Everything You Need to Know About Real Estate in HCMC

By: Patrick Gaveau

We sat down with property experts Mauro Gasparotti and Rudolf Hever from Alternaty (Alternaty.com) for a deep exploration of Ho Chi Minh City’s real estate scene.

Mauro GasparottiMauro Gasparotti

Do you think Vietnamese people as a whole have a different perception on land value?

Mauro: Yes. Valuation is probably the most important and sensitive subject for Vietnamese. I think the true definition of value, which is what a willing buyer and seller would pay for is not applicable. It’s more of what the people are asking for next door.

The other thing that affects the value is the process of the acquisition of land, the years of pain of getting the land from a certain status to a much more sellable status. From a valuation point of view, foreigners don’t consider this when they come in. You could spend years on relationships and a lot of money to get this land, so there is a mismatch to what a normal developed country would perceive as value and what the Vietnamese think of it. Vietnamese want to get paid for this process, and that’s why a lot of development comes at such a high prices, because this would make the project feasible.

The Vietnamese also put a future value into the asking price. They put what the value will be in 5-10 years time, they try to put the growth of the country as a factor. It’s a long exercise to understand value from both sides. For Vietnamese it’s what has been the history they needed to go through to get to this point where they can sell the land; for foreigners it’s what the price is that would make their project feasible on this land.

There’s no transparency. That’s why the big guys like Vincom who get the land easier can also move the process along faster than the single developer who has spent 10 years trying to get the approval and now he wants to get paid for this 10 years.

Photo by Pullman Saigon Centre

Is there in your experience any other country that is similar to Vietnam in the market’s disregard to value?

Mauro: Myanmar. We have been asked to open an office there. I clearly saw the dynamic of the market when I was there. Nobody can tell the real value of the land, everybody is relying on the future value it, as well as how easy it is to build on it, how clean it is - also a lot of corruption in the back. That’s when you see speculation, you see a bubble, you see overpriced land, and not many transactions. And now you see an oversupply in the hotel business; two years ago there was an undersupply. Vietnam is past this stage now and much better than before.

Cambodia is different. It’s easier to get the land process approval. You know exactly how much it will cost you, so Cambodia is an easier market to do business with, and they rely on foreign business as well.

Is the average land value in the primary streets in HCMC overvalued?

Mauro: Yes, but if you asked me this question five years ago I would have said yes as well, and now the value is 30% more, so I was wrong then. I could be wrong now. The reality is that if I run a cash flow model on any commercial property, and I pick US$20,000 per square metre of land, there’s no way I’ll recover from that.

However, because of this barrier of entry, it will always keep your commercial property high in terminal value. If you look at the hotel business for example they badly need 3 and 4 star international branding. But then you look at the land price and it’s not very feasible to pay US$20,000 per sq m if your room rate is US$70.

But you're more likely to sell your end product for a premium. So you pass this high price on this land to the high price on your building. The whole system works somehow on this high land value, high barrier of entry in District 1, and then high value on the completed building. So somehow, I am sure, there are certain projects that are actually feasible.

Then you go outside a bit of District 1 - District 3, near the airport - the land price drops a lot, but still pretty high, but it’s feasible. Noise is another story [laughs].

Photo by Tri Nguyen

Do you think this system is sustainable?

Rudolf: I look at it in a more optimistic way. It is what it is, but it is changing, the market is developing, there are more laws being passed encouraging foreign investment, and you can see this in the statistics of FDI [Foreign Direct Investment]. I think over time, in terms of the big picture, we are an emerging marketing. We are going the right way, although it’s a rollercoaster, but over the long term it’s getting more developed and transparent.

FDI is increasing? By how much?

Rudolf: I don’t know off hand but real estate is usually the second or third largest recipient after manufacturing. Real estate is one of the major benefactors of FDI.

How important is the real estate market for the Vietnamese economy?

Mauro: [Pause] I think it’s crucial, I think [the Vietnamese] look at it closely as an indication of how strong the economy is itself. They are very attached to the land as core value, and I think it’s a good way to move the money out of the stock market, which seems very risky at the moment.

A lot of the big guys I mentioned before will change the dynamic of the market, whether there is a huge bubble of oversupply I cannot answer now but the belief is that they are building because there is demand and they believe people will invest. I think this is sustainable at a level that the bank will need to come in with more support. The market is a long way from being developed but it’s good news that we’re talking about something that can always improve and get better.

If you see the whole District 2 it’s a beautiful example of a new satellite city. So there is a lot of good news out there, I wouldn’t be too worried. And being here for eight years I passed two big bubbles: 2008-2009, and then 2011-2012, so I am very realistic about the market, but I see a lot more educated buyers and developers now.

Photo by Huy Nguyen

Is local financing still too weak to support real estate development?

Mauro: I think yes, I think there are banks that rush into something when they are asked, and then they step out as quick as they rush in. There is really no long term strategy for the bank itself, and they only support a certain level of buyer, which is the mid- to high-end buyer that has easier access to the bank, while the people that really need it, it’s much more difficult for them.

We were doing a project in Cambodia one year ago, a satellite city with a townhouse. We were amazed to see the amount of support the low-income buyers got from the banks to buy these low-cost townhouses. There was a whole structure of payment set up according to the salary the people had and there was a lot of cooperation from the developers and banks coming together to help this structure. I don’t think Vietnam is there yet. I think it’s more based on the personal relationship between the buyer and his bank, than a sustainable, clear structure. As a foreigner living in Vietnam, or as a foreign company, it’s not an easy structure - so there’s a lot of improvement to be done at that level.

Rudolf: I think we all know that bank financing and debt financing is a big mystery to most people in Vietnam, and very few have access to it. But on the level that there is access, I don’t think there is a shortage, just simply looking at the amount of activity going on in HCMC and Phu Quoc. But as Mauro said, once we go down to the middle tier and lower tier enterprises, then it’s quite difficult. There are also sources of financing overseas. A few big players like Vincom and Novaland are using offshore bonds. Then you have other groups Singapore’s CapitalLand, who obviously get funding from Singapore from the head office. And then you have groups such as SonKim Land, who are mid tier developers who are locally based, but who are partnering with foreign investors who then bring cash either at the corporate or project level, which can be private equity or listed funds.

The government recently issued new regulation that facilitates the purchase of property for foreign residents. Can you tell me more about that?

Rudolf: I think there is growing interest from offshore to invest in Vietnam. But in reality the number of actual groups and projects that are viable and are able to handle a foreign partner are very small.

Photo by Tri Nguyen

Legally speaking is that easy for them to do?

Rudolf: In terms of individual buyers, there are less restrictions. There is interest, people are definitely curious about Vietnam. You see more articles on Bloomberg, Newswire, these big news outlets, are now running good stories about Vietnam. But it’s still not an easy decision making process to commit to buying. Over time it will get easier, and the laws have improved dramatically, but there are still grey areas in terms of exactly what you can and cannot do and the mechanics of a purchase and sell. But we’ve come such a long way, and there will be more interest. You will see more and more developers going overseas with a broker to sell property. You see a lot of properties in Thailand, Australia and U.S. sold offshore. Vietnam is now getting into that group. It’s still seen as an emerging, a more risky case, but I think it’s an incredibly huge market to get into.

Mauro: If you buy property here and rent it, it’s actually a decent yield compared to other countries. With some properties you get 7-9% return on your initial investment, which is pretty attractive for people. But the problem is how do I get my money out of the country. The foreign buyers are those who are familiar with the country. It’s not just overseas people who put the money in, there is usually a wife, girlfriend or whatever who is familiar with the country. Thailand has a proven track record of enter and exit. Foreigners are more keen and safe there. Vietnam has just opened to foreigners, so I think there will be a couple of rounds of track records to be proven to the market, and I think this will be seen over the next couple of years as some properties are developed, such as Estella Heights.

In terms of the number of projects, there is no match. I think there are more projects in Ko Samui than in the whole of Vietnam. So that’s just in terms of volume. I think Vietnam has a lot of room for what Phuket and Bali have a lot of - these villas, second home projects that are decently built. Usually [in Vietnam] it’s either a US$1 million beachfront property or the township project with no real design. Vietnam needs a mid-type of prical structure with a managemental top, not much branded management, just something nice enough to show that there is value here. This is missing in Vietnam.

Which real estate sector suffers the most in HCMC today?

Mauro: To me it’s malls. This sector is still not truly developed. The demand is not there on the Vietnamese side. The mixed tenants are not there. Usually there is the same type of tenants. You don’t see what you get in Thailand: where people can spend all day at a mall, where there is a large variety of shops and a large food court, with everything from low-priced items to the branded level. I don’t think malls in Vietnam are a sound market yet - land is too expensive for the amount of land retail needs. Considering the land price you need to go high-rise to make your money. I think the only mall that has proven to be nice is AEON Mall. I think that was a good shot. But it took a long time to be executed.

Malls are popping up everywhere. Is there an oversupply?

Mauro: I don’t think there is an oversupply, I think there is a lack of demand and even the right design. There is no mall where I want to spend more than two hours at, as opposed to in Thailand. In Vietnam the feeling of a mall is still just a box where you can buy something and get out. There is a lot of room for further development, even open malls where it’s outside and there’s bars and clubs and something where you make the whole place more than just a shopping location. I think retail, and more specifically the malls sector, is the most difficult to make work, but there is a lot of potential.

I think office passed its bad period. I think it’s doing well and will do well. Residential - that’s where there might be a problem. Residential is still being supported by sales. But that’s a market where you want to keep selling and moving. That’s the riskiest market at the moment. People don’t know if it can be a huge success or disaster in the next two years. Apartments for rent need to be much more developed, a nice rental structure, where developers actually help the tenants rent the space for a decent price, and decent management. The rental market is actually very small. There is a lot of room for improvement here.

Hotels - I think there is a big need for 3 and 4 star hotels, mixed-use hotels, limited service hotels. I think these have the most potential in the non 5 star area; 5 star hotels we have all the property we will need to have for the next three years, that’s it.

What is your opinion on Vincom’s Landmark 81 project?

Mauro: I saw the pictures as everybody else. I think there is a need for Landmark 81. Did you see Bitexco? Again, from a feasibility standpoint it’s not a good return on investment, but it does give somehow a stronger character to the whole city. So I think this is something we should give it credit for. Vincom is different, because they are able to get the money on everything surrounding the Landmark 81 development. That’s the strategy: they’re going to spend money on something that’s not making any money itself, but this value is then going to be passed to every surrounding development they are going to have. I like the area, I think there is a lot of potential. There are a lot of critics on Vincom’s design and choices, but there is respect for them in that they actually deliver.

For a land lease for foreign companies, you are given 50 years. What happens after 50 years?

Rudolf: There are a few different issues. First of all, let’s go down to the other side, which is a developer selling projects to individual investors. There’s new rules and regulations, so yes, a foreigner can buy, but as an individual buyer foreigners can lease only 50-70 years renewable for a freehold area, but the renewable part is the grey area. In terms of talking about a development project, a local or foreign joint venture company can build the project; it just depends on the actual land and area, if its leasehold or freehold. But even a foreign developer, or a joint venture partner with local participation, can buy and sell for freehold some projects. For example a typical case is SonKim Land for The Nassim project. SonKim Land is local, but they joint ventured this with Hongkong Land. It’s freehold for locals, but foreigners can only buy it with a 50 year lease. Same thing with Estella. It’s actually now a 100% foreign-developed project but they can still sell as freehold.

Mauro: It’s funny because as a foreigner you buy leasehold, but if you sell to locals it converts to freehold. This structure makes the whole system open to hope that you never really lose the value even if you are foreign investor. So within 50 years you have a likely chance to sell it.

Imagine the prime minister of Vietnam approaches you and asks you to give three actions to take in order to boost the real estate market?

Rudolf: One is continue along the transparency route. Transparency is a key and risk factor for foreign investors. It has improved over five years but it still has a ways to improve to encourage development.

Mauro: I still think education for the real estate players is important. So my suggestion would be start to really work with developers, architects, PMs, everybody around real estate to educate them what the future of Vietnam is set to be and get everybody on the same page. Once you get a developer who knows what they are doing the project get smoother and the structure is better for the long-term value for the country. Same with architects, get them to a more professional level.

Education goes from the normal public structure all the way to certificates the government requires for the real estate professionals. 70% of the brokers selling homes are random people that are requested to call other people to try and sell it. This to me is wrong because there is a lack of information, a lot of confusion.

More regulation, more help and support. Having people run real estate as a profession. I’m not sure what are the requirements now for an architect to be considered a professional. If you see them make a mistake, you would withdraw the license that they have. A lot of Vietnamese developers - and I won’t mention any names... if you go to Nha Trang, there are a lot of structures that are dangerous in the way they are structured. A lot of property management companies have no real regulations in the way the work needs to be performed, just financial regulation to what they can charge to the developer. Yes there is a certificate to be a broker, but it’s just an easy month course. All of this is missing from the country. The fact that the professionals here are not guided to maintain a certain level of professionalism.

The other suggestion would be for local authorities to work much more with developers. There is a lack of international flights to Phu Quoc, one of the reasons is that local authorities and developers are not sitting down to develop the destination in the right way. Hotels don’t have a small marketing fund to promote destinations. I think if this coordination between local authorities and private investors was there, it would benefit everybody. Danang was able to be seen as an international destination within three to four years of development, because a lot of international brand hotels came on board, and because local authorities were much more open to foreign investors and players. I’m still surprised we receive the Danang newsletter from local authorities every two months. This to me is a huge step ahead. They understand what foreigners need, they listen to them, work with them on promoting the destination. I think this will give a lot of value to Phu Quoc, Mui Ne, Ho Tram, Nha Trang, all the destination that need more coordination. They should sit down with investors and consultants and make a master plan not just from the land value point of view but a 20 year planning for the whole city.

Photo by Tri Nguyen

Do you think it’s a bit naive to think that the Vietnamese can change to work for the benefit of the group?

Mauro: It’s a big step forward. But Danang did it, and it’s a good example of how it can be done.

Would you recommend a foreign friend to buy now in Vietnam?

Mauro: I would recommend to buy. Not everything. To me the right land is not the prime land, it’s the right development, the right spot that can be developed well, if the design is right, if many other things are right. It’s not just about having the prime land, but the land that makes the most sense. For the residential, yes - we bought a unit at Estella. I will buy some Novaland property. There are some products that have opportunities, but not which many people look at because of land prices.

Rudolf: Both of us have been here eight years. I myself would have never thought of buying anything until six months ago because of the future and pricing, but everything now converged to make sense. This time around there seems to be more real demand, I think the years of 2012-2015, where we worked through all the excess and the foundations again, gave me confidence that we went through that period of consolidation and that now we have much more solid footing. And now the economy - I follow it quite closely and all the indicators are looking positive; FDI, interest rates, foreign trade, everything is looking quite solid. Last quarter we had a little bit of a down, but everything for last 2 years has been building solidly. All our regional peers are suffering. So Singapore, Hong Kong, Thailand, Malaysia - usually they’re always looking good and Vietnam is the black sheep. Now it’s actually the reverse.

Photo by David Sawyer

Many economical factors are looking very bleak on a global scale. Is the Vietnamese economy dependant on these factors?

Rudolf: Yes and no. But I always look at myself, why I am based in Asia and why I am based in Vietnam. Because globally it can be a good place to be. Putting all the factors together, in the next 5-10 years Asia, specifically Southeast Asia and Vietnam, is a good place in terms of balance.

So you don’t think we’re in a real estate bubble now?

Rudolf: Globally it’s been risky for the past five years. But if you keep saying there is a crisis every day, in five years you’re going to be right at some point. There are always cycles, but I think the gloom and doom scenario is possible but highly unlikely.

Mauro: I don’t see a bubble like I saw a few years ago. I don’t see that scary situation where you say, oh my god, if that bank or whoever stops doing this, everything will collapse. I’ve seen much more growth from private investors. There are probably two sectors where you may say there is a lot of supply coming but demand is uncertain: one is residential, which is what probably everybody is looking at. I receive a message every day that somebody is building a condo somewhere in HCMC, so that’s probably the part that is most scary. The second home market is the other. Some planned projects are fine. But a lot of not well-planned products we will see selling only 15-20% at launch, and that’s it. This is the scary situation where there is no buyer.


How to Buy a House or Land in Vietnam?

By: City Pass Guide

Foreigners who are living in Vietnam may purchase houses for the expressed purpose of dwelling in it. By Vietnamese law, land is a national good, so you can only own the structure built on a property, not the land that it is on. You can enjoy a “land use right” for up to 50 years. This duration can be renewed. Also note that if you’re married to a Vietnamese citizen or a Việt kiều, you will have the same ownership rights as Vietnamese citizens.

Seek professional advice to ensure that all steps are properly taken to ensure a troublefree property transfer.

Alternatively, according to Vietnam’s Housing Law, every foreigner who has a Vietnamese visa stamp on their passport can buy a property in Vietnam. However, if you enjoy diplomatic or consular immunities and privileges, this does not apply.

Besides individuals, foreign companies, branches, representative offices of foreign companies, foreign investment funds and branches of foreign banks that are operating in Vietnam are also entitled to purchase property of residential projects.


A serviced apartment in Diamond Island Luxury Residences

What are the limits of foreigners’ rights on residential property in Vietnam?

The law states that foreign individuals and entities may only buy, receive or inherit apartments and houses in commercial projects and not in areas that limit or ban foreigners.

Although the limit of one property per foreigner has been repelled, the new Housing Law sets a limit on the proportion of foreigners who may live in a determined area: the total number of units owned by all foreign buyers must not exceed 30% of the units in one apartment building, or 250 landed property units in one ward.

The duration of the tenure is supposed to be equal to the land use right owned by the developer, most likely 50 years, with an option to extend the land use right at the end of it. The exact conditions for the extension are still unclear and will be detailed in further regulations.


Crescent Residences in D7, HCMC

An expatriate may lease his/her property for any purpose that is not banned by law, but he/she must inform the provincial house management agency before leasing the property. In this case, he/she is subject to Vietnam’s property taxes. If you are an overseas Vietnamese or if you are married to a Vietnamese citizen, you are entitled to a freehold tenure on the property.

If you bought it, you could of course decide to live in the house but also lease it or pass it through inheritance to someone else without any difficulties. To lease it, you will need an administrative authorisation from the Housing Department of the People’s Committee where your property is located.

Can foreign-invested enterprises purchase residential properties in Vietnam?

Foreign-invested enterprises that operate in Vietnam under the investment law but are not engaged in real estate, can purchase residential houses for their employees. They must possess investment certificates or written certifications of investment activities as appropriate to investment forms specified by the investment law granted by a competent Vietnamese state agency. They can buy properties to house their employees, but are not able to use them for leasing or other purposes.

HCMC properties
Housing in Ho Chi Minh City. Photo: GettyImage

What are the steps to purchase a house in Vietnam?

1. Once you have chosen the property, you will have to sign a reservation agreement.

This legally links the buyer and seller and may include paying a deposit to the seller. Examine closely the reservation agreement before paying the deposit. It prescribes that if the buyer changes his mind, he will lose the deposit, and if the seller changes his mind, he will have to pay twice. You’re well advised to notarise this document to protect your interest.

2. Due diligence is the next step.

You will check the reliability of the seller by examining their ID or registration certificate along with the property’s certificates (for example the ownership certificate). You should also ask for a bank guarantee or insurance to ensure the seller is trustworthy.

3. Once due diligence has been satisfied by both parties, they confirm their engagement and interest by signing the housing contract.

An annex related to facilities that go with the apartment is advised. Make sure the agreement is signed by all related parties and if not, then by the representative who is mandated by the related persons. The contract on residential house purchase and sale must be in Vietnamese, so you will need a Vietnamese translator to help examine its content. Although many developers provide a bilingual version of the contract for a better understanding by all parties involved, only the Vietnamese version is valid under Vietnamese regulations. To help you with the complications involved with the contract, we list some details to look for before signing:

- Is it stated that the seller has the ownership certificate of the apartment and does he give a guarantee over this ownership?
- Is the apartment also a security for a loan?
- What are the responsibilities of the seller in case of dispute over the apartment ownership due to his fault?
- Methods used for payment?
- What are the responsibilities for tax and fees?
- What is the delivery time?

4. Paying taxes and fees.

Normally, if there is no other agreement between parties, the buyer pays the registration fee and the seller pays income tax. The payment shall be made at the tax department of the district where the house is located.

5. The last step is to apply for an ownership certificate.

Both parties can agree on how to handle issuance of the new certificate, although it is most likely that a buyer will have to take it up.


Designing a Luxury Hotel with KAZE Interior Design Studio

By: Katie Kinnon & Molly Headley

Create a concept; mood and function first

Planning a project at KAZE Interior Design Studio, District 2

How to Create Comfort in KAZE Interior Design Studio’s Projects

The Finished Interior Design Project

Creating an Interior Design Concept in Vietnam

What do you want to feel when you walk into a top hotel? This is one of the first questions that the team at KAZE Interior Design Studio asks themselves when they start creating interior design and architectural concept for a new project. Is the hotel meant to create a mood of bespoke luxury or minimal tranquility? Who are the expected guests and how will the lighting, furnishings, flooring and colour scheme transport them?

A hotel is, after all, part of a journey, a place to get away, whether for business or pleasure. A good interior design studio creates that journey from the first sketch to the moment that the final piece of artwork is placed on the wall.

KAZE Interior Design Studio

KAZE Interior Design Studio in Ho Chi Minh City is the leader in luxury interior design in Vietnam and Cambodia. In addition to a broad design portfolio including residential, food and beverage establishments, and office spaces, the studio has taken on massive hospitality projects, which have brought numerous awards to the studio. Vinpearl Resort & Spa Long Beach in Nha Trang, Renaissance Riverside Hotel in Saigon and Courtyard by Marriott Phnom Penh are a few notable names on a list of more than 100 projects.

Fong-Chan Paw Zeuthen, Founder of KAZE Interior Design Studio, was brought up and educated in Denmark where, she explained, the design approach is very different to that of Vietnam. For a hotel designed for a Vietnamese market, she said that she would avoid using too minimalistic of an approach because the clientele would feel like something was missing. Instead, she tries to give finished projects a Vietnamese flair that local clientele will also enjoy.

First Steps in the Design Process at KAZE Interior Design Studio in HCMC

The Client Brief

Fong-Chan explains that with her years of experience she has come to quickly understand her clients psychologically and often knows what they want more than they do. She will offer recommendations on how the concept can be improved after receiving the brief. Fong-Chan will then return to the KAZE headquarters where the whole team will sit around the large table in the meeting room and discuss how to implement the project, always focusing on a “function first” approach. This approach means that aesthetics are only considered once space’s use is decided upon.

KAZE Interior Design Studio

The Planning Process

This is when the ideas go from the brainstorming phase to reality. The office becomes a hive of energy as project designers sketch plans and junior designers figure out how to create the right ambiance. Fong-Chan explains that her team is passionate about what they do and that’s why KAZE is a success. “Being a good designer comes from inside, you put your heart and soul into things you care about”, she reiterates.

Fong-Chan states there are four parts to every project, the statement of purpose, layout, ambiance, and storyboard. When executed correctly, interior design can make people feel a certain way. For example, the purpose of a reception area in a hotel is to welcome guests and so the way furniture is positioned, the brightness of lights and even the scent (which are often created specifically for the brand) create an ambiance of warmth, comfort and relaxation.

KAZE Interior Design Studio

3D renderings are essential for each project. They need to be self-explanatory and easy to understand. However, they can be difficult to get right due to the level of precision needed. It can be hard even for good designers to see things in 3D. A designer needs to be able to describe what the space will look like down to the tiniest detail, like where a coat hook will go. This helps to create a full picture of how everything will be pieced together. The 3D renderings are literally the map that will be used to build the project; therefore, nothing should go into the rendering that cannot be created in reality.

How to Create Comfort and Beauty; The Vietnam Hotel Design Challenge

Every designer has a different way to approach a design. Fong-Chan tries to use a modern holistic approach when she designs any space. This is especially important when it comes to a project like a hotel where the success of the project is tied directly to how guests feel when they are within the space. Her design projects focus on what makes people feel good, using psychological experiences rather than just aesthetics.

Designers need to work out the proportions of the room as well as what will be in it so that when it is built an individual can walk around a room without bumping into anything. The team also research how people will interact with the space, ensuring it is ergonomically friendly in every detail. For example, if a guest wants to flick on the lights, where should the light switch be? If it is at the right height and in an intuitive location then the designer can choose a subtle design so that the switch doesn’t ruin the aesthetic of the wall design. If the switch is too hidden and in the wrong place, guests won’t care about the beauty of the design, they will be too caught up in their feelings of frustration. Some designers get so caught up in their vision that they create functionality problems that will end up marring the hotel’s TripAdvisor page with bad reviews based around comfort, soundproofing, and the user experience.

KAZE Interior Design Studio

KAZE interior design studio puts a lot of love and care into the materials they use. The way Fong-Chan describes her process is akin to that of a chef creating their favorite dish. She becomes excited when speaking about why wood is used in one instance, but plastic is used in another and the different finishes that are available for each material. It is important for Fong-Chan to use local materials because construction workers know how to work with them and look after them properly. This also helps the project’s sustainability as expensive materials don’t need to be imported.

Completing a Hotel Interior Design Project in Vietnam

Fong-Chan explains that KAZE only works with people they know and trust. From construction workers to cleaners “when people have a good relationship with each other they will go the extra mile.” This is important because the biggest hurdle to completing an interior design project is to meet final deadlines.

KAZE Interior Design Studio

During the construction process, KAZE interior design studio office often goes into a frenzy of activity, with project plans and Gantt (production timeline) charts being thrown into the bin and new ones being created. Sometimes, Fong-Chan admits, the end of a project can feel like an unattainable dream. However, when the hotel or resort is finally finished and Fong-Chan walks through the completed space with the client, she always feels a sense of pride at what the team at KAZE Interior Design Studio has achieved.

Image source: KAZE Interior Design Studio


Developers, District 9 Is Up for Grabs!

By: Keely Burkey

For developers, much attention falls on one particular sector: District 9, a 114 k2 block of land which lies on top of District 2. Many reasons draw their attention to this uprising section: the land is cheap, the parcels are large and as of now, not much of it has been seriously developed.

Although land development stopped in this space during the global financial crisis of 2007 and 2008, recently builders have seen a major upswing in market interest for district 9. Troy Griffiths, the Deputy Managing Director for Savills Vietnam, explains the area’s current situation. “To be honest,” he admitted, “I think that District 9 is starting to run out of these large available parcels of land.”

District 9

If you look at a map of Ho Chi Minh City, you’ll notice something striking: the districts in the centre of the map, like Districts 1, 3 and 4, are smaller than the outlying districts, like Districts 9, 12 and Binh Tan.

This development is normal, and follows established historical patterns seen in other cities, like Paris and London. When transportation was limited, districts needed to be smaller. Now that we have motorbikes, cars and a metro on the way, larger spaces can be carved onto the map; and it’s these larger spaces that are catching the eye of developers and real estate consultants not only across the country, but also across the world.

Expansion Plans

Griffiths shares his view on this development strategy. “It’s the pattern of the city’s development,” he said. “There are nodes with density that have grown and then become filled and occupied so that developers are now having to look for cheaper land. And this pushes them further and further away from those established nodes.”

District 9 apartment

And who’s taking advantage of it? “Everyone,” Griffith asserted. “You’ve got the local developers and then you’ve got your internationals, your Keppels and your CapitaLands.”

Land Grab

The parcels of land might be sold with ease, but that doesn’t mean that District 9 will be the new District 1 in a year’s time. The Vinh Tran, an employee at the Ministry of Construction, recently reported that although the government has a large stock of land in District 9, that is the way it will stay in the foreseeable future.

Rather than developing the stock, the city municipal department, along with other companies who have invested in District 9’s land plots, prefers to bide its time for the moment, focusing on other projects closer into the city. One big reason for this seems to be transportational issues. The construction of the metro is a big topic in Ho Chi Minh City at the moment, and even now, years before the metro will be finished, it’s affecting real estate prices.

As VietnamNet reported, 37 percent of apartment units for sale are along the Metro Line No.1, which connects Ben Thanh Market to Suoi Tien Park in District 9. When you add the metro to the recently completed Ho Chi Minh City-Long Thanh-Dau Giay highway system, a 55-kilometre-long road that connects District 9 to District 2 and Dong Nai, it’s clear that developers see big plans for this district.

District 9 industrial zoneImage source: zing.vn

District 9’s Top New Projects

Condos

Name: Sun Tower; Developer: N.H.O. Khang Viet; Year of Completion: 2018; Units: 379; Price: US$650 per square metre.

Name: Him Lam Phu An; Developer: Him Lam Land; Year of Completion: 2017; Units: 1,092; Price: US$900 per square metre.

Villas and Townhouses

Name: Lucasta; Developer: Khang Dien; Year of Completion: 2019; Units: 140; Price: US$800 per square metre.

 


The Foreign Investor Guide to Real Estate in HCMC

By: Eric Le Dreau

Are you a foreign investor and want to know about real estate laws in HCMC? Confused by the new Property Law? Indochina Legal clears up the confusion:

One of the most notable changes introduced by Vietnam’s new 2014 property law and its regulations is the revision of the right for overseas Vietnamese, foreign individuals and organisations to own residential houses, as follows:

Overseas Vietnamese (or Viet Kieus) can now own residential houses in the same way as Vietnamese citizens without further residency requirements or any limitations on the type or quantity of houses, or the terms of ownership. They must hold a valid passport with an entry verification stamp marked by the Vietnamese Immigration Department (VID) and a document evidencing their Vietnamese origin.

Foreign individuals have the right to own residential houses, subject to certain restrictions as compared to Vietnamese citizens and Viet Kieus. In order to own houses, a foreigner is required to have a valid passport with an entry verification stamp marked by the VID and cannot fall under diplomatic or consulate preferences and immunities. Requirements of residency, investment in Vietnam, work permit, social contribution and/or marriage to a local Vietnamese is not necessary for residential housing ownership. However, as to ownership duration, foreigners married to Vietnamese citizens or to Viet Kieus are entitled to an indefinite term, whereas foreigners who are not can only own residential housing for a period of 50 years. This can be extended for another 50 years, subject to approval by the provincial People’s Committee where the house is located. Unlike other foreigners, those who are married to Vietnamese citizens are also exempt from notifying the housing administration authority at the district level prior to leasing their houses to others. Apart from that, the new legal framework grants foreigners the same rights of Vietnamese in the cases of subleases, mortgages, etc. of residential housing.

real estate in hcmc

Photo by: Manh Hai

Foreign organisations are allowed to own houses provided that (i) ownership term shall not exceed the period stated in their investment certificates issued by Vietnamese competent authorities, including any extensions; (ii) use of the houses is for residential purposes only, for their personnel; and (iii) lease-out of the houses is not permitted.

It is worth noting that foreign organisations and individuals shall not collectively own more than 30% of the total number of apartments in an apartment building or not more than 250 separate houses in an area where population is equivalent to that of a ward. In addition, house ownership beyond real estate projects (e.g. a villa built by individuals) is not allowed. For national defense and public security purposes, foreign individuals and organisations cannot own houses in certain areas. With respect to these limitations, the local Department of Construction will publish on their official website the projects where foreigners cannot own houses, detailed numbers of apartments or separate houses eligible for foreign ownership, and the number of houses where foreign ownership has been recorded. To our understanding, the database is not yet completely developed for all cities and provinces in Vietnam. Meanwhile, payment for purchase or lease of residential houses shall be made via credit institutions operated in Vietnam. So far there has been no specific instruction on foreign exchange control for relevant inbound and outbound foreign funding of residential housing.

Despite certain remaining limitations, the NHL has provided a more open approach to ownership of residential housing for foreigners. The hope is that these changes will ultimately defreeze the real estate market and create a new wave of foreign investment in Vietnam.

Website: www.indochinalegal.com


Ibis Saigon Airport: A New Flagship for AccorHotels in Vietnam

By: Arik Jahn

The First International Brand to Open an Airport Hotel in Ho Chi Minh City

HO CHI MINH CITY, Vietnam — With an electrifying event, ibis Saigon Airport, AccorHotels’ brand-new hotel sitting right next to Ho Chi Minh City’s Tan Son Nhat International Airport, celebrated its grand opening on 24 March 2017. Ibis Saigon Airport is the latest addition to AccorHotels’ vast hospitality network in Vietnam.

Ibis hotel

Over a hundred guests, including Ho Chi Minh City officials, representatives from AccorHotels and the hotel’s owner company Hado Group attended the event, which paid tribute to ibis Saigon Airport with an opulent buffet, contemporary dance performances and a rooftop party.

“A Milestone for the ibis Brand”

The ibis Saigon Airport’s major asset is its strategic position: a mere 500 metres from Tan Son Nhat International Airport, the gateway to Ho Chi Minh City and all of Vietnam. Xavier Cappelut, Accor’s regional Director of Operations for Middle Scale & Economic Brand Hotels, praised the hotel as “a significant milestone for the ibis brand” thanks to its one-of-a-kind location.

Ibis Saigon Airport is a haven of hospitality tailored to corporate travellers and all those looking for “Value for Money”. With its functional and stylish travel-themed design and an outstanding 24-hour food and beverage service at the in-house Oopen restaurant, this hotel truly honours ibis’ slogan, “Well-being at the best price”.

ibis

As the first international airport hotel in Ho Chi Minh City, ibis Saigon Airport goes beyond the usual amenities of the economy sector. Its room typology – standard rooms, family rooms, studios, as well as one and two-bedroom apartments – is unrivalled in the budget segment, catering to the individual needs of each and every guest, from corporate clients to travelling families, from short-stay to long-stay visitors.

INTERVIEW WITH ORESTE TRAETTO, GENERAL MANAGER, IBIS SAIGON AIRPORT

Question: What makes ibis Saigon Airport the first choice for business travellers in Ho Chi Minh City?

Mr. Traetto: Our hotel is strategically tailored to business travellers. Our Oopen restaurant is open 24 hours and we are the only international hotel chain offering a breakfast service from 4 o’clock in the morning until 12 o’clock [in the afternoon]. So if you have an early flight to catch, you will be able to grab some food, get a coffee, hop on our free shuttle to the airport and you’ll be there in five minutes.

ibis oopen

Or imagine you are a businessperson, and had a hard working day. At ibis Saigon Airport, we provide you with all the facilities to truly reenergise you. What is very important to us is the ibis ‘sweet bed’ that can give you a really good rest. We have incredibly good feedback from our clients about it. And all that, I believe, shows how we really cater to the customers’ needs.

Question: You are very proud of ibis Saigon Airport’s in-house venues. Can you tell me a bit more about them?

Mr. Traetto: Today, travellers, even though they stay for a short amount of time, they want to optimise their stay. Now, with The Hub, ibis Saigon Airport has the only rooftop bar in  Tan Binh District. When you finish your work, you go upstairs, get a beer and enjoy the view of landing airplanes. We have a pool, we have a steam bath, we have a sauna, we have a gym – this is definitely what gives us the opportunity to attract a specific segment of clients. We provide our guests with a place to relax.

We are, if I may say so, part of the new generation of ibis hotels.

ibis hotel view

INTERVIEW WITH XAVIER CAPPELUT, DIRECTOR OF OPERATIONS FOR MIDDLE SCALE & ECONOMIC BRAND HOTELS, ACCORHOTELS

Question: AccorHotels is home to many brands. Why did you choose the ibis brand for this particular project?

Mr. Cappelut: I think this is a very unique location. The guests who choose to stay close to the airport have very specific needs. They might be in transit for a few hours, they might be spending their last night in Vietnam after a trip. We believe the level of comfort provided by ibis is just the right amount for these specific customers.

And the beauty of a brand like ibis is: you can travel anywhere in the world, you will find the same layout, the same service, the same comfort. Guests choose ibis because they know exactly what they can expect. That’s a guarantee that we provide to our customers. And they appreciate it.

Question: Vietnam is a country with an immense potential for tourism. How does ibis Saigon Airport serve this very particular market?

Mr. Cappelut: Vietnam is very important to us as a group. We, AccorHotels, have been in Vietnam since 1991. Back then, we were the only international hospitality company in Vietnam. That shows how committed we are to Vietnam as a business location.

And today, this country is developing at a dizzying pace. Last year, there was a 26% increase of international visitors and a 9% growth in the domestic market in Vietnam.These are incredible numbers.

And of course, we try to attract Vietnam’s domestic guests. The ibis brand perfectly caters to them because it is a functional, but full-service product that offers “Value for Money”.

Ibis Saigon Airport is quite simply the right product in the right place at the right time. And it is highly visible. In fact, we couldn’t be more visible than here at the airport. In that sense, ibis Saigon Airport is Accor’s flagship in Vietnam.

ibis hotel room

AccorHotels’ journey in Vietnam is far from over. In the next two years, the group plans to open another 12 hotels all over the country, which will bring its total portfolio to 36. But thanks to its eminent location next to one of Vietnam’s most important travel hubs and its many amenities, ibis Saigon Airport is undoubtedly a go-to for all Ho Chi Minh City-bound travellers.

 


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