Chinese step up acquisition of property in Vietnam

Hongkong Land has announced it will spend US$95 million to acquire a project in Thu Thiem new urban area from CII. In the deal, HongKong Land will enjoy 64% of benefits from the project, while the remaining will belong to CII.

Before the deal with CII, HongKong Land cooperated with SonKim Land to develop Nassim, a high-end project in Thao Dien area in district 2. 

HongKong Land is a familiar name to many Vietnamese. It once quit a project at No 164 Dong Khoi street in district 1 because of limited capability during the market slump in 2008-2009.

Another M&A deal which caught the public’s attention recently was the Dai Phuoc Lotus project, transferred from VinaCapital to China Fortune Land Development, one of the largest Chinese firms in the field, in a deal worth US$65 million.

Dai Phuoc Lotus is not the only project that China Fortune Land Development targets. The group is cooperating with Vietnam’s Tin Nghia Corporation to develop the East Sai Gon Urban Area and Ong Keo Industrial Zone in Dong Nai province. Both projects are located near the Long Thanh International Airport, which will take shape in the near future.

Sunwah, the real estate developer from Hong Kong, has been quietly implementing a project on Nguyen Huu Canh street in Binh Thanh district with investment capital of US$200 million. 

In Hoi An City, after many delays, the Nam Hoi An integrated resort with casino worth US$4 billion was officially kicked off in 2016 after VinaCapital chose a suitable partner – Chow Tai Fook from Hong Kong.

The deals, analysts say, show the expansion of the investment wave from China. 

Chinese investments have been made in many different market segments, from houses to offices for rent, from industrial zones to tourism real estate.

Why Vietnam?

The Chinese real estate market is now experiencing quiet days after a long boom as the Chinese government has begun tightening the market to avoid a bubble. 

Chinese businesses therefore are trying to look for investment opportunities overseas. If compared with other SE Asian countries, the promised profitability in Vietnam is satisfactory. 

In the industrial zone market segment, the return on investment, according to JLL, could be up to 10-12% in Vietnam, which is equal to Indonesia and higher than the Philippines (8%), Malaysia (7%) and Singapore (7%).