade anticipated that Viet Nam would ship around 130,000-140,000 tonnes of seafood during each month.
Tra fish was set to surpass shrimp in becoming the leading seafood export earner due to a reduction in shrimp export volumes, the ministry said.
During June and July, the US, the EU and Japan are expected to remain the key import markets for Vietnamese seafood products, especially in terms of tra fish, seeing as seafood demand in these markets have been forecast to rise.
Despite being ranked behind tra fish in terms of export volume, industry insiders are still optimistic regarding the export of shrimp.
Vo Thanh Ha, head of the Northeast Asia Division of the MoIT's Asia-Pacific Department, said that the Japanese market still offered exciting opportunities for the export of shrimp during the next few months seeing as Japanese consumers currently preferred imported frozen seafood to fresh local seafood that might contain radioactive elements following Japan's recent nuclear disaster.
Ha added that Viet Nam was currently the largest shrimp supplier to the Japanese market, holding a 23 per cent market share. Japan spends roughly $1.9 billion on shrimp imports each year.
A recent Ministry of Agriculture and Rural Development (MARD) report on seafood export has forecast that the monthly seafood export revenues would range from $520 million to $625 million during the second half of 2011.
The MARD report forecast that the annual export value would climb from an earlier expected $5.3 billion to over $6 billion.
During the first five months of the year, Viet Nam exported 526,000 tonnes of seafood, totalling $2.1 billion, up 10.43 and 29 per cent in terms of volume and value. In May alone, seafood exports reached 120,000 tonnes, valued at $480 million, the highest monthly export levels in both volume and value thus far this year.
Exports surge through Tinh Bien
Total turnover of commodities transported via Tinh Bien Border Gate in southern An Giang Province reached US$70 million since the beginning of this year, the provincial authorities said. Of this figure, exports were $62.8 million, mostly in plastic products, foodstuff and electricity.
VN, US plan to boost investment, trade
Leaders of the Business Association of Overseas Vietnamese in the US (BAOOV-US) started their visit to Ha Noi yesterday to boost trade and investment between US and Vietnamese businesses.
The visit aims to introduce the Maryland-based Viet Nam Business Centre (VBC) where Viet Nam's products are showcased and Vietnamese enterprises place their representative offices.
The BAOOV-US leaders will meet with Vietnamese businesses to promote investment cooperation programmes and call on local importers and exporters wishing to trade with US distributors to open representative offices at VBC.
During their three-day visit, the delegation plans to work with the Viet Nam Chamber of Commerce and Industry, the Ministry of Planning and Investment, the State Committee on Overseas Vietnamese Affairs and the Viet Nam-US Businessmen's Club.
Mercedes motorshow opens in Ha Noi
The Mercedes Fascination Motorshow of this year's edition opened yesterday at Giang Vo Exhibition Centre in Ha Noi. The show clearly demonstrated the vision of Mercedes-Benz to celebrate its glorious 125th anniversary and continue its lead of the world's luxury automobiles.
Auto, accessory expo opens in City
Saigon Autotech and Accessories 2011 kicked off in HCM City yesterday with the participation of 200 domestic and foreign businesses coming from South Korea, Singapore, Thailand and Malaysia.
The four-day event is expected to create closer links between producers, service providers and customers as well as help domestic and foreign firms to seek new partnerships, organisers said.
Vinpearl to open new Da Nang resort
Vinpearl Luxury Da Nang, a five-star-plus resort, would be opened in the central city of Da Nang on July 3 following 20 months of construction, announced the Vinpearl Joint Stock Company.
Located on Non Nuoc beach, the resort covers an area of 15.4ha, and its 200 rooms and 39 villas are fully equipped with modern facilities.
The resort is part of the "Vinpearl Luxury" brand, a new development strategy.
Dutch plan semiconductor centre
Simax Lithography BV, an affiliate of the Netherlands-based Simax International BV, has received permission to develop a semiconductor centre at Sai Gon Hi-Tech Park (SHTP) in HCM City.
With an investment capital of US$15 million, the centre will develop and manufacture spare parts and advanced semi-processing equipment and machines for the semiconductor industry.
VN draws 54 per cent more Aussies
The number of Australian tourists visiting Viet Nam topped 20,700 in April, a year-on-year increase of 54 per cent, the Australian Bureau of Statistics reported.
Viet Nam saw the second fastest growth in terms of attracting Australian tourists, just one percentage point behind Cambodia and above France (50 per cent), Malaysia (42 per cent), Indonesia (41 per cent), Vanuatu (36 per cent), and the US (34 per cent).
But New Zealand, the US, and Indonesia were the most popular destinations for Australian tourists, respectively attracting 95,000, 74,800, and 74,100 visitors from the continent.
PetroVietnam plans new NPK factory
PetroVietnam Fertiliser and Chemicals Corporation will begin construction of a new factory in southern Ba Ria-Vung Tau Province in the third quarter.
The plant, to be located in the Phu My 1 Industrial Park next to the company's existing plant, will cost around US$63 million.
It will have an annual capacity of 400,000 tonnes of NPK (nitrogen, phosphorus, and potassium) fertiliser and is expected to begin production in 2013.
Viet Nam now imports 250,000 tonnes of NPK fertiliser annually
Law to protect consumer interests
The draft law on goods' prices did not focus enough on consumers and market rules, experts said at a seminar in Ha Noi on Tuesday.
A finance ministry official said the new law would build on the existing Ordinance on Price.
He added that the legal system needed harmonising.
The draft law, which is expected to come into effect in August, would also create greater transparency, in line with the country's commitments to the World Trade Organisation, he said, adding that the law would create a more open market economy and that the State would only act as an overseer.
Meanwhile, Nguyen Minh Phong, head of the Ha Noi Socio-Economic Development Research Institute's economic research division, said law makers should ensure customers' interests were taken in account. It should also effectively deal with violations by the management offices.
Vu Dinh Anh, deputy head of the Ministry of Finance's Market and Price Research Institute, agreed, saying the law should have specific regulations governing the cost of goods and services.
However, Anh said the price of goods should be governed by market forces.
Enterprises had the right to set whatever price they want for their goods, while the customers should either accept or reject the price offered, said Truong Thanh Duc, deputy general director of Marine Bank.
The State however should regulate the price of only essential goods within acceptable limits, Duc said.
Nguyen Quy Son, deputy chairman of the Viet Nam Pharmaceutical Trading Association, said market forces should determine retail prices - not the State.
Dinh Dung Sy, deputy head of the Government Office's Legal Department, said the law was designed to bring clarity and price stabilisation to the market.
Demand on the rise for pharmaceutical imports
The Vietnamese pharmaceutical market is turning into an Eldorado for foreign companies due to a significant increase in year-on-year domestic demand.
A Ministry of Health report has revealed that each Vietnamese person spent US$19.8 on medicine during 2009.
The above-mentioned figure is expected to surge to $33.8 in 2014 and the average growth rate of the domestic pharmaceutical market forecast to reach 17-19 per cent per year, the Ministry said.
Market potential has been greatly influenced by imports during the first five months of the year.
The Viet Nam General Department of Customs confirmed that drug import values had increased from January in terms of raw materials and medicine.
In January, the industry spent only $12.1 million on importing raw medical materials, with an increase of nearly $20 million in March and $18 million in April. During the first half of May, the figure reached nearly $10 million.
Import values also increased in terms of medicine production.
Import expenditure reached $443.2 million in four months, a year-on-year increase of 23.8 per cent.
Since the beginning of the year, imports had increased across most of the market, according to the General Department of Customs.
India, France and South Korea have remained the biggest partners of Viet Nam's domestic pharmaceutical industry.
Import turnover is estimated to increase after the Ministry of Industry and Trade announced that import tax would be cut from 5 per cent to 2.5 per cent during 2011-12.
The ministry predicted that, thanks to its tax cuts, the different types of drug imported into Viet Nam would increase by between 10 and 20 per cent.
A plan to develop and restructure Viet Nam's pharmaceutical industry is currently under compilation. The plan is set to encourage the production of popular medicine in order to cut prices, stabilise the market and reduce Viet Nam's dependence on foreign countries.
Viet Nam businesses eye Lao market
Over 70 Vietnamese small- and medium-sized enterprises learned about Lao regulations on establishing distribution systems and incentive policies for investment, as well as market demand in Laos during a seminar held in HCM City on Thursday.
Participating businesses mainly operated in production and trade of household utensils, foodstuff, electronic equipment, construction materials and agro-forestry -fishery products.
The event, organised by the HCM City Investment and Trade Promotion Centre, was expected to make an effective contribution to expanding trade co-operation between the two countries. Last year, two-way trade reached almost US$500 million, $198.4 million of the total coming from Vietnamese exports, a year-on-year increase of 17.2 per cent. The two countries plan to raise bilateral trade to $2 billion by 2015.
BMW introduces the all-new X3
The German automobile manufacturer BMW launched its most popular Sports Activity Vehicle, the new X3, in HCM City on Thursday.
Since appearing in the global market late last year, the BMW X3 has sold 33,000 vehicles worldwide. Vietnamese customers must wait six months for their orders.
BMW said Viet Nam was the fastest growth market in Southeast Asia, with an increase of 46 per cent for the first quarter of this year, while others got 40 per cent.
Fish exporter to list on HCM City bourse
The International Development and Investment Corporation will debut 38 million shares on the HCM City Stock Exchange on June 30 under the code of IDI. The reference price for the first day of trading will be VND18,000 (US$0.87) per share, with an allowable fluctuation band of plus/minus 20 per cent.
The Pangasius frozen fish exporter, located in the southern province of Dong Thap, has a charter capital of VND380 billion ($18.4 million), of which Sao Mai Construction Corp (ASM) holds a 22.5 per cent stake.
IDI posted a revenue of VND946 billion ($45.9 million) and a net profit of nearly VND92 billion ($4.5 million) last year. During the first quarter of this year, the company earned revenue of VND178 billion ($8.6 million) and a net profit of VND14 billion ($679,600).
Government sells $29m in 10-year bonds
The Ha Noi Stock Exchange reported it successfully sold VND600 billion (US$29.1 million) worth of government bonds, equivalent to 86 per cent of total volume, during a recent auction.
The 10-year bonds, with a par value of VND100,000 ($4.85), were sold at an interest rate of 12.2 per cent per year. No five-year bonds were sold.
Company lifts ban on share transfers
Quoc Cuong Gia Lai Co (QCG) announced that it had lifted a ban on transferring 22.3 million QCG-coded shares subject to transfer restrictions.
Shares comprise 50 per cent stakes (15.4 million shares) held by managing staff, and total 6.9 million shares held by shareholders including VNDirect Securities Co, Sacom Development and Investment Corp (SAM) and QCG's Chairwoman Nguyen Thi Nhu Loan, bought during the company's share issue to strategic investors.
Securities firms incur $27.7m in losses in Q1
Twenty-four security firms reported a total loss of VND570 billion (US$27.7 million) during the first quarter of this year, the State Securities Commission reported.
Saigon Securities Inc (SSI) topped the list of losers with a loss of more than VND100 billion ($4.8 million), followed by the Bao Viet Securities Co (BVS) with a loss of VND54 billion ($2.6 million) and the SHB Securities Co (SHS) with a loss of VND48 billion ($2.3 million).
The heavy losses were attributable to declines in brokerage fees and losses during self investment by securities companies.
Small property investors look for escape route
Many individual property investors in Ho Chi Minh City are willing to take a loss if they can sell out since they are under relentless pressure from the high interest rates on bank loans.
But not many are succeeding in selling their property since there are no takers despite the fact that prices have fallen.
Thanh, a real estate broker, said land in the Gia Hoa luxury project in District 9 now costs only VND15-16 million (US$755-800) per square meter compared with VND18-22 million last year.
Many other projects in District 9 like Tri Kiet, Nam Long, Khang Dien, Phu Nhuan, Bac Rach Chiec, Truong Thanh, An Thien Ly have also seen prices slide dramatically.
Though the investors have been bargaining away their lands, the market remains unresponsive.
Vy, an investor, said he has been placing ads to sell his land in Khang An in District 9 for more than a month in vain.
He bought the 144-square-meter land last year for VND12.7 million ($635) per square meter.
Now, even after lowering the price to VND11.5 million, he cannot sell it.
Binh, another investor, put two plots of land in the Phong Phu 4 project in Binh Chanh District for sale at a real-estate trading floor in May at VND11.5 million per square meter but no buyer has contacted him yet.
“An investor lowered the price by VND2 million ($100) compared to his purchase price but still could not find a buyer,” he said.
Many real estate investors said in the current context, with loans being tightened and interest rates unbearably high, it was unwise to invest in property.
“Prices may have declined dramatically but they still remain high,” Hung, an experienced investor, said.
“A land in a finished project costs at least VND1.5-2 billion ($75,000-100,000), not to mention the cost of building a house to meet developers’ requirements. So, not everyone has the wherewithal to buy.”
With no whiff of profits in HCMC for more than three years, many investors have been forced to sell at below cost price to cut losses.
Analysts attribute the slump in the property market to the speculation for instant profits and over-leveraging that was rife.
“Some investors borrowed from banks to buy property despite having just a seventh of the cost in hand,” Nguyen Xuan Loc, CEO of the Techcomreal real estate trading floor, said.
“When they property market went into crisis, the pressure from bank debts forced them to sell at a loss.”
He gave the example of an investor who had VND800 million ($40,000) in cash but bought two lands at a price of VND4.6 billion ($230,000) in the hope of making a killing.
But two years later, he still has not managed to sell them, he said.
Hanoi looks to boost key industrial products
The Hanoi People's Committee has ratified a programme on developing key industrial products to account for 10-15 percent of the city's total export revenue during 2011-15.
Under the programme, the city expects the key products to represent 30-35 percent of its total industrial production value and the annual growth rate of the products to be 5-10 percent higher than the city's average industrial growth rate.
In order to meet its targets, the programme focuses on measures for enhancing the management competence of State bodies within the industrial sector, boosting participation of the city's industrial producers and exporters in domestic and foreign trade promotion programmes in order to enlarge market shares.
Besides speeding up administrative reforms, the programme is set to assist science and technology as well as trademark building and development.
Director of the Hanoi Department of Industry and Trade, Trinh Thi Ngan, said that the programme is aimed at creating favourable conditions for the continued development of local industrial products using all available resources.
The capital initiated its first five- year programme for developing key industrial products in 2005, under which the city categorised 53 products from 47 businesses into six groups including mechanical engineering, electronics, chemicals and plastics, footwear, textiles, paper and packaging as well as processed food.
According to the department's statistics, the 53 selected industrial products made up 34.23 percent of the city's total industrial production value last year compared to 27.6 percent a year earlier.
Besides meeting domestic market demand, the selected products earned 760 million USD from exports last year, accounting for 10 percent of the city's export turnover.
Ngan said that, despite positive results, assistance had been poorly coordinated between agencies, especially within the land and environmental protection sectors. Assistance programmes had been too general and not all enterprises were informed of what they were entitled to, she said.
Japan checks 100 pct of VN shrimp for antibiotics
Japan Thursday began inspecting 100 percent of Vietnamese shrimp imports for antibiotics after Japanese authorities warned they would increase the rate from 30 percent if one batch was found with antibiotics exceeding safety levels.
This worries Vietnamese exporters about the new difficulties they will face reaching the Japanese market.
From March 7 to June 8, Japanese authorities only inspected 30 percent of shrimp shipments from Vietnam for enrofloxacin residue, an antibiotic used to treat bacterial infections in the crustaceans.
However, after one batch was found with enrofloxacin levels higher than safety standards, authorities increased the inspeciton rate, according to the Vietnam Association of Seafood Exporters and Producers.
With the new ruling, Vietnamese enterprises said they would face more difficulties with the Japanese market.
On November 11, after finding three batches of Vietnamese shrimp containing trifluralin, an herbicide that could cause caner, Japanese authorities decided to increase inspections for the chemical from 30 percent to 100 percent.
Industrial parks, export zones eye high value-added products
HCM City industrial parks and export processing zones will continue to give priority to industries with high value-added products and services, high technologies, and low labour costs, city officials have said.
Vu Van Hoa, head of the HCM City Export Processing and Industrial Zones Authority, said major sectors include electronics, communications, information technology, chemistry, pharmaceutical products, mechanical engineering, and food and foodstuff processing.
Support industries and services will also enjoy support, Hoa said.
HEPZA hopes to attract US$2-3 billion of investment capital to these sectors in the next five years, Hoa told a workshop held in the city last weekend.
The number of skilled workers with at least vocational training degrees in IPs and EPZs will increase from 15.6 percent at present to 30-35 percent by 2015, he said.
Funding for infrastructure, training, and administrative reform will be crucial for the development of high-tech industries in IPs and EPZs, said Nguyen Anh Ngoc, deputy director of the HCM City Investment and Trade Promotion Centre.
Poor infrastructure, including roads, bus stations, water, electricity and communications, and shortage of skilled workers have turned away hi-tech investors from IPs and EPZs, he said.
Hoa noted that investment in services like banking and finance, transport, and warehousing and logistics saw sluggish growth in IPs and EPZs, accounting for just 12 percent of the total investment, due to lack of clear development policies.
As a result, most investors in IPs and EPZs are small and medium-sized businesses in labour-intensive industries like garment and textiles, footwear, and electronics, he said.
Garment and textile firms employ 32 percent of the workforce while electronics and footwear enterprises account for 19 percent and 17 percent respectively, he added.
Pakistani, Swedish businesses seek VN partners
Businessmen from Pakistan and Sweden held separate working sessions with Ho Chi Minh City’s business circle on June 13 to seek business opportunities.
A delegation of the Lahore Chamber of Commerce of Pakistan involved in the areas of food, garment and textiles, fashion accessories, chemicals, machine tools, paper and cosmetic materials sought information on Vietnam’s market demands and import and export of goods, to sign cooperation contracts.
Meanwhile, a delegation of Swedish was keen to work in partnerships with Vietnam on finding environmental solutions for sustainable economic development.
The Swedish entrepreneurs will also visit other cities and provinces including Da Nang, Quy Nhon and Ba Ria-Vung Tau during their two-day visit to Vietnam.
Rotor of Son La plant’s third turbine installed
The rotor of the third and final turbine of the Son La hydroelectric power plant, the largest of its kind in Vietnam, was successfully installed on June 13.
The rotor is 15.5m in diameter, 2.8m in height and 1,000 tonnes in weight.
To complete the installation, the Lilama 10 Company, an affiliate of Vietnam Machinery Erection Corporation (Lilama), had to mobilise 1,300 workers working in four months, said Nguyen Dinh Tinh, Director of the Lilama 10 Company – Son La branch.
The third turbine is expected to begin generating electricity on August 30.
Once its three turbines become operational, the Son La power plant will provide 30 million kWh of electricity for the national grid per day.
Construction of the VND37 trillion power plant started in December 2005, It is designed to have six turbines with a combined capacity of 2,400 MW.
Additional US$20 million to support coffee export
The Hanoi-branch of Mizuho Corporate Bank (Japan) and Tay Nguyen Coffee Import and Export Investment Joint Stock Company signed a commitment on June 13 to provide a short-term preferential loan worth US$20 million to help the company with purchasing and exporting coffee export from the 2011-2012 crop.
Since early this year, Vietnam has earned US$1.2 billion from exporting 600,000 tonnes of coffee, up by 49.4 percent in quantity and 122.3 percent in value over the same period last year. The Tay Nguyen Company exported 85,000 tonnes of coffee, earning US$187 million which accounts for 14 percent of the country’s total export turnover.
Since 2007, the Mizuho Corporate Bank has provided capital support for Tay Nguyen coffee company to help it export 35,000-40,000 tonnes of coffee to the Japanese market every year.
In the face of the fluctuating prices for farm products, particularly coffee, additional capital will help businesses create large reserves of goods and stabilize coffee prices in the region.
High-end property segment undeterred by tough conditions
As compared with the so-called affordable housing units whose selling prices are bellow VND20 million per square meter, the high-end segment with apartments and villas worth several billion per unit is facing tough sales. Interest rate support, flexible payment terms, lucky draws and discounts are among the multiple incentives developers are offering for winning buyers.
But the tough market conditions have not deterred a number of developers from launching their projects.
Among those developers is Khang Dien Housing Trading and Investment Joint Stock Company which on Saturday started marketing its luxury Goldora Villa project underway on Lien Phuong Street in Phu Huu Ward in HCMC’s District 9. The project covers some eight hectares with 119 villas of 192 to some 1,070 square meters, with prices starting from VND6.5 billion per unit.
Ly Dien Son, general director of Khang Dien, said the company had decided to launch the project to assert its business development strategy in spite of the current challenges and that the company had received feedback from the market since it launched Villa Park project nearby the newly launched project.
Villa Park is jointly developed by Khang Dien Co and Prudential Vietnam Fund Management Co, a Prudential subsidiary. It has 213 villas and garden row houses and serviced utilities such as swimming pools, Jacuzzis, barbecue gardens, sport clubs, tree parks and a kindergarten. VND1.5 trillion has been allocated for the first phase of the residential project.
Dien said some 60 villas in the first phase of the Villa Park project were sold with prices ranging from VND3 billion to VND9 billion a unit, thus encouraging the developer to move on with its second villa project in the area.
In another development in the same area, VinaCapital Real Estate Company is pressing ahead with a plan to launch a residential project later this year after it saw success in the first project nearby.
David Henry, managing director of the company, said the company would invest some US$40 million in Garland 2 project with 72 villas and four condominium towers.
The firm is expected to get positive feedback from the market as seen in Garland 1 project whose 53 villas have been snapped up.
The high-end segment on Saturday saw the Singaporean property company Keppel Land Limited and its local partner Tan Truong Company launched their mixed-use development in HCMC’s District 7.
Some 193 apartments in its Riviera Point project along the Ca Cam River in District 7 are offered from VND30.7 million (US$1,460) per square meter.
The US$200 million project has 18 residential towers with a total of 2,400 apartments of two to four bedrooms. Like other developments, it has spaces for retail shops, food and beverage outlets, and recreational facilities. As planned, the first phase of the project with 549 apartments will be completed by 2014.
Linson Lim, president of Keppel Land International for Vietnam, Thailand and the Philippines, agreed the current residential market was tough for all developers. However, the Singaporean company has a long-term development strategy in the Vietnamese market where it expects to see challenges overcome in the coming time.
While a number of developers look optimistic, many others are struggling to do all what they can to lure buyers through various incentives.
For example, Novaland Company has started up a free-staying program to get buyers’ feedback for its 39 apartments in the Sunrise City project in HCMC’s District 7.
In the program, the buyer will place a deposit equivalent to some 20% of the total value of an apartment when they sign a contract. The buyer then will make an additional payment equivalent to 60% to take delivery of the apartments. They are eligible to stay in the apartment for two years without paying a fee. After two years, they will pay the remaining 20% once they want to buy. If they do not want to buy, they can return their apartments to the company and take back their deposits together with the interest.
In another development, Phat Dat Corporation allows buyers to pay in 48 installments in the EverRich 2 condo project in District 7.
Instead of fixing a payment schedule, the firm is willing to design a payment method that fits the buyer’s monthly income. The first required deposit is 10% of the total value of an apartment and from the second to 47th payment, the buyer will pay a mere 1.3% at a time.
The company calculates that for a VND2.5 billion apartment, the buyer can pay some VND40 million per month. The amount of payment is believed to suit the income of a young family.
However, time will tell which incentives work, and which developers will win the race to attract customers. The current credit crunch and high interest rates have impacted on both the developer and the buyer.