Monday, November 26, 2007

Vietnam has room for new real estate entrants

Enough room for new market entrants

GuocoLand Binh Duong CEO Lawrence Peh

Singapore’s GuocoLand last week started building a residential complex called The Canary in HCMC’s neighboring province of Binh Duong. The Saigon Times Daily talked with GuocoLand Binh Duong general director Lawrence Peh over the prospects of the domestic property market. Excerpts:

The SGT Daily: What is your view about the outlook of Vietnam’s property market?

- Lawrence Peh: Over the past year, Vietnam has seen several important diplomatic, economic and cultural events. Vietnam has attracted huge capital inflows and the trend will remain positive in the years to come. As foreign investors are exploring investment opportunities in Vietnam, the realty market should be developed to meet their demand.

But the realty market is still risky. What do you think?

- We are very optimistic about the market. We have a strong financial position, management expertise and a long-term investment strategy, so our views are based on the development potential of the economy in the future.

Many corporations focus on HCMC, Danang and Hanoi realty markets while GuocoLand invests in Binh Duong. Could you explain this?

- Binh Duong stands out among its peers given its highest ranking in the Provincial Competitiveness Index and its fastest economic growth. Its per capita income is increasing rapidly as well. Binh Duong is also among the provinces that offer investors the most incentive policies. In the urbanization aspect, Binh Duong is seen as a young city. It has not had any urban projects with international standards but in reality, demand for such projects has already existed. Actually, the market potential of the central region has been foreseen by GuocoLand and we intend to develop projects there in the coming time. We’re also seeking opportunities for investment in HCMC and Hanoi.

Who are The Canary’s target customers?

- We target young and successful families or high-income people as a whole. The number of high-income earners is swelling. Besides, more foreign investors and white-collar workers are coming to industrial parks and new urban areas and they demand accommodation and services provided by professional property managers.

What market segments is GuocoLand interested in?

- It depends on the development potential of each locality. The center of major cities will be suitable for high-end condo, office, restaurant and shopping mall projects. In those localities undergoing urbanization, we’ll consider such urban complex projects as The Canary. We forecast the average urbanization rate in Vietnam will be 30% by 2010 and some 50% by 2020. So, the potential is huge, especially that of the housing market. We think housing supply of all segments in Vietnam is short and the imbalance between supply and demand will continue in the next few years.

Reported by Thanh Phuong