Competition in the retail market has just begun

Competition in the retail market has just begun

"Competition in the retail market has just begun" - That is the judgment of Ms. Do Thi Thu Hang, Director of Research & Consulting of Savills Hanoi, about the current situation of the retail market.

Ms. Do Thi Thu Hang, Director of Research & Consultancy of Savills Hanoi

According to research by Savills Vietnam, in Hanoi only, the total supply of retail space has now reached over 1.5 million m2 of floor, an increase of 14% compared to the same period last year. In the past two years, the number of commercial centers has been continuously increasing. Meanwhile in Ho Chi Minh City, the total supply of retail space has reached about 1.4 million m2 of floor, an increase of 13% compared to the same period in 2018.

Large population size, high urbanization rate in Hanoi and Ho Chi Minh City, increasing income leading to large consumer demand are considered advantages to promote Vietnam's retail market quickly. In addition, consumer confidence also contributes to the demand of Vietnamese entertainment and shopping.

Compared to regional markets, the percentage of retail space per capita in Hanoi and Ho Chi Minh City is currently low. This shows that there is much room for development in this area. Another advantage for investors is that local governments are very welcoming and facilitating retail businesses. However, the retail market does not have a clear master plan to introduce large retail development units, thereby creating momentum to change the face of investment, shopping habits in some localities. The planning is currently passive.

According to Ms. Hang, the high cost of land in large urban areas, which requires a lot of initial investment and a slower recovery of capital than other real estate products like housing. In addition, Vietnam's retail market has not really had the advantage of competing with markets in other countries for high-end products. The proportion of buyers of this item is small and they are willing to buy high-end products abroad.

Last time, the market witnessed fierce rejection when a series of names were forced to leave the market such as Tran Anh, Shop&Go, Fivimart, Giant and most recently Auchan. However, Ms. Hang stated that the competition of the retail market has only just begun. The fact that large enterprises such as Vingroup and Saigon co-op have expanded their business to many big cities and provinces in the past and acquired small brands is a testament to this.

The competition is expected to be even more fierce because after a long time of learning and experimenting in the market, foreign businesses have gradually grasped the tastes and habits of Vietnamese consumers, thereby giving out the suitable business strategies and expectations, ready to compete with domestic businesses.

In this race, if foreign retail chains have modern models, they are proven in the world, have financial potential and have a competitive advantage over Vietnamese enterprises in the development of trade centers. Commercial, domestic enterprises are showing strength in the field of convenience stores with a wide network.

Ms. Hang predicts the success story of a retail business will be in the business strategy, besides integrating technology to match modern consumer habits. Nor does it eliminate the direction of integrating retail ecosystems or combining domestic and foreign enterprises to diversify development, taking advantage of both sides' strengths, towards providing more experience and products, convenient, affordable prices for consumers.

According to Thanh Thinh

Korea will support Vietnam to assess real estate prices

Korea will support Vietnam to assess real estate prices

This is the cooperation between Vietnam and Korea in the signing ceremony of the Memorandum of Understanding between the Price Management Department and the Korean Pricing Committee (KAB) under the Ministry of Land, Infrastructure and Transport Management South Korea yesterday (July 23).

Source: Internet

According to Mr. Nguyen Anh Tuan, Director of the Price Management Department (Ministry of Finance), Vietnam real estate valuation industry currently needs to have clear standards in land pricing. With its experience, let’s hope that KAB will help Vietnam to research and build a national database on prices in general and real estate in particular.

Mr. Hak Kyou KIM, President of KAB affirmed that with over 50 years of experience, KAB hopes to help Vietnam build a database to enhance land valuation capacity. This is also the basis for the parties to create practical achievements in the field of real estate prices or cooperation in building real estate information infrastructure, developing real estate valuation methods...

The content of the memorandum of understanding was signed, including exchanges, research and development in the field of real estate price surveys and database building, exchanging experience in training, capacity building, professional information on real estate prices,...

According to Chau An

Coastal resort real estate: The advantage for the leader

Coastal resort real estate: The advantage for the leader

Facing supply saturation, the shophouse or officetel segment is stalling because the investment value exceeds the actual price. This makes the villa segment have the opportunity to "wake up" because investors are gradually realizing the gold value when exploiting this product.

Infrastructure changes to serve the tourism industry

Recently, coastal resort real estate especially in Phan Thiet has become a new focus of interest of Vietnamese investors. According to experts, this new wave rose after the Prime Minister agreed to adjust the scale of Phan Thiet airport from VND 5,000 billion to VND 10,000 billion, turning it into one of three large airports. most in Central Vietnam, only behind Cam Ranh and Da Nang airports.

The Rank A Dau Giay-Phan Thiet highway has also increased its investment to VND 25,000 billion, becoming a road connecting Phan Thiet with the southern key economic provinces. In addition, to relieve the congestion of infrastructure to help this land become a key tourist city, the Ministry of Construction has boosted the plan for a number of transport infrastructure items to be completed and put into operation in the year of 2020.

The speed of Dau Giay - Phan Thiet highway and Phan Thiet international airport is speeding up

Shortened travel time will stimulate visitors to Binh Thuan more, creating momentum for outstanding real estate development. This change is seen as a leverage to help Phan Thiet become a valuable jewel for real estate tycoons, bringing this land to many large and small real estate projects of international stature as expected. Diamond Bay project (8ha), Victoria project (300 villas, 200 condotels), Melie Mui Ne project (400 condotels, 150 villas), Hai Phat's project (scale over 5ha with more than 100 the villa)...

Potential segment owns a soft and transparent legal price

In the resort real estate segment, recently Mui Ne - Phan Thiet is a land targeted by many investors. Once known as the " capital resort " in Vietnam, Mui Ne - Phan Thiet is very suitable for developing resort real estate. When the tourism potential is properly concerned with the strong development of the infrastructure system, this place becomes a "magnet" to attract real estate giants and investors pouring money.

Although Phan Thiet owns many valuable potentials, the land price here is still quite soft

According to the latest information of Vietnam Valuation Company Limited (VNG Value), the land price in Phan Thiet in 2018 is less than 15 million/m2. But after the huge investment capital of the State landed in Phan Thiet, the price of land here increased sharply. Taking into account that investors in the early stages can afford to pocket 20-30% profit.

Having owned soft prices, resort real estate is also interested and invested with a large frequency because this is a long-term owned segment. Most in the real estate cart, investment types only have a maximum ownership period of 50 years. So it is not difficult to understand when convalescence properties are "satisfied" by investors because of the advantages in business as well as assets to spend long term.

Possibility of strong price increases in the future

With the advantage of the transport infrastructure system along with the natural landscape, Phan Thiet is the place that families choose to travel and regularly resort. It is this factor that is the advantage of increasing the value of real estate because in addition to the need to buy to stay, customers can exploit the business model, provide profitable rental and investment services...

Preliminary assessment shows that, besides owning the potential to attract real estate investors, Phan Thiet is still a market in the early period of growth, so the development space is quite large. So this coastal city exploding into a top destination in Asia and the Pacific is only a matter of late.

With a capital of 4-5 billion VND, customers can only invest one 1-2 bedroom condotel in Nha Trang or Phu Quoc. At the same price, investors could have a 5-star resort villa in Phan Thiet with a full range of high-class facilities.

A typical example is the Goldsand Hill Villa project announced by Loc Tu and VNGroup at the end of 2018. Located on the hill watching the most beautiful sunset in Vietnam, with a scale of 9ha, the location is right away. Close to the coast of Mui Ne, almost all villas at Goldsand Hill have sea views. Owning a lot of expensive potentials, but the project has quite a soft investment, investors only have to invest capital from 12-15 million/m2.

Goldsand Hill Villa project is being most interested by investors at the moment

The potential of developing tourism resonating with transport infrastructure is becoming more and more complete, this is the best time for investors to cash down because this is the time when land prices are still soft, everything just in the early stages. So investors can be assured of high profitability in the future.

According to VTC

Real estate at the end of 2019: Need to be aware of bubble situation

Real estate at the end of 2019: Need to be aware of bubble situation

Some experts believe that the real estate market in 2018 - 2019 period will be balanced, and after 2019, demand will increase more than supply. Therefore, the market needs to be alert to the situation of real estate bubble, in which the foundation soil segment is most likely to cause this situation.

The 2019 real estate market has gone half way. As reported by some real estate market research units, the data have a difference, but the overall picture of the market is showing a decrease in supply by year, but increased when compared to precious. The reason is that many projects have to stop issuing licenses to review the construction investment process. Besides, there are conflicting opinions about the real estate market that continue to develop or about to burst bubbles.

At the 3rd Executive Committee Meeting IV term (2016 - 2021) of Vietnam Real Estate Association took place in Hanoi on July 27, Ph.D. Le Xuan Nghia, an economic expert - a member of the National Monetary and Financial Policy Advisory Council, provided some information on the global economic and financial situation, at the same time give some warnings for the real estate sector alone.

According to Mr. Nghia, over the past time, attracting foreign investment has increased, especially investment from China. Vietnam's exports to the US increased. The gold market increased strongly, and it is forecasted to continue to increase in the long term. For the real estate market in the period of 2018 - 2019, Mr. Nghia said that the market started to balance. After 2019, demand will increase more than supply.

Ph.D. Le Xuan Nghia.

"However, after this period, the market needs to be very wary of the situation of real estate bubble, no matter how much price is and even if there is a supply, do not sell", Mr. Nghia warned. According to him, in the segments, the ground is most likely to cause this situation. Therefore, careful surveys and analyzes are needed and recommendations are appropriate for adjustment.

According to Mr. Nghia, in the future and even now, businesses are and will be facing difficulties such as tight credit, stricter laws, slow disbursement of public investment... This is unfavorable signals for businesses that lack capital and legal problems. Besides, strong economic development raises concerns for Vietnamese enterprises, especially when leading technology enterprises in the world "jump" into Vietnam market. They wait for Vietnamese businesses to face difficulties, and it is difficult to survive. Or they wait for the real estate bubble to "explode" to seize the opportunity" Mr. Nghia predicted.

According to this position, we need to be alert in front of some trends: the fragile global financial market. Most are bank loans, procedures are slow, so it is easy to "show up" for foreign businesses. In the above context, Mr. Nghia said that businesses need to speed up the investment process, propose problems to promptly remove.

Mr. Nguyen Tran Nam, former Deputy Minister of Construction, also has a warning on the real estate market. He said, it can be seen that this is a "defensive" stage, not a "rushing forward" phase. According to Mr. Nam, Vietnam's real estate market is currently moving in a context that is not favorable and somewhat quiet. This has been forecasted from the end of 2018, regarding land planning, procedures are tightened. These are two important factors in the country affecting the market.

In addition, the US-China trade war and the Middle East hot spots are the most influential factors for economic growth. In the first six months of 2019, market results were still positive but compared to the same period in 2018 there was a decrease. "In general, the market is facing certain difficulties" Mr. Nam said.

Mr. Nguyen Tran Nam.

Mr. Nam said that the current market situation is different from the crisis in 2010. "At that time, the crisis was caused by surplus goods without buyers, while money was poured into real estate. Now, the purchasing power of people is very good. Like Ph.D. Le Xuan Nghia, in Vietnam consumption index is still good, goods have a lack of supply” Mr. Nam said.

However, according to Mr. Nam, the real estate market still has bright spots. Firstly, tourism real estate grows steadily. Secondly, industrial real estate also has many positive signs. In the first 6 months of 2019, FDI investment increased by 67%, nearly double compared to the same period last year.

From an investor's perspective, Mr. Nguyen Quoc Hiep, Chairman and CEO of GP Invest, said that the current market is more complicated and difficult. In the first six months of this year, Hanoi only approved 6 projects while the city currently has 10 million people. “We have encountered projects that changed the concept of the Land Law 2014. Law enforcement agencies have changed their processes and concepts. Having completed the administrative procedures, now the change is considered to be redone from the zero. This is the first thing I think the Vietnam Real Estate Association needs to make petitions on the legislative side" Mr. Hiep said.

According to Mr. Phan Huu Thang, former Director of Foreign Investment Department (Ministry of Planning and Investment), the wave of foreign investment will increase. For the real estate market, it is necessary to ask questions, whether it is necessary to call for foreign investment or not, if so, to call in which areas, which areas have been done, which fields have not been done yet and need to focus on calling for investment. "We need to have an early assessment of the capacity of Vietnamese enterprises, from small to large, to see how much domestic enterprises can do, and where to call foreign investment" Mr. Thang said.

According to Tam An

Hot ground originates from the psychology of Vietnamese people

Hot ground originates from the psychology of Vietnamese people

In the past time, in the market, there have been hot land in some localities, but the subjective cause comes from the psychological preference of the majority of Vietnamese people.

At the seminar "Professional real estate brokerage and international integration" took place in the morning of June 29, Prof. Dang Hung Vo said that such a hot situation occurred in three planned locations into three special administrative-economic zones including Van Don, Northern Van Phong and Phu Quoc. In order to cut down the hot status, localities had to use administrative orders to prohibit transactions, ban the conversion of use purposes while adjusting the planning. So far, these statuses have subsided and localities have stopped applying the above administrative measures.

In addition, in some districts at the district level in Hanoi and Da Nang, there is also a situation of hot land with rumors that it will be planned for the district next year. Media reports, these rumors were launched by speculators to create fake hot land, through high-priced fake deals. Meanwhile, brokerage agencies have demonstrated by data that the number of real estate transactions is almost unchanged, high land prices are just rumors. 

A recent trend of hot real estate in the land area related to the mechanism of "subdividing plots" has been adjusted many times by the State. Mr. Vo said, in the period 2004 - 2007, the State completely banned the sale of plots in urban areas. After that, the ban only applies to cities of grade 3 and above and now allows to extend this mechanism according to the decision of the provincial People's Committee. 
Besides, the land plot segment has been hot in some urban areas and rural areas adjacent to urban areas.

According to Prof. Dang Hung Vo, the foundation land is in line with the preferences of Vietnamese people, including investors and consumers.

Explaining this situation, Mr. Vo said that because the land was in line with the preferences of Vietnamese people, including investors and consumers. According to this trend, many "unreal" projects on ground subdivision were formed, including the participation of a number of real estate brokerage agencies in land brokers. General assessment of the real estate market in the early period of 2019, Mr. Vo said, the market was tending to fall into stagnation. In some localities, some time, the ground fell into a real or fake hot status, associated with negative tactics. "The general stagnation of the whole market was caused by legal conflicts between laws related to real estate and inconsistent law enforcement in localities" Mr. Vo said.

On the other hand, the State Bank's policy on tightening real estate credit is also a cause for the real estate market to lack capital for development. This situation reduces demand from secondary (individual) investors, ie reduces future real estate transactions. For the situation of hot local real estate and time, according to Mr. Vo, there is a completely natural cause from the development plan associated with the ability to increase real estate prices. The only thing is that the legal framework does not have a reasonable solution to "cut the hot status" but must rely on administrative solutions without a legal basis decided by the local authorities.

In some localities there is a situation of creating fake hot stauts based on tactics of spreading false information about development planning. “These fake news are launched by speculators to gain profits, in which the brokerage sector has done a good job of reducing the fever by providing real-estate statistics there on mass media" said Vo.

According to Mr. Vo, for the situation of hot land plot in projects that need to be reconsidered, it is allowed to implement the mechanism of "selling the sub-plot". In many developed countries, this mechanism is only applied to address housing for low-income people and is very well managed. Vietnam also needs to review the legal framework on division of subdivided plots so as not to create hot ground like the recent time. "Thus, the causes and solutions are in the state management area" Prof. Vo emphasized.

For the hot land plots in "unreal" projects this activity was taken by a number of real estate businesses, including some brokerage firms. Certainly, this negative cause from real estate businesses, need to be handled thoroughly.

According to Tam An

World Bank: Forecast of Vietnam GDP growth in 2019 reached 6.6%

World Bank: Forecast of Vietnam GDP growth in 2019 reached 6.6%

This is the forecast given in the "Review" report on Vietnam's economy recently announced by the World Bank (WB).

Source: Internet

According to the World Bank, recent growth decelerated due to the impact of external disadvantages on important economic sectors. At the same time, weak external demand has slowed growth in export-oriented manufacturing and processing industries. Risks continue to increase, as global uncertainty rises with trade tension escalating and more financial volatility.

GDP growth is forecast at 6.6% due to the impact of fiscal and credit policies. The expected inflation index is still maintained under the official inflation target of 4%.

Mr. Ousmane Dione, Country Director of WB in Vietnam, said that Vietnam needs to prepare to adjust macroeconomic policy in case the above risk becomes a reality, leading to a deeper decline compared to the expectation. "Vietnam will also have to continue to deepen structural reforms, improve export competitiveness, enhance trade depth through regional and multilateral agreements," said Ousmane Dione.

The WB's thematic report goes into the development of Vietnam's tourism industry, the country's largest service export sector, contributing to 8% of GDP in 2017. The World Bank stated that strong growth made The industry have reached a boom in development, which means that if growth continued without being well managed, it could have adverse economic, social and environmental impacts.

According to the General Statistics Office, GDP in the first 6 months of 2019 is estimated to increase by 6.76%, of which the second quarter increased by 6.71% compared to the same period last year, the macroeconomic was stable and the export made an important imprint. Consumer confidence reached a record, inflation was controlled the lowest in the past 3 years.

According to a representative of the statistics agency, the growth target of 6.6% -6.9% in 2019 has been achieved. Because manufacturing industry processing manufacturing, although not growing as fast as 2018, still maintains a high level.

According to Chau An

FDI into industrial parks reached 9.7 billion USD after 6 months

FDI into industrial parks reached 9.7 billion USD after 6 months

According to the report of the Economic Zone Management Department, Ministry of Planning and Investment, it is estimated that in the first 6 months of 2019, industrial parks and economic zones have attracted about 340 projects with direct investment capital will be received foreign investment (FDI) with a newly registered capital of about 8.7 billion USD

Source: Internet

With the above results, up to now, the total number of FDI projects invested in Vietnam has reached about 8,900 projects with a total registered capital of about 186 billion USD. For domestic investment projects, in the first 6 months of 2019, industrial parks and economic zones have attracted about 334 projects with a total registered capital of nearly VND 83 trillion. Accumulated total number of domestic investment projects about 9,086 projects with total registered capital of over VND 2,060 trillion.

According to statistics, there are 326 industrial parks established with a total natural land area of approximately 95,500 hectares. Among these, 251 industrial parks were put into operation, occupancy rates reached nearly 74% and 75 industrial parks are in the stage of compensation, site clearance and construction.

In addition, there are 17 coastal economic zones established across the country with a total area of land and water surface of more than 845,000 hectare. Ninh Co economic zone (Nam Dinh province) is in the development plan of economic zones but has not been established.

According to Dieu Trang

Coastal real estate: New sights rich in the potential of investors

Coastal real estate: New sights rich in the potential of investors

The rapid change in planning, transport infrastructure helps coastal cities increasingly attract tourists, opening up opportunities for investors.

Vietnam has great potential of coastal real estate

In a report published at the end of 2018, research unit Knight Frank (UK) reported that the global real estate market is currently about 40% higher than the average product compared to the same size, utility, and quality but lost in sight factor. Although it is considered that the market has a slower pace of development than the urban housing market for about 1 year, what the coastal real estate has shown in recent years has not stopped creating surprises for investors.

Source: Internet

In 2018 it is estimated that more than 7,800 apartments are traded, the absorption rate is over 92%. Only in the first quarter of 2019, the number of open condotels sold in the southern markets was higher than in the north, the southern provinces, especially from Da Nang, with more transactions.

The coastal real estate market has started taking shape since 2015 with many large projects being implemented. In the first phase, enterprises invest mainly in traditional tourist sites with condotel products and built-in villas. However, starting from the beginning of 2018 until now, the process of expanding the coastal real estate market has shown the shifting trend of investment capital. Instead of pouring capital into traditional markets that are showing signs of saturation, many investors have decided to seek land fund in new markets. This journey has created a momentum for economic development for many localities, especially in the South Central region, which possesses abundant natural resources.

New "sights" of investors

Demand for owning coastal real estate in many segments such as private houses, villas, land plots, condotel... in the market is still very big. However, along with the number of projects appearing more and more, competition pressure is also increasing. Therefore, any enterprise seeking a beautiful land fund, taking advantage of its near-sea advantages, complete infrastructure and transportation systems, a formal investment process... will quickly become the "target" of national investors.

The investment story in Nhon Hoi New City - The project located in Nhon Hoi ecological urban area (Quy Nhon) is considered a typical example. There is no need to organize an opening day, but the project has recorded more than 1,000 bookings for product transactions. In the context that the competitiveness between projects in Quy Nhon is not small, what has created the success for this project?

The perspective of Nhon Hoi New City project

Quy Nhon is considered a coastal city with many potentials for tourism property development. The change in the urban face of Quy Nhon is happening quickly after the coastal city has been continuously invested by real estate enterprises to invest in large resort projects. However, to really create attraction for tourists, especially international tourists, only developing services and utilities within the resorts is still not enough. Quy Nhon market is lacking of commercial centers, concentrated streets to meet the shopping needs to keep visitors long-term stay. Wanting to become an outstanding meeting point on the Vietnam tourist map, Quy Nhon needs to form commercial streets, shophouse is planned carefully.

This has been realized by the investor at Nhon Hoi New City project. With more than 1000 products supplied to the market, investors expect this place to form the largest commercial center in the coastal city. Adjacent to the marine park, flexibility is the factor that creates attraction for Nhon Hoi New City products when fully meeting the investment needs to settle, home stay service business or commodity trading. In addition, the project owner also showed careful preparation when fully meeting the legal requirements, granting the red book separately for each land lot. These are the factors that led the project of zoning in Nhon Hoi ecological urban area to become a "new phenomenon" in Quy Nhon real estate market over time.

According to TTDN

Industrial real estate expects opportunities from EVFTA

Industrial real estate expects opportunities from EVFTA

CafeLand - According to experts Savills Vietnam, Vietnam - EU Free Trade Agreement (EVFTA) will provide opportunities for all real estate segments, in which industrial real estate will have many positive effects.

EVFTA is an important agreement, strongly promoting the industrial and export sectors in Vietnam by removing 99% of tariffs on goods. Clusters and industrial parks of Vietnam increasingly attract the attention of investors. EU investors are expressing interest in Vietnam, and transparency of the legal and investment environment will continue to increase the reputation of this S-shaped country.

However, the United States recently applied tariffs on Korean and Taiwanese steel products manufactured in Vietnam. This showed that the origin of import and export goods is increasingly being monitored closely by countries around the world. 

Mr. Troy Griffiths, Deputy General Director of Savills Vietnam, said the agreement is a good news for Vietnam's real estate market, showing the Government's commitment to make Vietnam a leading destination in the field of manufacturing industry in Asia.

Industrial real estate is predicted to have many opportunities after EVFTA.

"Bilateral trade will certainly increase, followed by increased FDI inflows, increased employment, and more opportunities across all real estate segments" said Troy Griffiths.

Mr. John Campbell, Head of Industrial Property, confirmed that the number of requests from EU customers has increased in the process of waiting for the agreement to be signed. He also said that this free trade agreement will increasingly attract the attention of the market to Vietnam's industrial real estate.

Accordingly, by facilitating the application of the latest production technologies and strengthening human resource training, the Government of Vietnam is gradually eliminating the fear of businesses about the feasibility, or lacking of human resources and increased costs. Improving the transparency of the business environment will help reduce investors' worries and raise production quality standards in Vietnam.

Vietnam - EU Free Trade Agreement (EVFTA) is a new generation FTA between Vietnam and 28 EU member countries. EVFTA, together with the Trans-Pacific Partnership Agreement (TPP), are two FTAs with a wide range of commitments and the highest level of commitment of Vietnam ever.

On December 1, 2015, EVFTA officially ended negotiations and by February 1, 2016, the agreement was published. On June 26, 2018, EVFTA was split into two Agreements, one is the Trade Agreement (EVFTA) and the other is the Investment Protection Agreement (EVIPA) and officially ends the legal review process. with EVFTA Agreement.

In August 2018, the legal review process for EVIPA was also completed.

Two agreements were signed on June 30, 2019. After the signing, the two agreements will have to go through the internal approval process in the EU and Vietnam in order to officially take effect with both parties.

According to Tam An