Spanish airport builder Garuda Group is expected to pump some US$15 billion into the construction of three world class airports in Vietnam, according to the Vietnam news agency’s report.

Following an agreement signed in Ho Chi Minh City on Wednesday, the airports are the International HCM City-Long Thanh Airport, costing US$6 billion, the new Ha Noi International Airport (US$8 billion), and the Chu Lai International Airport in central Vietnam with an investment capital of more than US$1 billion.

The investments will make Garuda the biggest foreign investor in the country so far, the Vietnam news agency said. Garuda group is an airport/seaport builder, manager and consulting company.

Long Thanh airport will be about 43km from the hub of Ho Chi Minh City, is expected to generate 5,500 permanent jobs for Vietnamese workers after construction.

Chairman of the Aviation South East Asia Giuliano Koenigsberg said the company would carry out the feasibility study and map out a master plan for Long Thanh project jointly with Viet Nam’s Southern Aviation Corporation.

Last month, the Garuda Group also reached an memorandum of understanding (MoU) with the Airport Design Construction Consultancy to set up a joint venture to build the new Ha Noi International Airport, its biggest project in Vietnam.

“It will be the largest and the most modern airport in Asia. It will be designed by multi-national companies from Spain and Italy to reflect (Vietnamese) culture and aspirations,” Koenigsberg said.

The foreign partners include Spanish Galo Architects and Italian AIG. The airport would have two heliports, a hospital, school, apartments and hotels.

After completion it is expected to generate 10,000 permanent jobs.

“The Government will grant Garuda management and operation rights for 30 years, to be extended by 10 years under certain circumstances, to cover the cost of project execution and to repay principle debts,” the news agency cited Koenigsberg sa saying.

Construction of the Ha Noi airport was expected to be carried out in three stages, the first from next year run until 2015 at a cost of US$4 billion, the second from 2015-18 would cost US$1.5 billion and the last phase would cost US$2.5 billion.

Phase one would accommodate 480 flights a day and 35 million passengers a year. Capacity would grow to about 850 flights daily and 62 million passengers annually by 2025 and to 1,096 flights daily and 80 million passengers annually by 2035.

“The new airport is due to replace the overloaded Noi Bai International Airport, which will likely be relegated to domestic flights only,” Koenigsberg said, adding that Noi Bai has reached its capacity at over 15 million passengers annually.

Last month, Garuda Group also agreed with the Middle Airport Corporation to establish a joint venture to build Chu Lai International Airport in the central province of Quang Nam. It was expected that Chu Lai would be larger than neighbouring Da Nang Airport.

“Spanish enterprises are ready to come here and we see potential in trade and investment between Spain and Vietnam,” he said.

Chu Lai had an annual capacity of 2.25 million passengers and 1.5 million tonnes of cargo by 2015 and 4.1 million passengers and 5 million tonnes of cargo by 2025.

Koenigsberg said Chu Lai was chosen because it was an important gate to central Viet Nam and was near Dung Quat and Chu Lai economic zones, Hoi An and the seaports of Ky Ha and Lien Chieu.

The group set up an office in Hanoi last year, providing consulting, investment and construction services for infrastructure projects, market surveys, trade and others.

The office will promote co-operative projects between Spain and Viet Nam. It also intends to set up an office in HCM City.

(BERNAMA)

Vietnam plans to spend VND28.13 trillion ($1.52 billion) on building a 3,041-kilometer long road along the country’s coastline, the government said in a statement Thursday.

The road is being built with an aim to effectively use the country’s resources, boost socioeconomic development and enhance national defense, it said.

The government will spend VND16 trillion on the construction of the road from now to 2020, and the rest after that, it said.

Vietnam has a coastline of 3,260 kilometers.

With huge potential development, Binh Dinh is proving its role in pushing economic development in the central region. According to the Binh Dinh People’s Committee, the province’s economic growth in 2009 reached 7.96 per cent.

Of which, the agriculture, forestry and fishery sector grew 7.3 per cent, the industrial and construction sector grew 7.43 per cent and the service sector grew 11 per cent.

“Binh Dinh kept high growth last year amidst the economic difficulties in the country. This implies that our province is emerging as an economic hub in the central region,” said Le Huu Loc, vice chairman of the Binh Dinh People’s Committee.

Binh Dinh is 300 kilometres south of Danang and 600km north of Ho Chi Minh City. The province is said to have huge potential to be a driving force for economic development in the overal central region. According to the annual Provincial Competitiveness Index conducted by the Vietnam Chamber of Commerce and Industry and the United States Agency for International Development, which reflects the quality of provincial investments and their business climate, Binh Dinh was ranked 11th in 63 provinces nationwide in 2008 and it jumped to the 7th position in 2009.

Binh Dinh’s Quy Nhon seaport is one among the busiest ports in Vietnam. Last year, the port was reported to handle about 4 million tonnes of cargo, much higher than Danang port—the existing largest port in the central region. Due to its favourable geographic position, Binh Dinh is on the radar of many domestic and foreign investors.

“With its advantageous geographical position and bright economic oultlook, Binh Dinh is a good place to make investments,” said Nguyen Thanh, director of the An Phu Thinh Joint Stock Company. Thanh’s company is now developing a large commercial centre in Binh Dinh. Furthermore, his company plans to build a multi-million dollar residential and tourism project in the province.

According to the Binh Dinh Planning and Investment Department, the province has so far received 33 foreign invested projects with total registered capital of about $420 million. The projects’ investors are from the United States, Japan, China, Korea, the United Kingdom, Singapore, Malaysia, Germany, Thailand and Australia.

The Hong Kong-based Hong Yeung Company is also developing a $30 million industrial park in Binh Dinh’s Nhon Hoi Economic Zone. So far—although the park is still under construction—four foreign investors have registered to build their factories inside the park, with total investment capital of about $100 million.

Wood processing is an attractive industry in Binh Dinh. The province has 400,000 hectares of forests that can provide materials for wood processing plants. So far, more than 110 enterprises have invested into this industry in Binh Dinh and they can export about 22,000 containers of wood furniture on average each year.

Binh Dinh government announced that it would continue encouraging investors to invest in wood processing industry over the next few years. Loc said that the province was also expanding public investments in infrastructure projects to improve its investment climate.

“Although we have been actively improving the infrastructure network and business climate in Binh Dinh, the quality of licenced projects are still below our expectations and the development of some investment projects remain at slow pace,” Loc said. According to the Binh Dinh Planning and Investment Department, some domestic and foreign investors were delaying construction of their projects due to the impacts of the economic slowdown.

Binh Dinh authorities recently revoked investment certificates of the Gemadept Corporation, which had registered to build Nhon Hoi seaport. “In the future we will be very careful in selecting investors for developing projects in Binh Dinh,” Loc said.

While property developers from Japan, Korea and other countries are holding off on investments in Vietnam, Singaporean developers are stepping up their involvement in this country.

Singapore-based Keppel Land International Limited last week announced it had signed a joint-venture agreement with Tien Phuoc Company to develop an 11 hectare waterfront residential site for 175 villas along the Saigon river in Ho Chi Minh City.

This is the second agreement Keppel Land has signed with Vietnamese partners this month. Ang Wee Gee, executive director and chief executive officer of Keppel Land International Limited, said the project would serve the growing middle class, “who have become more discerning in their choice of residences and where they set up their businesses”.

Keppel Land previously entered into a joint venture with Tien Phuoc and another partner, Tran Thai, through its wholly-owned subsidiary Flemington Investment Pte Ltd to develop a residential area in District 2.

Another Singaporean property developer, Sembcorp Parks Holdings, last week also broke ground at a 1,600ha integrated township in the northern city of Haiphong through the Vietnam Singapore Industrial Park and Township Development Joint Stock Company (VSIP), a joint venture with Becamex IDC Corporation.

The integrated township, once completed, will comprise a financial centre, commercial belt, shopping malls, hotels and medical centres. VSIP expects the township to meet the needs of about 150,000 residents.
At the groundbreaking ceremony, VSIP signed a memorandum of understanding with another Singaporean developer, GuocoLand Vietnam Company Limited, to build a residential area on the site.

GuocoLand Vietnam is also building the $50 million The Canary commercial and residential project at VSIP I Industrial Park in the southern province of Binh Duong. At the same time, investors such as Japan’s Riviera Corporation and Intra Corporation and Korea’s IGS Capital have delayed their investments in Vietnam due to the global financial crisis.

In a recent meeting with the Ministry of Planning and Investment, a senior leader from Keppel Land said the rising demand for accommodations in Vietnam was offering lots of opportunities for property developers.
Last November, Keppel Land launched the Riviera Cove project, comprising a total of 96 villas in District 9. Company officials said that about 48 of the development’s 60 select villas were sold within a month. The company was also considering new investments in the north, especially in Hanoi.

CapitaLand, a Singaporean property developer, last week also signed a joint venture agreement with Hoang Thanh Investment and Infrastructure Development Joint Stock Company, to jointly develop a 14,000 square metre residential site in the new Mo Lao urban area in Hanoi.

Liew Mun Leong, president and chief executive officer of CapitaLand, said the company was confident in the growth prospects of the Hanoi real estate sector, as it was supported by healthy economic growth, rapid urbanisation and a young and growing population.

“Vietnam is our fourth pillar of growth after our core markets in China, Singapore and Australia. We target to grow our business in Vietnam to 10 per cent of the group’s total assets, up from the current 1 per cent, over the next three to five years,” Liew said.

In October 2009, CapitaLand started pre-sales activities for one of the five towers at Mulberry Lane – its first project in Mo Lao – and all 330 units were fully booked in less than two days. The units were booked at prices between $1,350 and $1,700 per square metre.

A rumor that a famous American actor and a well-known overseas Vietnamese singer visited a developing condo project in HCMC’s District 2 as potential buyers has drawn the attention of many people. Some local newspapers last week sent reporters to the site in the hope of vouching for the accuracy behind the rumor.It is still not known whether those celebrities have toured the condo project, but the project owner has been successful in marketing the Diamond Island Sky Resort which is offering apartments worth millions of dollars each. With transactions down in the local luxury apartment segment and with low- and mid-end apartments selling, this information has surprised many people.

Not located on a remote island as one may think, the Diamond Island Sky Resort is under construction on an eight-hectare islet separated from the mainland by an iron bridge which is being used to transport building materials to the project. Standing close to the new urban town of Thu Thiem, it will take some ten minutes to drive to the city center when the East-West Highway and the Thu Thiem Tunnel are put into service.

The project owner, Binh Thien An Real Estate JSC, says it has invested some US$350 million to turn the islet into a complex of four blocks of high-rise buildings with some 1,000 apartments and villas from 80 to 750 square meters each. The project, scheduled for completion by late 2012, broke ground last June after two years of legal procedures and design. The complex will also include a boutique hotel with some 150 guest rooms. The project owner invested some US$2.5 million to buy a cruiser to market the project as a high-end property, as well as to serve residents and customers with pleasure-boat demand.

Nguyen Kim Son, business development director of the company, says some 300 apartments and villas among 485 units in the first phase are being offered from US$300,000 each and certain villas in the Sky Villas block are being offered from US$3 million each.

Talking about potential buyers, Son said the company had narrowed its market segment to well-to-do people and then invited short-listed potential customers to the introduction of the resort project. In its sales program last year, the company launched 100 apartments targeted at local people. This year, the company expects to sell 100 apartments.

Another luxury apartment project, the Sunrise City under progress near the new urban town of Phu My Hung in HCMC’s District 7, is relying on celebrities to market its condos. Pop singer Cam Ly bought a million-dollar 400-square-meter apartment there.

Sunrise City, with investment capital of US$500 million, is being developed on a five-hectare site and has three sections with 14 high-rise buildings from 31 to 35 floors. When in place, the luxury condo project will provide some 1,800 Grade A apartments and penthouses from 700 square meters each.

The project developer, Novaland Co., says it is offering apartments for sale and most of the response is from wealthy business people and celebrities in the entertainment industry.

Marc Townsend, managing director of market research company CB Richard Ellis Vietnam (CBRE), in a presentation at the five-star InterContinental Asiana Saigon last week, forecast that the local property market’s super-deluxe segment would emerge this year and begin to attract serious attention with condos offered for US$10,000 per square meter and villas worth US$3 million each.

According to CBRE, some 12,700 luxury and high-end apartments, some 10,380 mid-end apartments and some 5,000 low cost apartments are expected to be launched this year.

Townsend predicted that the property market would see fierce competition due to excessive supply of units in and around HCMC, some three times higher than the number launched in the last two years. However, the affordable and mid-end segments will continue to dominate the property market this year.

The central coast city of Danang has been seen as a favorite destination for tourism property developers as the second home segment enjoyed positive feedback last year. Villas and condominiums worth from several hundreds of thousands to millions of dollars attracted many investors and buyers. However, several tourism property projects are gearing up to share this narrow segment, offering more choices for investors.Marc Townsend, managing director of CB Richard Ellis Vietnam (CBRE), predicted an increase in second home market stock this year and said Danang might see diminished demand due to strong supply and the rise of other locations around the country.

For example, the tourism property project Saint Simeon was launched late last week with luxury villas built along the 600-meter beach in Phuoc Tinh Commune in Long Dien District in the southern province of Ba Ria-Vung Tau.

Nguyen Thu Huong, executive director of Rung Duong Company, the project owner, said at the launching held at La Cantine Restaurant in HCMC on Saturday that the company would invest US$50 million to develop the 7.5-hectare complex.

Huong said the first phase of the project would start building 36 ocean-view villas from 774 to 1,450 square meters each. These villas are designed with a private swimming pool and the complex will include a restaurant, bar and spa.

The project owner says it will start the second phase this quarter to build a five-star hotel with 100 rooms. Both phases are expected to be up and running by Q3 of 2011. The third phase of the project will build 60 apartments from 120 to 250 square meters each.

Huong said the complex would be managed by the Singaporean management firm Careers Hospitality and that infrastructure was under construction and a model villa would be launched in mid-February.

According to CBRE, villas in the Saint Simeon project are from US$830,000 to US$1.85 million each, or from US$1,800 to US$2,200 per square meter, depending on location.

In another tourism property project in Ba Ria-Vung Tau Province, Kim To Service and Trading Company broke ground Saturday to build a villa section at the famous Binh Chau natural hot spring some two kilometers from Ho Coc Beach in Xuyen Moc District.

The developer says it will invest VND470 billion to build 160 villas and service and entertainment facilities within 36 months.

Thanks to being located near the hot spring, the developer is wooing potential buyers with a pipeline system to carry hot spring water to each villa.

Townsend of CBRE projected that the central coast resort town of Nha Trang would enter the second home market with condominium projects to be launched this year. Mui Ne in Phan Thiet City will become a superstar this year with tourism property projects offering multiple opportunities for home ownership, golf and beach vacations.

The Sunshine Hill Villas project in Phu Hai Ward, Phan Thiet City has launched to the market 139 villas from 384 to 523 square meters each with prices starting from US$250,000.

Townsend said foreign buyers were no longer the main consumers of these homes and target buyers would be locals from HCMC and the capital city of Hanoi.

The Vietnamese government has just approved a proposal to build a 2,400-megawatt coal-fired power plant in Hai Ninh and Hai Chau communes, Hai Hau district, Nam Dinh Northern province to help meet the country’s increasing demand.

The plant is a Build Operate Transfer (BOT) joint venture between Hoang Anh 05 Shipbuilding Industry Joint Stock Company (Hashinco) and South Korea’s Taekwang Vina Industrial. It will operate within 25 years.

Director of Taekwang Vina Industrial, Mr Park Yoen ChaPark said that the Company is negotiating with relevant agencies of the country in the matter of electricity trading, saying that the upcoming plant will making around 25 billion USD during its operation.

Taekwang Vina Industrial is expected to complete the first stage of the plant in 2017 (with the capacity of 1,200 megawatt) and the second stage in 2021 (with the same capacity of 1,200 megawatt).

The ratio of capital contribution for the project is 95% for Taekwang Vina Industrial and 5% for Hashinco.

Prime location and luxury furnishings were the major reasons that help the developer ask for such high prices, said a Novaland salesman.

A manager at Novaland said singer Cam Ly had purchased a 400sq.m apartment priced at over $1 million while singer Dam Vinh Hung had registered to purchase a 700sq.m penhouse apartment worth $5 million at Sunrise City.

Nguyen Kim Son, director for Development and Business at BTA Investment Management Viet Nam Co developer of the Diamond Island project in HCM City’s District 2, said the project’s Bloc B, which is now under construction, would provide 300 apartments, including 10 worth between US$2 and $3 million each. Apartments worth over $1 million would account for 25 per cent of the project, he said.

The Diamond Island Project is a complex of residential and hotel buildings covering nearly 8ha area near the Sai Gon River and the Giong Ong To Canal in District 2’s Binh Trung Dong Ward. The project includes 1,100 apartments ranging from 86sq.m to 615sq.m in space, with one to four bedrooms each.

BTA said all its $3 million apartments and 40 per cent of those that cost between $1 million to $2 million each had been pruchased. Seventy per cent of the buyers of these luxury apartments were locals or overseas Vietnamese and the remaining 30 per cent were foreigners, the company said.

“The country now has many nouveau-riche people who are looking for multi-million dollar apartments,” Son was quoted by the Sai Gon Marketing newspaper as saying. He added most local buyers were well-known personalities.

Son said the standard multi-million dollar apartment would have high-end equipment and luxurious inner decorations, private swimming pools and memberships in yacht clubs.

Meanwhile, a sales agent at a property company who declined to be named said all the above statements were just advertising gimmicks.

He said the developers of serviced apartment projects in HCM City such as Blooming Park, the Vista, Sai Gon Pearl and Estella, had found it difficult to sell penthouse apartments at these buildings which are priced at over VND10 billion ($540,000) each. Tighter control over bank loans aimed at discouraging real estate speculation is one of the reasons that make customers reluctant to buy such luxury apartments, he added.

Truong Quoc Hung, head of the marketing group No. 2 at Phu My Hung Co said the company’s Riverside Residence project includes a number of apartments with a housing space of 554sq.m that are priced up to $1.23 million each. He said it was difficult to seek buyers for these luxury apartments and the company was yet to sell even one of them.

Colleges demand fees in dollars

Many students at local universities in the country are complaining that they are being asked to pay tuition fees in the US dollar or in dong at the black market exchange rate. In a letter sent to online newspaper VietnamNet last month, a student at the Ha Noi University of Industry’s International Cooperation Faculty said their tuition fees had been raised from US$470 for a training course in the beginning of the school year to $520 in early December.

The letter said in the previous year, when the exchange rate stood at VND18,400 a US dollar in the market, students paid VND17,500 for a US dollar as announced by the State Bank of Viet Nam. But now they were being asked to pay fees at VND19,500 per dollar, the current black market rate.

The students’ families had to “move heaven and earth” to cough up the VND11 million ($540) because the school asked them to pay it in just 20 days from the beginning of the course, the letter said.

Tran Van Thanh, deputy chief of the Ministry of Industry and Trade’s Personnel Department, said no regulations had been issued about collecting tuition fees in US dollars.

Nguyen Van Ngu, head of the Ministry of Education and Training’s Planning and Finance Department, agreed with Thanh, but added some schools could collect tuition fees for the programmes jointly carried out with foreign partners.

However, he also said that if fees are collected in US dollar, they must be calculated at the prevailing official rate.

In addition to the Ha Noi University of Industry, many private universities and foreign language training centres are also collecting fees denominated in US dollars.

For instance, a student at the Friendship University of Technology and Management has to pay tuition fees of nearly VND9 million per month. To attain a degree at the FPT University’s IT Department, a student has to pay $8,800 for the 4-year course.

The situation may change next school year (2010-11) with the Ministry of Education and Training announcing last Saturday that universities and colleges must publicise monthly or annual tuition fees and all these must be mentioned in Vietnamese dong.

Lam Dong curtails golf course

Residents’ complaints and Governmental pressure have prompted the People’s Committee of cental Highland Lam Dong Province to cancel four of 10 golf course projects that it had licensed previously.

In a document issued last week, the provincial administration asked district authorities and relevant agencies to conduct an overall review of golf course projects in the province.

It also asked the provincial departments of Planning and Investment, Natural Resources and Environment, Agriculture and Rural Development and Culture, Sports and Tourism to oversee the implementation and progress of the projects after licensing.

Golf course projects which do not begin implementation 12 months after licensing as well as those do not become operational 48 months after that will have their licenses revoked.

District authorities and agencies have also been asked to monitor construction work on licensed golf course projects to ensure that the area is used for projects to support the golf courses’ operations. Construction of housing and other properties for sale has been banned in the areas granted for golf course projects.

According to figures from the Ministry of Planning and Investment, as of July 2009, the provincial authorities had licensed up to 10 golf course projects which took up 6,551 ha. Local investors are behind six of these projects that have a total registered capital of US$770 million.

But out of these 10, only one, in Da Lat, is up and running. The other nine projects in Bao Lam, Don Duong and Duc Trong Districts have only broken ground so far.

Although golf courses take up huge amounts of land and capital, local governments and residents stand to gain little from them.

Under a Government decision issued in November 2009, the country had 89 golf courses with each 18-hole course taking up less than 100 ha by 2020 a reduction from 144 projects totally covering 49,000 ha licenced by the end of June 2009.

Deputy Minister of Finance, Tran Xuan Ha, led a Vietnamese delegation to offer bonds in Hong Kong on January 18, in London on January 19, in Boston on January 20 and in New York on January 21.

The issuance of these bonds is in line with the Government’s resolution and the Ministry of Finance will fix their maximum interest rate at 7 percent per year over 10 years.

The mobilised capital will be used as loans for the Vietnam Oil and Gas Group, the Vietnam Maritime Corporation, the Da River Corporation and the Vietnam Machinery Assembly Corporation (LILAMA), to invest in the Dung Quat Oil Refinery Factory and two hydroelectricity projects and buy transport ships.

Earlier, in October 2005, Vietnam successfully issued Government bonds overseas worth a combined capital of US$750 million with an interest rate of 7.125 percent per year.

CBRE will be the sole leasing agent to introduce anchor tenants for the retail podium of Mo Market.

Vietnam Construction and Import-Export Joint Stock Corporation and CB Richard Ellis (Vietnam) have signed a strategic contract in which CBRE will be the sole leasing agent to introduce anchor tenants agreed by both parties for the retail podium of Mo Market.

Mo market complex will be built in place of the traditional wet market that existed in this location for many years without renovation. The old market was in poor condition and didn’t meet environmental sanitation and fire safety requirements. The project follows the general trend to revitalize former wet markets into sophisticated retail complexes in Hanoi. Some other projects located in favorable area such as Hang Da market, Cua Nam and Nga Tu So market are also the evidences of this trend in the Hanoi retail market. The completion of these projects is consistent with the demand of Hanoians today with higher living standards calling for convenient & safe shopping environments and simultaneously improves the efficiency of land utilization in these lucrative locations.

Mr. Le Minh Dung, Investment Director at CBRE, stated: “Until now, retail space has not met the demand in Hanoi especially in the CBD. The completion of the Mo Market is expected to increase the total supply, narrow down the supply-demand gap in the Hanoi retail market and also provide more options for customers.”

The Mo Market complex is developed from an old wet market area on busy Bach Mai Street in the densely populated Hai Ba Trung District. The market can be easily accessed from Minh Khai and Bach Mai roads. It comprises of two towers and a retail podium: one 15 storey Grade-A office tower on the north of the project, one office & hotel tower on the southeast of the project with smart and luxurious design making it an impressive and prominent building at the interchange of 2 main roads. The 5 floor retail podium connecting the two towers integrates the office and hotel towers.

The podium has a floor area of 24,000m2 and is designed for a high class department store and international-standard facilities. In addition, 5 large basement levels within the project are sufficient for all necessary parking requirements.

The project developer, Vietnam Construction and Import-Export Joint Stock Corporation, also expressed confidence and optimism on the cooperation with CBRE and the prospects of the Hanoi retail market in the future.