Vietnam’s real estate and construction industries have been characterised by turbulence and upheaval during the last decade. Promising beginnings gave rise to a boom period, which reached its peak around 2007, and then proceeded to take the form of a bubble, which inevitably burst. Today, there are some significant hurdles to be overcome before things begin to move again towards realising the huge potential that clearly exists in the Vietnam property sector.
The relatively bleak status of the real estate and construction industries generally does, however, present a wealth of opportunities for canny investors who are patient and willing to expend the effort that is necessary to examine and assess whether or not available opportunities fit the investors’ investment objectives.
Prices have started to reduce significantly in both the commercial and residential real estate markets. Reducing prices, together with developers coming under pressure from their bankers, give rise to an increasing pool of viable site opportunities. The enforcement of security by local banks in relation to non-performing loans (NPL’s) within the real estate sector has historically been slow, but due to the high levels of NPLs, even some of the most recalcitrant of local banks are enforcing their security over property development projects. In particular, foreign investors who are not reliant on local funding sources in Vietnam are increasingly able to secure sites and development opportunities at prices being fractions of what they were two or three years ago.
The Government has announced financial policies designed to stimulate the real estate and construction industries, which include reducing corporate income tax, providing those on low incomes with an opportunity to buy houses, and encouraging banks to provide more loans with lower interest rates. The new Law on Land 2013 and its guiding and implementing legislation, provide some much-needed clarity and consistency to the law in these crucial sectors.
Acting for one of Japan’s leading property companies in relation to its acquisition of one of Saigon’s premier Grade A office buildings.
Acting for one of the largest real estate funds in Vietnam on a complex deal involving the establishment of a multi-billion dollar joint venture to develop a 1,500 hectare integrated hotel and casino resort project in Vietnam.
Acting for a leading property development company in Vietnam on its entry into the retail leasing market by way of developing numerous shopping centres.
Acting for a major Singaporean investment firm in respect of its entry into a significant property development joint venture with a State owned enterprise in Vietnam, comprising a combined residential, commercial, and retail multi-purpose complex.
Acting for the property arm of a major South East Asian sovereign wealth fund and a large Japanese property development fund on their joint investment in numerous major commercial and residential property development projects in Vietnam.
Acting for one of the largest real estate funds in Vietnam on a complex deal involving the establishment of a multi-billion dollar joint venture to develop a 1,500 hectare integrated hotel and casino resort project in Vietnam. Frasers was required to assist its client with documentation including the shareholders agreement, put option agreement, gaming licence agreement, casino management agreement, international marketing agreement, licence agreement and consultancy and advisory agreement. Numerous multinational parties across different jurisdictions were involved.
Acting for a high profile client to set out various options/structures for an offshore lender to extend funding to a Vietnamese real estate developer which is partially owned by special purpose vehicles in another jurisdiction. Frasers identified a number of options for review by the client, together with the advantages and disadvantages of each structure.