 Japan firms eye real estate projects
Saigon Times - 10/5/2016 8:22:19 AM
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A number of Japanese firms are looking to inject a total of more than US$2 billion into property projects in Vietnam.
Than Thanh Vu, chairman of investment and trade firm Sao Khue which has just organized a promotion trip for Vietnamese real estate companies to Japan to find partners, said many Japanese companies are looking for opportunities to invest in Vietnam’s property market.
Vu said the Japanese companies including Sumitomo and Toshin said they are exploring prospects for investment in hotel, housing, serviced apartment, trade and office projects in HCMC and Hanoi.
For instance, Sumitomo plans to pour more than US$100 million into an office project while Toshin, the owner of Takashimaya store in HCMC, plans a US$200-million project.
Vu said the Japanese investors want to cash in on expanding Japanese-Vietnamese ties, high economic growth of Vietnam, and increasing incomes of people who need to buy quality products including homes.
However, Vu said it is hard for Japanese firms to find land in the central business districts of HCMC and Hanoi and land procedures in this market remain complicated.
Therefore, Japanese firms will make use of merger and acquisition deals to invest in property projects in HCMC and Hanoi in the coming time. Vu said the companies have asked Sao Khue to pick high-end housing and hotel projects for M&A.
Japanese companies have strong financial capability and a wealth of experience in the real estate sector, so they can acquire projects developed by local investors in prime locations.
According to Tokyo-headquartered Recof Corporation, which provides advice on M&A deals, many Japanese firms are looking to get involved in M&A deals in the property sector despite risks.
Masataka Sam Yoshida, senior managing director of Recof, said Japanese enterprises were not interested in the real estate sector in Vietnam 20 years ago but things have changed.
Kajima Group has inked an agreement with Indochina Capital to establish a 50-50 joint venture to invest in real estate projects in Vietnam, with US$1 billion planned for the first 10 years. The joint venture will also acquire projects developed by domestic enterprises.
Mitsubishi has struck a deal with Bitexco Group to form a joint venture to develop housing projects in Hanoi. The joint venture is part of the Vietnamese business group’s residential complex The Manor Central Park comprising areas for trade, offices for lease, schools, entertainment and sports.
The joint venture plans to build 1,276 apartments at a cost of US$290 million in the initial time with 55% of it contributed by Bitexco.
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