Global Investors Assess Vietnam’s Domestic Real Estate Market

By: CBRE

• Foreign investments in Vietnam are on the rise

• Retail and Office Spaces in Ho Chi Minh City are in high demand

• Rents are rising in both residential and retail spaces in Ho Chi Minh City

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When discussing the most dynamic emerging markets globally, it’s hard to lose sight of Vietnam. Driving its strong economic growth is an expanding middle class with thickening wallets. Rapid urbanisation supported by a young, growing and educated population all bode well for an economy with one of the world’s fastest growing GDP rates. With robust growth momentum, the World Bank has projected that Vietnam’s GDP will expand by 6.8% in 2018. Understandably, this has fueled the appetites of global investors looking to make their mark in Vietnam’s burgeoning domestic real estate market.

Home to Asia’s best performing stock market in 2017 and the second largest retail market in 2018, much of the appeal Vietnam currently holds sits, ironically, in its auspicious future. Since 2015, the bulk of big-ticket M&A transactions we’ve seen have been championed by those investing in property development sites, followed by hotels, apartments and offices. This is testament to the fact that those pouring money into Vietnam are in it for the long run.

Year-on-Year Increase in Foreign Investment in Vietnam

Over the last three years, foreign investment in Vietnam’s real estate market has been increasing year-on-year. In particular, developers from Singapore, Japan and Korea have favoured development sites in downtown areas and within close proximity to Metro Line stations. Local developers usually enter into joint venture agreements with foreign developers on the premise of optimizing decision-making in site sourcing and project management.

CBRE

Can Supply Equal Demand in Ho Chi Minh?

Running alongside the strong demand for commercial sites is the relative shortage of supply, which is especially prevalent in the market for prime retail and office spaces in Ho Chi Minh City and Hanoi. Grade A rents in Ho Chi Minh City have increased from about US$35 per square meter per month (psm/month) in Q2 2016 to US$43 psm/month in Q2 2018, which translates to a healthy 23% growth. Similar office rental growth has been observed in Hanoi over the past two years. In the office market, an increasing presence of international firms has resulted in developing areas absorbing the overflow of occupants. But, progress in office construction has been pleasing and the second half of 2018 will bring a significant amount of Grade A office supply onto the market.

Another area generating solid demand is the residential sector, and this segment of the market stands to inject further momentum in the economy – to illustrate, the largest IPO this year was that of a luxury residential developer in which Singapore’s sovereign wealth fund GIC recently acquired a stake. Investors from Singapore, Hong Kong and Taiwan have shown much enthusiasm in the serviced apartment and condominium markets, together representing 75% of total buyers in the buy-to-let market. As a whole, foreign buyers accounted for 50% of all successful residential deals. What this tells us is that foreign investors are not merely entering Vietnam to set up operations, they are committed to keeping their money here. This could explain the 15% rise in prime residential prices in Ho Chi Minh City over the past two years.

Thanks to governmental efforts to ease restrictions on foreign holding of public companies, the future just got brighter. This allows the composition of the economic landscape to diversify and encourages foreign ownership of commercial assets – thereby creating additional demand for real estate and increasing the rate at which Vietnam outpaces its fellow “BB” rated peers in economic growth.

Is This Growth in Vietnam Sustainable?

Given the parallels we can draw between the Vietnamese and Chinese stories, you might begin to speculate how sustainable demand and overall economic activity are. A differentiating factor Vietnam boasts is the relatively equal dispersion of wealth compared to other developing nations. And, to understand why else investors would be inclined to stay in Vietnam, we need to think in reverse. With a government that has publicly expressed the need to improve productivity and lower transaction and logistics costs, businesses are better equipped in attracting investors not only to individual companies and projects but to the wider market.

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As concerns about credit tightening and geopolitical uncertainties remain, it’s easy to see why there may be some speed bumps in the short term. But, escalating trade tensions between the US and China have prompted companies to shift production to Southeast Asia in a bid to circumvent levies. Vietnam, which is a major exporter of apparel and electronics, has benefitted from this shift of low-cost manufacturing away from China.

Further, as the 2015 real estate market recovery shows, the occasional market correction is good news in the long run. And, we only need to look at the largest transactions this year – for major office, residential and retail sites, all backed by foreign capital, to gauge the fervor foreign investors have in Asia’s rising star.

© 2017, CBRE, Group Inc. CBRE Limited confirms that information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt their accuracy, we have not verified them and make no guarantee, warranty or representation about them. It is your responsibility to confirm independently their accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 450 offices (excluding affiliates) worldwide. CBRE offersa broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com or www.cbrevietnam.com.

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By: Molly Headley

Duplicity in the Market

Real estate loans are officially on the decline, but do the numbers speak the truth?

Two major regulatory changes caused investors to cool on real estate loans.

After the property market deteriorated between 2008 and 2013, in large part due to speculative buying followed by unsuccessful investments, the government enacted several measures, including raising the assessed risk of real estate loans to decrease lending, as reported by The Vietnamese Investment Review.

In early 2017, the State Bank of Vietnam (SBV) tightened conditions even further by requiring banks to handle outstanding bad debts, especially those in the area of real estate. The State Bank also demanded that banks project a realistic growth of approximately 10 percent, in order to ensure sensible development in the market.

As a direct result of the stricter regulations there was a drop in real estate loans last year, according to the National Financial Supervisory Commission (NFSC), but recent information has shown that the numbers may be skewed. While lending for home loans has dwindled consumer loans have skyrocketed. How do these two types of loan classifications correspond and why is it relevant?

Real Estate Loans Hiding In Consumer Lending?

Some borrowers may be taking out consumer loans to buy their homes as well.

According to state finance regulator the National Financial Supervisory Commission (NFSC), consumer credit has typically been used to purchase home appliances or pay for home renovations and repairs. However, an unexplained shift upward in the relatively stable level of consumer debt has regulators puzzled. Purchase and repair loans made up 52.8 percent of the total consumer loans in 2017, compared to 49 percent in 2016.

real estateImage source: cdn.newsapi.com.au

Some experts believe that this points to real estate loans being hidden within consumer loans. In reporting in June 2017 by Vietnam News, representatives from commercial banks said “they currently classify home repair loans and home purchase loans as consumer lending so that lending is not restricted.”

For the moment there is no concrete regulation against classifying home repair and home purchase loans as consumer loans but this may be the next step for the SBV.

Moody’s, a credit rating agency, wrote that “[t]he increased risk weight is credit positive for the banks, as it will help limit their appetite for lending to this high-risk sector...” Moody’s analysts also acknowledged that certain banks will have to limit their association with the real estate market.

real estateImage source: static1.squarespace.com

The turn of phrase in Moody’s report is especially pertinent now. The appetite that the banks have for real estate lending does not seem to have been tempered by the strict new regulations. But the history of the real estate market in Vietnam proves that rapid lending in this sector is filled with uncertain prospects and that a boom in high-risk lending can put not just the banks but the entire Vietnamese economy in jeopardy.

No Crash in Sight But Bad Debts May Increase

Vietnam News wrote that “[i]f lending is not controlled well, with home purchase loans not based on real demand but for speculation, the country will suffer from a real estate bubble and the economy will be unstable ...”

However, the fears may be blown out of proportion. Viet Anh Nguyen, co-founder of FINGO, a start-up company in Vietnam that helps connect consumers to the right type of loans for their needs, said this type of loan misclassification is unlikely to topple the financial system but it does pose serious risks for the consumer.

real estateImage source: sylviagutierrez.com

Nguyen explained that consumer credit lending is much less regulated than mortgage-based loans because of the size of the loans. Consumer loans are capped off at VND1 billion or USD43,900. Real estate loans can go into the millions.

“The higher the loan is the more the banks are checking”, Nguyen said.

Nguyen acknowledges that there may be real estate loans that are misclassified as consumer loans but these are likely for moderately priced properties in the rural market, in the villages and for cheaper land. In HCMC and Hanoi, VND1 billion is not even 30 percent of the market, where the cheapest apartment in a new development sells for USD1,500 per m2.

According to Nguyen, a market crash is unlikely based solely on these small loans, however, they do augment the debt cycle. Since consumer borrowers may be considered less reliable, the banks charge a very high interest rate, ranging from 13 to 40 percent. In addition, Nguyen reveals, the repayment average is very short, from one to five years depending on the bank’s policies, so borrowers are hit with a high monthly payment.

The interest rate can easily turn a loan that started out at VND15 million into a loan of VND25million. Some borrowers find themselves in a situation where they can’t repay their first loan and are forced to take out a second loan to settle the debt. This can put the borrower in a precarious financial state.

Video source: Fingo Vietnam

To address this FINGO runs a series of consumer education classes, in order to help potential borrowers choose the right type of loan for their income. For the time being, the risks of taking out the wrong kind of loan are a danger just to the individual rather than to the broader financial system.

Banner Image source: dichvunganhang.org


By: Tran Thi Minh Hieu

Vietnam is expected to remain one of the world’s most attractive markets for foreign investment in 2018, especially the real estate sector.

fdiImage source: cdn-images-1.medium.com

According to the Ministry of Planning and Investment, the total registered foreign direct investment (FDI) is US$5.8 billion, indicating a decline of 25 percent compared to the year prior in the first quarter of 2018. Meanwhile, FDI spending experienced a year-on-year increase of 7.2 percent. This year it was US$3.88 billion.

The real estate sector is one of the biggest FDI recipients. In the first quarter of 2018, real estate was the third-highest attractor of FDI with US$486 million worth of registered capital, equaling 8.4 percent of the total registered capital. FDI inflow in the real estate sector continued to be behind that of the manufacturing and processing sector (US$3.44 billion) as well as the retail and wholesale sector (US$531 million).

A series of major FDI-funded projects conceived last year are expected to be carried out in 2018, such as Dai Phuoc Lotus in Ho Chi Minh City by the China Fortune Land Development; Future Otis Hotel in the central city of Nha Trang by Taiwanese P.H Group; and apartment projects in Ho Chi Minh City by CapitaLand.

fdiImage source: static.tapchitaichinh.vn

Ho Chi Minh City has been the largest recipient of real estate FDI in Vietnam. According to Ho Chi Minh City Department of Construction, in 2017, the city had attracted US$1.01 billion worth of FDI in the real estate sector alone, equaling 43.4 percent of the total FDI inflows of the city.

The large amount of FDI in Ho Chi Minh City’s real estate market is attributed to improvements in the infrastructure system and administrative procedures, a growing middle-class population, and a stable economy.

In a recent survey by the real estate consulting firm Savills, Ho Chi Minh City has been ranked third out of 50 cities worldwide for property rental growth and fifth in terms of investment prospects.

At the same time, the FDI inflows in the real estate market in Hanoi have been more modest compared to that of Ho Chi Minh City. Only a few number of projects in Hanoi received investment from foreign groups such as Ciputra, Gamuda Land, Hanoi Garden City, Park City, Booyoung Vina, Daewoo Cleve, and The Manor Central Park.

fdiImage source: static.tapchitaichinh.vn

However, according to real estate company CBRE, many foreign investors have started to pay special attention to the northern real estate market, particularly Hanoi. This year, the US$4 billion smart city project in Dong Anh District, Hanoi, will begin construction. The project is jointly led by BRG Group and Japan’s Sumitomo Corporation Group.

The project involves building a smart city with a modern transport system using the latest technologies. This huge construction project is expected to heat up the real estate market in Hanoi.

The northern real estate market of Vietnam is also expected to experience growth in the coming year. Alex Crane, General Manager of Cushman & Wakefield Vietnam, said in a recent market report that 2018 would carry a significant increase in FDI in the northern market.

Investors from Asian countries, including Japan, South Korea, Singapore, Hong Kong and Mainland China, have been reported as the biggest foreign investors in Vietnam.

Most of the major merger and acquisition deals in 2017 were led by Asian investors. For example, VinaLand Ltd, managed by foreign-owned VinaCapital, sold all of its stake in Vina Square to Tri Duc Real Estate Company.

Hongkong Land signed an agreement to develop Thu Thiem River Park with HCMC Infrastructure Investment. Creed Group from Japan has taken over the Lacasa project that was initially invested by Van Hung Phat Real Estate.

Meanwhile, Western investors seem to be less active in the real estate market. They tend to focus on real estate related services like managing office buildings, resorts, hotels, serviced apartments, and shopping malls.

According to Savills Vietnam, market differences such as local rules and legal issues could prevent these investors from participating in Vietnam’s real estate market.

Video source: DJSharks71

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By: City Pass Guide

Your company is moving. Should be easy enough, right? Just get the goods from one place to the other?

If your solution to this problem is giving your staff a few boxes and a few days, you've already made your first mistake.

“A common mistake we see is not realizing how long things might take to pack”, Crown Relocations Country Manager Jamie Rossall said.

crown relocations

Rossall’s moving team advises creating a moving process that mirrors theirs: give your staff moving crates at least a week in advance and slowly start packing the nonessential items—old company records, removal or disposal of old furniture, etc.—so you don’t leave everything to the last minute. Giving yourself time to make the move correctly is the best approach to creating a smooth process.

Moving as an Act of Kindness

This step—the part of the move where you and your staff actually start moving your company’s things—ought to be one of the last stages in an extensive preparation process. Crown Relocations has a novel suggestion for your first step: use empathy.

“One of the first things we want to know is the reasons for the move, is it a good reason or a bad reason”, he said.

Why?

If the company is moving in response to something negative, “We may be seeing people lose their jobs, we need to be empathetic.”

If the move is happening for positive reasons—because the company is growing, or because a great year has allowed for bigger, better digs—this is a chance to create a positive experience within the company by celebrating it. Moving is then an asset that can be used to “sell” the company to the employees, the often overlooked first customers. Understanding the reasons for the move will help companies create a process that’s sensitive to the state of the client.

crown relocations

Crown Relocations makes it a priority to understand the reasons for the move so that they can create a process that’s sensitive to the state of the client. The company can help ease the pain of moving or even turn it in to an opportunity to enhance the business’ internal culture.

The company can help ease the pain of moving or even turn it in to an opportunity to enhance the business’ internal culture.

The Knowns and Unknowns

So you’ve decided to move and all stakeholders—leadership, staff, building managers—are all on the same page. Everything’s packed, so the next step is go, right?

Perhaps because moving is seemingly simple, the process only seems like it’s a matter of pack and go. What’s missing are the myriad of questions that arise during the relocation, like whether the elevators will be operational at all times and whether there will be others moving at the same time, a common problem if you’re moving into a new building.

Here’s an obvious block you don’t want to stumble over: did you know that you shouldn’t write labels on the top of the moving box but instead write the identifying information on the side where it can always be seen even if the boxes are stacked?

How about instead of just any old box, you move your company’s important assets in sealed crates, which are barcoded to track them throughout their transition to the new site? The furniture and other large items that migrate with them are similarly barcoded.

Crown Relocations has been active in Vietnam since 1993. In Rossall’s time working with the company, he has personally seen a variety of weird and bizarre problems emerge in the moving process that would stump a less prepared mover. One such story involves the relocation of a bank. All was going well with the move until the moment that it was realised that the new location had not been approved by Vietnamese authorities, a necessary step for financial institutions in the country.

Moving only seems simple until you consider all the unknowns you have to account for as well as the ones you haven’t considered yet.

Complete Contingency

It’s not only Crown Relocations’ years of service but also its resources and capabilities that set it apart as a mover.

crown relocations

In the situation above with the marooned bank, Crown Relocations offers what it calls “hot rooms”. These are temporary office spaces that the movers’ can set up instantly so they’re ready on the next business day. In this way the business’ operations can continue without break. All the essential personnel that need a working space and access to internet can operate from this stopgap facility as long as needed. The equipment and property that the company doesn’t immediately need during this time would be warehoused until the move is finalised.

On another occasion, Crown Relocations was navigating a move that was suddenly halted with company’s standard-sized moving van had run afoul of a regulation prohibiting large vehicles. The mover then requisitioned the appropriately sized vehicles and continued the relocation change with little delay.

Put simply, that’s experience and expertise you either have or have to hire.

A Complete Process

Moving your company is a task you ought to take as seriously as any of your other businesses’ projects, and it deserves to be managed like one.

Crown Relocations’ service starts with a survey of the moving company’s items, a study of the original location and the new venue, and a presentation of the move as a project.

“Based on their timeline and what they need, we would put together another presentation that’s fit to share with every single member of their staff”, Rossall said. That way, “every single person, no matter what their role, understands their responsibility during the entire process.”

On moving day, each sealed crate and piece of company property goes through a four-checkpoint system—leaving the building, entering and exiting the transportation, and entering the new building—which tracks each item through a unique barcode as it heads to the new location.

Once in the new location, the items are placed according to a floor plan that has been designed with the client and company. If desired, Crown Relocations’ movers can unpack at the new location as well.

Crown Relocation’s sealed crates are recycled and retired responsibly after they’ve served their function.

It’s a very robust process, but the moving company has streamlined it into an expeditious one. Rossall said that our own City Pass Guide offices—with a modest staff of about 20—could be brought to a new location in a matter of a day. For a larger scale move of 500+ employees, the relocation could be done in a weekend in order for the company to resume working on Monday.

The choice is simple: you can either move on your own and hope everything goes smoothly, or you can hire folks who know what to do when it doesn’t.

Image source: Crown Worldwide


By: City Pass Guide

Co-Working Spaces Multiplying for Millennials

Normally, co-working spaces (CWS) feature a communal workspace with a shared reception, meeting rooms, access to high-speed Internet, printing and copy machines and cafeterias. Most of these amenities can be rented for a fee.

But the design of the co-working space depends on the needs of the clientele. Some venues have extra amenities such as food and beverages, art galleries, game rooms, beds and auditoriums to set themselves apart from the increasing crowd of CWS popping up in HCMC and Hanoi today. These communal spaces enhance the concept of flexibility, collaboration and diversity as well as appearing more attractive to prospective and current tenants.

In Vietnam, there might be another thing that you notice besides the office-cum-café atmosphere—the people filling the desks are largely under the age of 35. A study by CBRE Research Vietnam in 2017, found that 91 percent of co-working space members are millennials. This proportion is much higher than the global average of 67 percent and reflects Vietnam’s young demographics.

co workingImage source: ttgvn.com

Many of these young professionals are freelancers—more than 50 percent worldwide, according to a Deskmag survey in 2012. In 2017, CBRE Research Vietnam estimates that 54 percent of users in Hanoi and Ho Chi Minh City are either the founders or employees of startups, while approximately 14 percent are freelancers and self-employed. These startups include both local and overseas firms.

The study also found that more than 55 percent of CWS users work in the IT industry, with the remainder spread across various sectors including tourism, food and beverage, education, marketing and real estate.

Cost-efficient Options in Major Cities

In both HCMC and Hanoi, the number of CWS has grown exponentially. As of April 2018, there are 19 CWS in Hanoi and 15 CWS in HCMC, which is a 62 percent increase from 2017. By the end of 2018, both cities are expected to have a total of 45 co-working spaces.

Co-working spaces usually charge per person rather than by square metre like traditional offices. The main options include flexible desks, fixed desks and private offices. For flexible desks, rent is charged on a daily or monthly basis, while for the other two options, a monthly rate is applied. Some co-working spaces may also offer hourly rates for non-members. The advantages of this system are that users of CWS are not tied down to a rental contract or office mortgage. They also enjoy the freedom of changing locations if they so choose.

Video source: Livin That Life

The cost of renting a co-working space varies across cities. Co-working spaces in Hanoi and Ho Chi Minh City are currently priced lower than most other cities in the Asia Pacific region, which reflects the general cost advantage of renting office spaces in Vietnam. In HCMC, as some co-working space operators have expanded into the central business district area in the beginning of 2018, pricing for private offices reportedly increased from 30-50 percent in venues in prime locations.

Most co-working spaces are operated by major local operators, such as Toong, UP, Circo and Dreamplex but smaller operators are also opening rapidly, growing from 30 percent last year. Foreign entrants such as NakedHub from China and Hive from Hong Kong have started to make their mark on the market as well. Hive plans to open one more venue in the centre of HCMC by the end of 2018 and NakedHub will launch two venues in HCMC and Hanoi. Other international CWS operators are also looking forward to entering Vietnam in the next 2 years.

Targeting Their Niche Markets

In the past, CWS in Vietnam have not been located in prime buildings or areas since operators needed to keep rental costs at a manageable level. They’ve usually been found in underutilized buildings in decentralized locations, especially on the fringe of the central business district.

Office buildings are typically categorized with a rating of Grade A being the highest and Grade C being the lowest. Both Toong and Up operate their centres from buildings that are rated at B or below. In Hanoi, a few CWS have located themselves in Cau Giay district, an emerging office cluster, while CWS in HCMC tend to be more spread out on the outskirts of District 1, 2, 3, 4, Binh Thanh and Phu Nhuan.

co workingImage source: i.pinimg.com

Recent developments pointed out that CWS operators are now changing their game and focusing on targeting their niche customers, which will dictate where they will be located.

For example, since Toong offers their spaces to a diverse number of clientele working in different industries, the design of their spaces is getting more differentiated.

Circo, in particular, has always been more interested in getting a prime, convenient location for their members. So as they have been expanding, their venues are finding their way in to well-connected traffic-hub locations, making it easy for their clients to get to and from downtown.

UP co-working spaces are generally geared towards startups, which means they are more conscious about places where younger start-ups are more likely to be. For example, UP collaborated with the HCMC University of Technology for a co-working space and incubator, where they also offered legal advice and HR-sourcing services.

Looking forward, the CWS movement in Vietnam will continue to expand in terms of supply and niche-offerings to their targeted tenants. Foreign CWS operators are aggressively trying to find space, especially in Grade A office buildings as well as in upscale Grade B buildings in prime central business districts, in order to establish both their branding and market shares within Vietnam.

HCMC and Hanoi are both neck and neck in terms of demand. Operators reported a general 75-80 percent average occupancy rate as of April 2018. This high level of demand as well as the fact that the market is still relatively new compared to counterparts in other APAC nations, create opportunities for upcoming merger and acquisition activities among local and foreign co-working spaces.

co workingImage source: CBRE

Banner Image source: officesuitestrategies.com


By: J.K. Hobson

Vingroup subsidiary Vinhomes JSC, Vietnam’s biggest and most successful property developer, has chosen four foreign banks to assist with its plan to go public with a US$1 billion listing of its residential property business, according to Reuters. Bloomberg reports that it could be the biggest first time share sale ever.

Vingroup has turned to Citigroup, Deutsche Bank, Morgan Stanley and Credit Suisse for the proposed initial public offering of Vinhomes.

vin groupImage source: vinhomeshcm.vn

A press release from Vingroup states that the proposed transaction “marks a strategic step for Vingroup, as it continues to expand its reach and diversify its shareholder base to a wider set of investors.”

Past Success

The new IPO follows last year’s listing of Vincom Retail Joint Stock Company, Vietnam’s largest shopping mall operator, which is also a subsidiary of Vingroup and raised about USD$700 million.

Vinhomes JSC currently manages 10 projects, which are comprised of almost 18,000 apartments, villas, and shophouses, according to Vingroup’s recent annual report. Included in these properties are Vinhomes Royal City in Hanoi, and Vinhomes Dong Khoi in Ho Chi Minh City. Vingroup’s shares have increased in value over 83 percent in the past year, bringing the company’s overall market value to US$9.1 billion.

vin groupImage source: images.ndh.vn

We spoke to a representative of Vingroup who chose not to be named about its recent success. “Vingroup's share price has tripled in the past 12 months” to VND132,000 per share. The representative wrote that the stock has “taken over Vinamilk's crown as the largest market cap [belonging to any] company in Vietnam.

“Vingroup also has a very good history of successful IPO[s] with VRE [Vincom Retail Joint Stock Company] in Nov 2017 which will obviously attract[ed] a lot of attention.”

The newest “IPO is expected to even surpass VRE's record as Vietnam[’s] equities and properties market[s] are both doing extremely well this year, propelled by strong economic growth and business reforms.”

Emerging Opportunities

What does all of this mean for the everyday people of Vietnam? Our source at Vingroup says that it makes at least two things clear. “One: Vietnam is an attractive destination for business and investment. Opportunities are there for both entrepreneurs and investors.”

“Two: We might have hope that Vingroup will continue to develop more high quality living environment[s] for the Vietnamese people, (maybe targeting ... middle income people like VinCity projects) … [and] helping with the urbanization progress of Vietnam's biggest cities.”

When asked about challenges to the development of the IPO, our source explained that according to current regulations, foreign ownership of a company is limited to 49 percent, but that the current IPO only applies to a fraction of outstanding shares.

Just last November Vingroup acquired Vincom Retail (VRE)—the biggest trading center in Vietnam—listed on the Ho Chi Minh City Stock Exchange (HoSE). As a result of this event, Vingroups’ shares rose sharply for the second half of 2017, making it the top gainer in the market.

vin groupImage source: datxanhhaiphong.com

Vinhomes JSC’s share sales are just a part of Vietnam’s overall strong economic growth. Forbes magazine announced that Vietnam’s economy is set to grow by a 6.7 percent, while the Asian Development bank forecasted a growth of 6.5 percent. Even the conservative and cautious World Bank estimates that this year’s growth will surpass that of last year.

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