Special Report: Riva Park Condominium (HCM, Vietnam)

Project Information

Address: 504 Nguyen Tat Thanh, District 4, Ho Chi MinhLand area: 4827.80 m2Construction Area: 2042.20 m2Building density: 42.68 %Number of floors: 18 floorsNumber of apartments: 320 unitsSize: 58.46 m 2 - 113.13 m2Expected handover: 2017

Location

Riva Park Condominium strategically located in District 4, just 3km away from heart of business district 1 with the iconic building Bitexco Tower and will benefit greatly from the future Vincom Khanh Hoi mixed development.

District 4 is a small district (just 4 km square) just next to Business District 1, to be an extended area for the business district.

Riva Park location map

Developer and Contractor

- Developer: Vietcomreal

- Development partner : Tien Phat Corp.

- Main Contractor: Hoa Binh Group.

- Bank sponsors: VietcomBank

Price

Comparison with similar type of projects in the same area or nearby

Project	Developer	TOP	Type of flat	$ per sqft (From)	Location
Riva Park	Tien Phat	2017	1BR – 3 BRs	SGD $187	District 4
Saigon Royal	Novaland	2019	1BR – 3 BRs	SGD $356	District 4
The Gold View	May Diêm Sài Gòn	2017	1BR – 3 BRs	SGD $214	District 4
The Tresor	Novaland	2017	1BR – 3 BRs	SGD $253	District 4

* Price does not include VAT 10% tax and 2% maintenance fee

Rental Yield

Estimated rental for 1 bed room flat:  SGD $700 - $900

Estimated yield: 7-8%

Masteri Thao Dien - A great project for investment

Masteri Thao Dien Condominium (HCM, Vietnam)

Summary

·         Very good location: next to Metro station and Vincom Shopping mall in Thao Dien Area

·         Attractive price: 10%-20% discount compared to the nearby projects, high potential for capital appreciation

·         Good rental yield at around 8-10% (Gross)

·         Reputable contractor and developer with good connection to VinGroup, the biggest developer in Vietnam

Very Good Location

Masteri Thao Dien a high end condominium located along the Hanoi Highway in District 2, Masteri Thao Dien. The condominium a few step away from the Vincom Megamall Thao Dien, which was open to public at the end of year 2015 and has been very successful in attracting business and people.

The station number 7 An Phu of the Metro Line No. 1 just at the door step is also another key beneficial feature of the project. With this metro station, it will take just around 10 minutes to get to the business center at District 1. It will reduce significantly the hassle to move in and out of the business district during rush hours with massive traffic in Ho Chi Minh City.


Materi Thao Dien is also located at the gateway of Thao Dien area, which has been home to many foreigners who live and work in Ho Chi Minh (HCM) city as well as tourists who want to find safe and comfortable resting place when come to visit. The area is one of a few locations in HCM where there is a high concentration of foreigners due to its good security and various facilities catering to foreigners like international schools, hospitals, supermarket, restaurants, bar and pubs, etc. Thao Dien is also the symbol of the luxury life style in HCM with a number of lavish villas and condominiums where the riches stay.

 

Masteri Thao Dien location (Source: www.masteri.com.vn)

Attractive Price

Comparison with similar type of projects in the same area or nearby

Project	Developer	TOP	Type of flat	Price per square ft.	Location
The Ascent	Tien Phat	2017	2BR – 3 BRs	SGD $236	Thao Dien
The Vista	Capitaland	2011	2BRs – 4 BRs	SGD $272	Thao Dien
Estella Heights	Keppel Land	2016	1BR - 4BRs	SGD $257	An Phu
Masteri Thao Dien	Thao Dien Investment	2016	1BR - 3BRs	SGD $213	Thao Dien

With the significant discount (10%-20%) compared to the nearby projects, Masteri Thao Dien stands high chance for capital appreciation. This will be even more compelling when the metro line completes in 2018 and fully operates for public use in 2020. It is projected that when the metro line completes, with the convenience it provides, the price in this area would be close to area near district 1, which is around SGD $350 per square ft.. That means more than 60% appreciation within 2-3 year time

Good Rental Yield

With such strategic location, it is advisable for buyer to keep the property for long term growth while collecting monthly rental, which is most likely coming from foreign tenants. Survey the surrounding area shows the rental for 1 room condominium unit at this location is around USD $600 –$800 or SGD $800 - $1070 per month or SGD $9600 - $12400 per year. With the cost of the property around SGD $120K (tax included), the gross rental yield is around 8%-10%. After deducting 20% tax and around SGD $600 per year management fee, the investor is still getting around 6-8%. For larger flat, the rental may be slightly lower per sq ft, however the cost per sq ft. can also be lower.

Also note that, the rental for foreign tenant usually tags with USD so that the owner will be able to hedge the inflation in Vietnam, which can be quite high.

Good Contractor and Developer

Cotechcon, the main contractor for the project, is one of a few most reputable contractors in Vietnam. It was the contractor for a number of iconic projects including Vinhomes Times City Park Hill and Vinhomes Central Park, which are developed by the biggest developer in Vietnam, VinGroup. Cotechcon also had track record of early completion of projects. Masteri is another development to be completed earlier than schedule. This takes care of the risk of delayed and incomplete project, which is not a rare phenomenon in Vietnam.

Thao Dien Investment, the developer of the project, has a good connection with Vin Group. This is why the Vincom Megamall was built to be part of the project, that creating much more value to its residential block. The development was also backed by Techcombank, a major bank in Vietnam. This reduced the financial risk of the project, therefore bring it to a successful completion.

Conclusions:

As a beautiful project located at one of the most luxurious location in Ho Chi Minh City, Masteri Thao Dien has all it needs for a convenient and pamper life style, be it living environment, shopping hobby, international education and hassle free transportation. It was probably the best investment idea at the moment for Ho Chi Minh, a growing city with much demand in term of high standard accommodation.

Law regarding foreigners buying houses in Vietnam

On 25 Nov 2014 National Assembly of the Socialist Republic of Vietnam approved the Housing Act 2014. One of the most prominent new Housing Act 2014 contains provisions of a separate chapter on housing ownership in Vietnam by foreign organizations and individuals in Vietnam (or in simple words is a foreigner the right to buy houses in Vietnam). Under the provisions of the Housing Act 2014 are detailed regulations on the subject of foreigners buying houses, conditions foreigners to buy houses and rights and obligations of foreign home buyers to buy houses in Vietnam. Considering the demand of foreigners for homeownership procedures in Vietnam and help foreigners to buy houses in Vietnam rapidly convenient, most economical, Vietnam An Act is a pioneer in the field of provision of services package for foreigners to buy houses in Vietnam.

Foreign objects (organizations, foreign individuals) to own houses in Vietnam:

• Organizations and individuals investing overseas housing construction project in Vietnam under the provisions of the Housing Law and related legislation;
• Enterprises with foreign investment, branch or representative offices of foreign enterprises, foreign investment funds and foreign bank branches operating in Vietnam (hereinafter referred to as foreign organizations );
• Foreign individuals are allowed to enter Vietnam.

Form of ownership residences of foreigners in Vietnam

• Housing construction investment project in Vietnam under the provisions of the Housing Law and related legislation;
• Purchase, hire purchase, donation or inheritance of commercial housing includes apartments and individual houses in the investment projects of housing construction. (Except for housing projects in the area of ​​ensuring national defense and security as stipulated by the Government of Vietnam).

Conditions and rights and obligations of foreigners to buy houses in Vietnam
For individuals, institutional investors of housing construction project in Vietnam when homeowners in Vietnam must meet the following conditions:

• There are investment certificates
• Housing project was built in accordance with the law on housing

For foreign organizations are enterprises with foreign investment, branch or representative offices of foreign enterprises, foreign investment funds and foreign bank branches operating in Vietnam when buying a home in Vietnam must meet the following conditions:

• There are investment certificates or documents relating to the permitted operations in Vietnam (hereinafter referred to as investment certificates) issued by the competent State agencies of Vietnam.

For foreign individuals to buy houses in Vietnam:

• Be allowed to enter Vietnam and are not entitled to the privileges and immunities of diplomatic and consular prescribed by law.

For foreign organizations are enterprises with foreign investment, branch or representative offices of foreign enterprises, foreign investment funds and foreign bank branches operating in Vietnam and individuals foreigners to buy houses in Vietnam only when homeowners:

• Only to buy, hire purchase, donation, inheritance, and property do not exceed 30% of the apartments in an apartment building; if the individual houses including villas, semi-detached houses are in an area with a population equivalent of a ward-level administrative units may only purchase, hire purchase, donation, inheritance and ownership not exceeding two hundred and fifty houses;
• For foreign individuals shall be entitled to own houses as agreed in the contract of sale transactions, hire purchase or donation of housing inheritance but not exceeding 50 years from the date of issuance of certificates and may be extended under the provisions of the Government if required; housing ownership period must be specified in the certificate;
• Where foreign individuals married to citizens of Vietnam or Vietnam to marry foreigners settled in the houses owned stable, long-term and have the rights of owners of housing as Vietnamese citizens Male;
• For foreign organizations shall be owned housing as agreed in the contract of sale transactions, hire purchase, donation or inheritance of housing but not exceeding the time limit stated in the investment certificate grant for that organization, including extended time; housing ownership period is calculated from the date of the organization certificate and specified in the certificate.

(Luat Viet An)

FOREIGNERS HAVE OVER 3 MONTH VISA CAN OWN HOUSES IN VIETNAM.

Vietnam will allow the foreign citizens to buy house for the first time with a simple requirement, they must enter Vietnam legally. The new law is extended the rules that currently apply to apartments, according to the amended Housing Law which take effect on July 1 2015. This allow the Foreigners own any property for a maximum of 50 years and enjoy the same rights to lease transfer or sell the property as Vietnamese citizens.

The law passed with 77.46 percent approval in the National Assembly with some special notes:

- Foreign entities who have invested in housing projects in Vietnam, foreign-invested enterprises; branch and representative offices of foreign companies in Vietnam, foreign investment funds; and foreign bank branches will all be entitled to purchase real estate under the law.

- Foreign individuals and entities will only be allowed to buy, receive, or inherit apartments and houses in commercial projects and not in areas that limit or ban foreigners.

- Foreign individuals and entities are able to buy a maximum of 30 percent of apartments in a block and 250 houses in a given ward.

- Individual foreigners may extend their home ownership after 50 years, according to their need. The government provide further details about the extension process in the future.

- Foreign property can be put out to lease for any “purposes that is not banned by law” but must also inform the provincial house management agency before leasing the property.

- Foreign property owners will also be subject to the nation's property taxes.

- Foreign entities can already buy property to house their employees, but they are not able to lease or use it toward any other purpose.


According to Phan Trung Ly, chairman of the National Assembly’s Law Committee, the legislature passed over proposals to tighten home ownership restrictions for foreigners. A majority of voting lawmakers said the open policy will attract more foreign investment without jeopardizing national security.


(Vietnam Immigration Org)

Real Estate Investment Trust: Still not popular in Vietnam

Real Estate Investment Trust (REIT) is considered an effective channel for capital mobilization for the real estate market and is a good tool for investors. In developed countries, this fund is very popular, but in Vietnam, despite the legal basis is quite adequate, but there is no public fund was established REIT cabinet.

REIT is essential for the real estate market ...
The real estate market (real estate) is still dependent mainly on bank credit lines. But these funds do not have the stability as monetary policy dependent and often fickle.

Besides bank credit funds, many investors towards real estate projects also idle money from investment funds and people. In recent years, a number of real estate businesses in the country has led to a number of fund inflows from foreign investors such as VinaCapital, Jen Capital, Dragon Capital and other funds from a number of Singapore, Japan, Hong Kong .... But these funds also did not lower interest rates, from 5-7% / year, and together with a series of demanding credit from donors.

According to Diep Nguyen, Chairman Reenco Red River, if built a new capital will bring many benefits to businesses and real estate market in the long term. Currently, although the market is developing well, but the case of large banks to credit is also a risk. Therefore, the REIT model is a good direction, in order to generate long-term cash flow for the property market.


Ms. Nguyen Hoai An, Director of Research and CBRE Consulting Hanoi said, REIT's operating model similar to mutual funds (mutual fund), in which the investments and the first decision investments in specific real estate (investment or acquisition to operate the loan). In developing countries, usually these funds are listed on the stock market, the investments through the acquisition of fund certificates.

According to Ms. An, the benefit of this model is to create a source of regular income and stability for investors through investment focus on property type recurring income.

... But there is more to be afraid
GS. Dang Hung Vo, former Deputy Minister of Natural Resources and Environment said that, since 2012, Decree 58/2012 / ND-CP has one chapter is Chapter 8 separate regulations on real estate investment funds with 2 things (how including Article 90 and 91) on investment activities of real estate investment funds. Then, in 2015, the Government issued Decree continued 60/2015 / ND-CP amending and supplementing some articles of Decree No. 58 of Decree 60 has 3 new content related to real estate investment funds .

Reportedly, the Ministry of Finance has issued Circular No. 228/2012 / TT-BTC guiding the establishment and management of real estate investment funds to guide the implementation of Decree 60.

Such is the legal basis for the establishment of REIT has and this is the model to be appreciated, however, still does not have the internal REIT was established.

Explaining this reason, the experts say, the current is still internal problems not caused REIT was formed, one of the problems is that the perception of investors and domestic business model not informed, even afraid.

Some REIT funds operating in Vietnam today as: VNL, VOF, Indochina Land Holdings, Aseana Properties Limited (APL), Vietnam Property Fund (VPF), ... are established by foreign countries and is listed on stock market in the country or work in Vietnam as a foreign investor.

In the period 2011 - 2013, in the quiet of the Vietnam real estate market, these funds are lost, except for a few funds invested in some real estate tourism is operating effectively. Perhaps, this is why investors and domestic businesses are afraid to want to establish internal REIT.

Besides the above-mentioned problems, according to Ms. An, current REIT can not develop in Vietnam because the market is the lack of professional fund managers with experience in real estate investment. While the quality of the supply of real estate is not a guarantee though pretty much increased in number in recent years. On the other hand, incentives for investors to participate in this model is not really clear, as for many people freak out, although willing to learn in order to establish or participate.

(By Đầu tư chứng khoán)

The number of foreigners owning houses in Vietnam is still modest

In recent discussions with the press, Mr. Stephen Wyatt - CEO of JLL Vietnam shared his views about the positive impact and the difficulties in making policies that allow foreigners to buy and own Vietnam home into practice.

- The issue is open for foreigners to buy houses in 2016 will develop in the trend does remain a question mark. He can tell his opinion?

The new policy allows foreigners to own houses in Vietnam from May 7/2015 effect had a positive impact on the property market in recent times. It is clear from the new policy takes effect, JLL recorded home sales to foreigners has increased significantly, and the rate of sales in many projects also increased significantly. As in a number of reports published by JLL, total number of units sold in the market in 2015 more than doubled in 2014, partly thanks to a sharp rise in both supply and demand, as well as the active support from commercial banks for investors and homebuyers. We expect this trend will continue in 2016 and the story of foreigners to buy houses in Vietnam and is still the subject of interest. We think there will be more interest from investors in the region interested in real estate in Vietnam.


- There are mixed opinions about the development of this policy. A State party that has made positive moves to loosen the conditions for foreigners to own houses in Vietnam, one side says there are contradictions about the transfer of money from banks to buy houses abroad in Vietnam; as well as the procedures of the lending credit institution, what do you think?

Concerning the new policy allows foreigners to buy and own houses in Vietnam, we believe that this policy is absolutely positive impact, have expressed concern to the Government of Vietnam to the development the domestic real estate market, and the fact also is bringing good results.

But there are still many difficulties in the implementation of this new policy. The executable instructions are unclear and are specific to particular alien object has not lived in Vietnam for a long enough time, and there are many problems related to the issue of transfer of money to buy a house and the conditions relating to financial assistance from the bank. In fact not many mighty banks in supporting foreign investors carried out the necessary procedures for purchasing real estate in Vietnam.

We think there should be more closely coordinated between the state agencies and institutions as well as credit project developers in attracting and expanding the audience to buy houses in Vietnam. JLL has been and will be organized events in other markets in the region to introduce the domestic real estate products and also has received a lot of interest from foreign investors. Partly because markets in the region such as Singapore and Hong Kong are no longer attractive as before, partly thanks to the easing policy allows outsiders who owns real estate in Vietnam.

- In the first two months of 2016, the number of foreigners to buy houses in the two major cities of Hanoi and HCMC have no positive changes?

The policy allows foreigners to buy a new home also applied recently. Decree 99/2015 / ND-CP guiding the implementation allows foreigners to own real estate in Vietnam recently with effect from 12/2015. When this policy was born, is a positive factor to attract the attention of a lot of real estate investors, however, this policy makes to the money to buy a house or not, is still modest. Currently the number of foreigners to own houses in Vietnam, if compared with other countries in the region is not much.

- What is your opinion about the open-door policy for foreigners to buy houses in Vietnam, there is no difference compared to other places?

We can compare with Indonesia because the government has also implemented a new policy that allows foreigners to own real estate. Basically, foreign workers will have the same rights to the people of Indonesia in the purchase of apartments. Time owned apartments are a total of 80 years, first issued 30 years, then 20 years to renew and extend the last time was 30 years. However, this policy is very small impact on the domestic real estate market, as required to be buying a home is to have a visa / work permit in Indonesia on an ongoing basis, otherwise the property will be withdrawn. There will not be many foreigners to stay in Indonesia constantly under 80 years to be able to continue that owns the property was purchased.

It can be said that conditions permitting foreigners to buy houses in Vietnam more open, because then can transfer to others. This has an impact on the domestic real estate market will boost demand for investment as well as the desire to own real estate in Vietnam of many foreigners.

- Thank you!

(According to Nhịp sống thời đại)

JLL optimistic about Vietnam real estate market in 2016

The highest representatives of the Group of Jones Lang Lasalle (JLL) Vietnam - Stephen Wyatt, general manager, said that the real estate market in 2016 will remain positive.

Stephen Wyatt analyzed in first 3 months of 2016, although GDP growth rate is lower than the same period in 2015, but generally still higher than the 2011-2014 period. It is still too early to say the economy has leveled off this year or not, because the economic growth of Vietnam is characterized by rising towards the end of the year.

In addition, FDI disbursement as well as new subscribers in the 1st quarter of 2016 increased over the same period last year shows that Vietnam continues to be attractive destinations for foreign investors.

Specifically, in Q1-2016 there are 40 countries and territories investing in Vietnam, in which South Korea takes the lead with 513 million registered capital, followed by Singapore with 449 million and Taiwan with 386 million dollars. Real estate is the second largest sector in attracting FDI with total registered capital of nearly US $ 240 million from 11 projects.

Tourism activities have a very good start with the number of international visitors to Vietnam reached a record: more than 2.4 million in the quarter, up 19.9% ​​compared to the same period of 2015. In particular Chinese visitors to increase to 65.9% Vietnam over the same period last year, the number of tourists from South Korea rose 30%. The market benefited from visa-free policy grew from 6% - 28% in the quarter 1-2016.

These positive signals have a positive impact on the operations of most of the real estate segment. On the housing market, both HCMC and Hanoi are continuously reported positive operating results when there are nearly 20,000 apartments open new units in the quarter, the total volume of apartments sold approximately 18,000 units also - an impressive figure compared to a few years ago.

It can be seen that the market is continuing 1-2016 quarter trading trends of 2015, many of the projects recorded sales rate reached 90% right out of the sale. Apartment price continued to rise 1-2% QoQ. "We believe the market is still developing in this direction in the near future," said Stephen Wyatt assessment.

On the office market, in both cities, the amount of absorption area are closed higher, with many successful transactions in the quarter with over 1,000m2 area each lease. In the next 12 months, JLL said that due to the central office supply is quite limited, so the office relocation to suburban areas will continue. Office rents forecast tends to increase at the central location.

The retail market will be more difficult due to the competition between domestic retailers and international as well as a new supply of competitive pressure are stiffer for the existing retail centers. In 2016, the market is expecting more in the presence of Takashimaya, one of the leading retailers from Japan, promises to bring a new experience for shoppers Vietnam.

"The real estate market Vietnam has experienced nearly 25 years of development with various ups and downs. Currently, the market is growing and maturing at a faster rate than ever before. The parties to the market from project developers, investors and banks to the authorities of the state are more alert and careful in every action and its role.

JLL quite confident in the development of real estate market in the near future, and specifically in 2016 will continue to be a promising year despite difficulties ", the highest representative of JLL Vietnam confirmed.

(According to Tuoi tre online)