Nissan Vietnam Co Ltd, part-owned by Japan’s Nissan Motor Co., said on Tuesday it would start production in Vietnam and market the first locally assembled vehicle by 2010.

“Vietnam is a strategic market for Nissan with tremendous opportunities,” Shinya Hannya, Nissan’s corporate vice president for Asian markets, said in a statement without giving production details.

The Southeast Asian country’s economy is forecast to grow 4.5 percent this year, compared with just 0.7 percent for the whole of Southeast Asia, according to the Asian Development Bank.

Nissan cars will be assembled at a domestic automobile firm, Vietnam Motor Corporation, and distributed by Nissan Vietnam, a venture established in December 2008 by the Japanese car maker and Denmark’s Kjaer Group A/S, the statement said.

January-May sales by the 16 car makers operating in Vietnam fell 35 percent from the same period last year to 58,860 units, industry reports said.

Dealers say demand could slow significantly in the rest of 2009 as consumers put off big-ticket purchases such as cars and houses.

Last year, car sales rose 37 percent to a record 110,186 units.

BIDV Insurance Co (BIC) last weekend signed a 564 billion dong insurance contract with Agrimeco Tan Tao Mechanics – Energy Industrial Park Joint Stock Co.

As part of the contract, BIC will provide construction risk insurance and responsibility insurance for the company in charge of constructing the technical infrastructure for the Agrimeco Tan Tao energy and industrial zone.

The industrial zone has a total area of 197 hectares in three communes of Vinh Phuc, Tan Tien and Nghia Tru, Hung Yen province’s Van Giang Dist.

This is one of the IZ development project till 2015, which was approved according to the government’s Decision No 1107/QD-TTg dated August 21, 2006. (Vietnam Business News)

After nine months from being licensed, Great Eastern, the Singaporean-Malaysian largest insurance joint venture ohas btained Vietnamese Ministry of Finance’s approval to increase its chartered capital by 230 billion dong.

Thus, total chartered capital of Great Eastern Vietnam Life Insurance Co Ltd (GELV) will be 830 billion dong set for insurance consultancy and better insurance products.

Great Eastern has been chosen to be one of Top 100 foreign invested companies with the highest revenue in Viet Nam. (Vietnam Business News)

Vietnamese wood product makers should take advantage of the warming local property market to spark growth as export demand dwindles, said industry insiders at a meeting last week. 

Though the global economic slump has cut into international sales, domestic demand for wood construction products has been rising as the property market heats up and more people buy new homes and property, said members of the Handicraft and Wood Industry Association at the Ho Chi Minh City gathering.

Dang Thi Mai, director of the Research Center for Business and Consumers, said wood companies should tap into the market growth being created by the construction of many new apartment and office buildings in need of wood products.

She also said that local buyers had turned their back on furniture products from China, providing still more opportunities for local makers to expand.

But Dang Quoc Hung, vice chairman of the association, said local firms needed to improve operations in order to expand. He said less than 20 out of the group’s 311 members had achieved steady sales growth on the domestic market.

Experts at the event said domestic furniture makers would have to set up better sales and distribution networks on the local market.

Export slide

While the possibilities for domestic growth were lauded, the prospects for exports were grim.

Vietnam’s furniture exports were expected to shrink by 30 percent to US$1.3 billion in the first half of this year due to declining global demand, an industry representative said.

Vietnam exported $940 million worth of furniture and wood products in the first five months of the year, nearly a 20 percent decrease year-on-year, according to the General Statistics Office.

Vietnam’s furniture exports to European markets would continue to slow as the region’s economic recovery is expected to take longer than the expected US rebound, according to Vo Truong Thanh, chairman of the Truong Thanh Furniture Corporation.

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The Vietnam Green Building Council (VGBC) has introduced a pilot project offering green building certification for property projects around the country and calling for developers to join the program for energy saving and greener surroundings as a contribution towards sustainable development.

The green building assessment scheme Lotus will rate property projects green based on energy, water and material savings, waste and pollution minimizing, health enhancement for occupants and impacts on the surroundings.

Speaking at the Windsor Plaza Hotel in HCMC on Wednesday, Yannick Millet, managing director of VGBC, said that Lotus was based on international systems and was adapted for property projects in Vietnam.

Lotus is like other green certification systems such as LEED, BREEAM in the United Kingdom, Green Star in Australia and Green Mark in Singapore.

Millet said that VGBC was being applied as a pilot version on some buildings, among them the United Nations Green House in Hanoi, which will be the first project given green Lotus certification. Other projects to be considered include the Six Senses Hideaway Resort in the central coast city of Nha Trang, Indochina Capital’s project on Con Dao Island and an office building called Center Point in HCMC.

Millet said that Lotus would target office and apartment buildings, schools, hotels and factories.

According to VGBC, a green design will reduce energy consumption by 30%, water by as much as 50%, carbon footprint by 35% and the cost of waste treatment by 50% to 90%.

Millet said that VGBC would send experts to help project developers meet the green criteria and that green designs required a shared vision from developers, design teams and contractors.

VGBC said that the cost for membership would be on a sliding scale.

VGBC is a non-government organization established in July 2007 and is endorsed by the World Green Building Council in Canada and the Construction Ministry. (SGT)

Chairman of the National Assembly Economics Committee Nguyen Duc Kien spoke to Viet Nam Economics Times about recent recovery in the real estate market.

Why has there been a spike in land prices for certain projects, with price ranges increasing from 30 to 40 per cent over those at the beginning of 2009?

The increase in price of real estate property is due to two reasons. Firstly, the Government stimulus package for real estate business has come into effect and revived the real estate market.

Secondly, the demand for property is on an upward trend, but the construction of real estate projects is still very slow, which might imply that the increase in land’s price is a consequence of the mentality of people wanting to buy land rather than the real demand for land.

However, it’s easy to recognise that the rise is contradictory to the Government’s policies of social security, such as building houses for low-income earners and the poor.

Therefore, we must determine whether the price rise stems from investor speculation or from the surge in costs for construction materials, which forced enterprises to raise property prices.

Can it then be said that the real estate market’s recovery is a bit abnormal?

Besides people’s demands, the increase in prices of construction materials such as steel, iron, cement, stone and sand also resulted in these lifted home costs. But the increase is not strong enough to push property prices to the levels where they are now. It is clear that the increase is abnormal.

Many people now use their free capital to buy and sell houses through middlemen and property transaction centres, which easily leads to speculation.

In addition, another reason is that real estate investors in urban areas are taking advantage of the relaxed conditions in the Government’s stimulus package to lift up house prices.

How should authorities and people react to the market’s current performance?

To control speculation, we should issue tax policies aimed at property companies, intermediary centres and transaction centres rather than trying to apply administrative management.

Through house-purchasing contracts, authorities should impose taxes to manage the operations of property transaction centres.

At the same time, by imposing the taxes, we will be able to see how real estate prices increase.

When using intermediary methods to buy houses, people should study clearly the rights and responsibilities of real estate middlemen. This will help them avoid fraud.

To regulate the real estate market more efficiently, the Ministry of Construction is building indices of the market, including prices, transaction volumes and types of commodities to create a foundation for people and enterprises to make purchases and wise investment decisions. (VNS)

Landlords are more concerned with filling office space than looking for the best rental rates, as corporate tenants are seeking aggressive cost reduction plans.

Richard Leech, executive director of CBRE Vietnam, said that landlords were keen to secure reliable incomes, offering lower rents, capital contributions and free rent periods to attract quality tenants for longer leases.

The CEO Tower in Hanoi’s Pham Hung road is offering rental prices of $25 to $40 per square metre a month, excluding tax, which is 10 to 20 percent lower than the levels the developers and marketing agents had planned last year.

“Our main concern now is filling the building with tenants, hopefully in three to five months, rather than looking for the best prices,” said Doan Van Binh, CEO Holdings’ president and chief executive officer. “We have leased 20 percent of the building’s space, including two long-term tenants,” he added.

For long-term tenants, defined by fixed 48-year contracts, the company offered a price of 27 million dong ($1,500) per square metre, excluding tax.

“Strategic investors who are financially strong will find this deal more attractive than investing in condominiums, as they can buy off a whole floor at less than 15 billion dong ($830,000) and earn substantial profits just by leasing out at the same price that we’re offering,” Binh said.

CBRE Vietnam last week signed on to be the sole marketing and management agent for CEO Tower, which is developed by CEO International and will be completed in July. The tower will provide 13,000 sqm of office space for lease, spanning across 27 floors.

Leech said that being the first higher-end office building in the market this year had given CEO Tower many advantages, and its business outlook would get better towards the end of the year as the market recovered.

CEO Tower offers 500 to 630sqm per floor and allows a maximum of three tenants per floor. It also features two basement floors for parking. The building is located in a highly developing area, where plenty of office buildings have been cropping up.

Leech said that the office market in Hanoi was slowing down, with rising vacancies and falling rents, mostly because of fewer new entrants. However, “it is a good time for tenants to take spaces at reasonable prices, something that Hanoi has lacked for many years,” he said.

Two other grade-A buildings were expected to come online this year downtown, including Capital Tower on Tran Hung Dao street and Bidv Tower on Tran Quang Khai street, with a combined stock of 46,000 sqm. Proposed rents for these two buildings are expected to be between $50 and $60 per square metre per month.

Vacancy rates in Hanoi’s grade-A office buildings were around 3%, but the level in grade- B buildings had reached 2%, as market supplies ha increased over the last couple c months. (Dau Tu)

Saigon South is confirming itself as HCM City’s new business and entertainment hub with the launching of the area’s first ever luxury shopping centre.

Kim Cuong Limited Company (paragon), a joint venture between Khaisilk Corp and Thuy Loc Corporation, last week launched Saigon Paragon Shopping Centre at Phu My Hung new township’s Nguyen Luong Bang Street.

Having the total investment of $35 million and standing out in the heart of the area thanks to Japanese-designed western classic architecture, the property provides more than 19,000 high-end retail space located from the first basement B1 to the fourth floor and 4,000 sqm of entertaining area including Megastar cinema system, digital world, and spas in the 5th floor. It also features 3,000 sqm fine dinning area, 6,000 sqm parking lot with the loading capacity of 400 cars, 15,000 sqm office space for lease ranging from the 6th to the 9th floors, and a 3,000 sqm conference mall in the highest 10th floor.

Hoang Khai, Paragon chairperson said at the launching ceremony that “more than 90 percent of retail space area has been occupied and will be 100 percent covered when construction work is perfectly finished in early August.”

Phu My Hung new township has total area of 409 hectares with some 100,000 people in its original planning, said Khai, adding that with the area’s fast-developing pace in recent years, its total population was estimated to reach 10 million people in the next 10 years.

The developers expected to get return over investment in the next 8?10 years, adding that rent price of office space might be start at $20 per square metre.

Khaisilk is working on the residential apartments of Peninsula Palace and the high-end resort of Royal Residential in the same area of Phu My Hung. Both properties are slated to start construction in August to be finished in the next 14-18 months. (Dau Tu)

Home to world natural heritage site Halong Bay and the key economic hub of northern Vietnam, Quang Ninh province is offering investors lots of investment opportunities.

Halong Bay’s charms have landed it many global admirers

While Vietnam is emerging as one of the most attractive investment destination, Quang Ninh is also on the radar screen of many international investors looking to invest in Asia.

In recent years, Middle East investors have started to eye Vietnam as a good investment destination with coastal Quang Ninh province, about 180 kilometres northeast of Hanoi, a great site for investment projects.

United Arab Emirates-based Tamouh Investment LLC, in August 2008, signed a memorandum of understanding with Quang Ninh People’s Committee for studying investment projects in the province.

According to Quang Ninh People’s Committee, Tamouh will draw-up plans for investing in a seaport and oil refinery project, a highway project connecting Halong city and Mong Cai town and a university to provide skilled workers for the United Arab Emirates.

Early this year, Limitless LLC, a business unit of Dubai World, announced it had raised the investment capital for its Halong Star Hotel project, which was started to be built in 2007, from $220 million to $550 million.

Philip Atkinson, regional director for Limitless in South East Asia, said Quang Ninh had great land for investment, adding that the company would further expand its investment in the province to tap that potential.

During the visit of Prime Minister Nguyen Tan Dung to the United Arab Emirates in February this year, Limitless signed a memorandum of understanding with Quang Ninh authorities to invest in the Mac Dynasty Lagoon project. In its plans, Limitless would develop the project as a multi-functional industrial park, urban and entertainment complex.

Nguyen Van Thanh, director of Quang Ninh Planning and Investment Department, said the province’s leaders were aware that the province had huge potentials for investment projects and it was widely opening doors for investors, especially foreign businesses.

Bordering with Lang Son, Bac Giang, Haiphong and Hai Duong provinces and Chinese Guangxi province, Quang Ninh is now the third economic hub of northern Vietnam, after Hanoi and Haiphong. The province also owns the largest coal deposits in the country.

Vietnamese government saw Quang Ninh as a part of the pivotal economic development triangle of Hanoi-Haiphong-Quang Ninh in northern Vietnam, that would drive northern economic development.

Due to its favourable geographic condition and giant coal mines, Thanh said, Quang Ninh was a good place for developing seaports, shipbuilding and heavy industrial projects.

He said that not only Middle East investors studying investment opportunities in Quang Ninh, many other domestic and foreign investors also came for developing investment projects.

Currently, US-based AES Corporation is preparing documents to build a $1.4 billion Mong Duong thermoelectricity plant in Quang Ninh. Meanwhile, another US company, SSA Marine, joined hands with Vietnam National Shipping Lines to invest in Cai Lan international container port.

Quang Ninh Planning and Investment Department revealed that Chinese Fosun Group was planning to build a steel manufacturing plant with total annual capacity of about five million tonnes in the province Thanh said in the future, the province would continue encouraging investors to invest in the industrial areas like shipbuilding, energy, steel manufacturing and cement.

“With the advantage of position and seaports, investors could save a lot of transport costs when they manufacture products in Quang Ninh and export them to international markets,” said Thanh. Recognising that many investors are eyeing investment potential in Quang Ninh, the province’s leaders announced they were pushing infrastructure development so as to meet investors’ requirements.

In next few years, a series of transport systems would be upgraded or newly built. For example, the province will upgrade Mong Duong-Mong Cai road, which links Quang Ninh to China’s Guangxi province. Van Gia seaport will also be built while the province is seeking approval from the government for developing the international Van Don airport.

Furthermore, transportation from Hanoi to Quang Ninh will be more convenient as the government is planning to build a highway linking Hanoi’s Noi Bai International Airport and Quang Ninh’s Halong city, expected to be operational in 2015. As the province is trying to improve its transport infrastructure system, some investors have built industrial infrastructure.

Two years ago a domestic joint venture including Vietnam Shipbuilding Industry Group, Vietnam National Coal-Mineral Industries Group, Vietnam National Oil and Gas Group, Bank for Investment and Development of Vietnam broke ground of the large Hai Ha seaport and industry complex.

The province and the joint venture announced that the $18 billion complex would offer good infrastructure for investors embracing shipbuilding and ship-repairing, steel manufacturing, oil refineries and urban development. Furthermore, Cai Lan, Hai Yen, Viet Hung and Dong Mai industrial parks offer good infrastructure conditions for investors.

But Quang Ninh is not only favourable to investors in industry sector. Home to Halong Bay, one of the nicest bays in the world which have been recognised as a world heritage, Quang Ninh is also an ideal destination for investors to develop tourism projects.

Halong Bay covers an area of 1,553 square kilometres including 1,969 islands. There are many soil islands, caves, grottoes, beaches, beautiful landscapes enabling the development of attractive tourist sites of various types.

According to Quang Ninh Planning and Investment Department, about 4.4 million tourists visited Quang Ninh in 2008. In the first quarter of this year, the number of tourists was 678,000, a 23 per cent increase against the same period last year. The department estimates number of tourists visiting Quang Ninh could be around 4.8 million people this year despite the economic downturn impacting Vietnam’s tourism sector.

“That proves the attractiveness of Quang Ninh tourism potential,” Thanh said, adding that many tourism investment opportunities had not been explored in Quang Ninh.

In May this year, Song Da Urban & Industrial Zone Investment and Development Joint stock Company broke ground of its Song Da Ngoc Vung eco-tourism project in Quang Ninh.

Like United Arab Emirates’ Tamouh and Limitless, American Rockingham Group is planning to invest in a tourism project at Halong Bay, including villas, a five-star hotel and a golf course. It also proposes to build a casino.

Besides that, Quang Ninh is calling investment for developing an entertainment complex in the province’s Van Don Economic Zone, covering an area of about 300 hectares. (VIR)