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.

Indochina Company Limited has announced it will launch sales of 30 luxury apartments at Indochina Airport Tower, 1.2 km from Tan Son Nhat Airport in HCMC’s Tan Binh District, on January 9.

Pham Thi Oanh, deputy project manager of Indochina Airport Tower, told the Daily on Tuesday that each of the 145-square-meter apartments cost VND31.7 million per square meter, not including value-added tax.

Oanh said the 13-story tower was developed by Indochina Group with investment capital of VND1.2 trillion. The tower includes a swimming pool, automated parking, a gymnasium, a restaurant and green space.

About 30,000 luxury and mid-range apartments, mostly in HCM City, will be released on the property market late this year and early 2010, according to a recent survey.

The survey by Colliers International Consulting Company showed signs of the property market’s recovery and an associated return of realty developers trying to attract more customers by year-end.

A large number of real estate projects are planned to start before year-end including Khang Thong Apartment and Belleza in District 7, An Phu Plaza in District 2 and 584 Lilama SHB Plaza in Go Vap District.

In mid-November, Dia Oc Dat Xanh Joint Stock Co in collaboration with Giang Dien Tourism Co invested VND450 billion (US$24.4 million) to develop Giang Dien Waterfall eco-tourism area into a high-grade village resort.

Dia Oc Dat Xanh Co said it started a residential building project in Go Vap District early this month and plans at least four more property projects before Tet (lunar new year).

Do Thi Loan, general secretary of the HCM City Real Estate Association, said besides the State’s support policies, many property developers found their own ways to quickly overcome the economic crisis.

“The property market is recovering slowly but solidly,” she said.

Huynh Du An, deputy general director of Novaland Co said the investors had returned after a period of “relaxation and waiting” caused by the crisis. Ho Chi Minh City with the country’s top rate of urbanisation and crowded population continues to create opportunities for domestic investors.

He predicted that from now until 2012 would be the best period for the Vietnamese property market.

The property consultant CB Richard Ellis forecasts that from now to the end of next year, there will be 22,500 apartments up for sale in HCM City.

VietNamNet/Viet Nam News

Thanh Nam Investment and Construction Joint Stock Co (Cotana— HNX-coded CSC) officially started the construction works of a 21-storey building of apartments, trade centres and offices at 671 Hoang Hoa Tham St, Hanoi on December 26, 2009.

The Infrastructure Investment and Development Co, under Viglacera Corp was the project’s main investor. It’s considered the first project to start a series of projects in Cotana’s business plan in 2010.

The total value for the project was 114 billion dong. It’s expected that the construction works for this bidding package conducted by Cotana will last for 450 working days,, starting from the date when the investor hands over the ground for the contractor.

Vietnam’s apartment market is expected to maintain its red-hot feel in 2010.

Savills Hanoi director Matthew Powell said the apartment segment would remain hot, because supply was limited and demand would remain high amid a backdrop of rapid urbanisation.

“We can say that Vietnam’s property market is a shifting one. However, Savills looks forward to an exciting 2010, with Vietnam positioned to take full advantage of the economic recovery,” Powell said.

Local investors, said Powell, would remain active over the next 12 months, with a growing number of transactions completed by foreign investors.

“Despite all the challenges investors may face, opportunities are available. However, to succeed they should always complete thorough due diligence before committing funds, employ experienced professional consultants with a long-term Vietnam presence, consider working with an experienced local development partner and open an office in Vietnam,” he added.

Marc Townsend, managing director of the CB Richard Ellis, said the residential market would offer good investment returns.

“It is obvious that housing for people with low incomes has always been a hot topic. For people with an average income, demand for houses always exists at a high level. Nonetheless, demand for premium apartments is also considerably high,” he added.

Townsend said in a recently released CBRE report that the market was exciting as demand had come back in a big way with most of projects recently launched in Hanoi such as Mulberry Lane and Le Van Luong Residentials selling all units.

Townsend said individual investors saw residential sector as good investment and that’s why there was strong initial interest by investors.

He added that projects which had reasonable prices would attract end users who have real demand for accommodation.

Andrew Brown, country head of Jones Lang LaSalle, said over 2010 and 2011 Vietnam’s residential market would be heavily favoured by investors.

Brown said sensible development would stop the market from hitting saturation point.

Townsend said investors should multiple income classes and provide housing for different target markets.

Savills figures show that in Hanoi, from the end of 2009 up to 2012, it is estimated that there will be at least 10,000 apartments launched.

Of those, nearly 34 percent will be in Tu Liem district and approximately 30 percent in Cau Giay district. In HCM City, about 87 planned projects are expected to come to the market in the next three years.

Savills predicted that if these planned projects arrived on schedule, the total supply of apartments for sale would double.

District 7, exploiting the advantage of the Phu My Hung new urban town, will contribute about 26 percent of HCM City’s future supply.

Districts 2 and 9 have the advantage of an improving transportation system, available land and the presence of a hi-tech industrial park in District 9 that is being developed. According to Savills, these two districts could be the main suppliers for the HCM City apartments in the mid-term and account for about 25 percent of the southern hub’s future supply over the next three years.

Vietnamese people seeking to purchase homes during the Tet sale season, prefer those worth less than one billion dong due to economic woes suffered in 2009.

Hung Tri, a banking officer, disclosed said that he is trying to purchase a house before Tet in February 2010. The requirements Tri has set up for his future home are simple: it must be small (50-60 square meters), worth less than one billion dong and not too far from the city center.

According to Thien Nhan, an An Nam real estate broker, many buyers now have similar requirements.

Nhan said that apartments price at 10-16 million dong per square meter are being hunted down by clients. Real estate experts believe that it is now an age of cheap apartments and they predict that prices may increase slightly by 5-10 percent in the future due to the high demand.

Real estate trading floors in HCM City noted that projects caughting the eye of prospective buyers are Tan Mai in Binh Tan District, E.Home in District 9, Phu Loi and Carina in District 8, Hoang Anh 2 in District 7, The Mansion in Binh Chanh District and Le Thanh in Binh Tan District.

Common characteristic of the projects are the low prices of 12-17 million dong per square meter.

On the ACB Real Estate trading floor, two real estate projects with “soft prices” have been put on sale, An Phu apartments in District 6 and the second phase of Le Thanh project in Binh Tan District. Le Thanh’s apartments are priced at 480 million dong, affordable for many people.

Having realized the high demand for cheap houses, investors have begun to fund low- and medium cost apartment projects.

Construction of 584 Lilama SHB apartment bloc and Saigon Lilama SHB Town have both been kicked off. The former is expected to become operational in August 2011, while the latter is expected to have 340 apartments with areas of 55-82 square meters once operational.

According to Lilama SHB General Director Le Tan Hoa, Saigon Lilama SHB Town is the apartment bloc for medium and above medium income earners and is expected to sell at 12 million dong per square meter.

Anh Tuan Housing and Construction Company stated that it also plans to initiate some low cost house projects in HCM City and other provinces. Of these projects, one in Nha Be District will kick off later this year. These 520 apartments with areas of 70-95 square meters are expected to sell at 12-13 million dong per square meter.

VietNamNet/DTCK

A project to build a new urban area named Kim Van-Kim Lu in Hoang Mai district, Hanoi has just passed by the Hanoi People’s Committee, according to Director of Vinaconex 2 Do Trong Quynh.

The town will be located on the third road belt of Hanoi, 1 km away from the junction between Khuat Duy Tien and Nguyen Trai with a total area of some 27 ha.

The project that costs nearly VND 1,500 billion will spend VND 386.2 billion in restoring sites for construction and erecting synchronic infrastructure, and invest the rest in construction of 6 high-class apartment buildings, 3 office and trade towers and 3 buildings for low-income people.

According to the investors, the company will pay special attention to sub-projects like school systems, a cultural house, sport and entertainment facilities.

The project is expected to kick off in the first quarter of 2010 and will finish in 5 years’ time.

The property market in the central coast city of Danang might be less busy than in HCMC, but the tourism property segment there is burgeoning offering both hi-end and low-end products, said the market researcher Savills Vietnam.

Projects to build villas for sales are emerging quickly in the region, and in the next couple of years, there will be significant villa and resort developments along the Son Tra – Dien Ngoc coastal road from Danang to Hoi An, the company said.

Savills says villas are mainly developed in Ngu Hanh Son and Son Tra districts, and as of the third quarter of this year, there had been about 218 villas for sale from six projects and 630 apartments for sale from three projects.

Highlighted projects whose products have been launched onto the market include The Ocean Villas, Hyatt Regency Danang Resort & Spa, and Blooming Tower among others. This quarter will soon witness Furama project invested by Ariyana Company with 134 villas for sale.

There will be 13 projects along Danang City’s beach with 670 villas expected to enter the market in the next few years, plus 15 apartment projects providing some 7,600 apartments to the market until 2015, the market research company projected.

In another segment, the office market in the city has witnessed considerable changes in the last few years, with many office buildings springing up to meet the increasing demand of both local and international enterprises.

Savills reported that there were 19 office buildings with a total floor area of about 62,500 square meters launched onto the market in the last quarter of this year. Office rents are ranging from US$6 to US$15 per square meter per month, but a few other buildings such as Indochina Riverside Tower and Danang Software Park have rents higher than US$15 per square meter per month.

However, due to the impacts of the global economic downturn, the occupancy rate at office buildings has decreased quite a bit in the last quarter compared to the second quarter of this year, according to the research company.

Savills anticipates that some 143,000 square meters of office space will enter the city’s market in the next five years. Around two-thirds of the office space will be situated in the key districts of Hai Chau, Son Tra and Thanh Khe.

In another sector research, the company shows that the retail market in the city is still in its infancy as shopping in traditional markets and small retail street-front shops remains the preference of the majority of residents.

However, there were some major retail properties supplying some 114,000 square meters to the market in the last quarter of this year. Retail space rents are widely ranging from US$18 to US$50 per square meter per month, according to Savills.

The company forecasts that the city’s retail sector will see 16 retail projects coming on stream over the next four years, mainly trade centers and supermarkets, with total floor space of some 260,000 square meters.

Nova Real Estate Joint Stock Co (Novaland), a subsidiary of Novaland Real Estate Investment Group plans to carry out the construction work on HCM City-based Sunrise City Complex, using the capital of 1.922 trillion dong corporate bonds with deposit term of five years and coupon rate of 12 percent per year that have already been issued successfully.

The high-rise complex of apartments and trade centre will be built on a site of 5.2 hectares on Nguyen Huu Tho St, Tan Hung Ward, Dist 7, HCM City, including 14 towers with total investment capital of over $500 million.

After its completion in 2012, Sunrise City will provide 1,804 modern, high-class apartments to the market and a trade centre of 70,000 square metres.

Lately, Vietcombank has already signed contract with Novaland to purchase over 5,000 square metres in Sunrise City trading centre for setting up the banks South Saigon branch, the second largest branch of Vietcombank in HCM City.

At present, Novaland is conducting the third sales session of about 500 apartments in four towers of V2, V3, V5 and V6 for the investors.