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)