US real estate developers are turning to a new, fast-growing source of cheap capital known as EB-5 from Vietnam, reported the Wall Street Journal on March 5.

 

The Southeast Asian country is rapidly gaining on China as one of the biggest participants in the foreign-investment initiative. The programme offers green cards in return for investing in job-creating US businesses or real-estate projects.

 

About 20 percent of EB-5 investment in American real estate now comes from Vietnam, putting it behind just India’s 25 percent and China’s 30 percent, according to the journal.

 

Vietnamese nationals received 693 EB-5 visas last fiscal year, an increase from 471 in 2017, it said.

 

Developers advertising their projects to Vietnamese investors including Related Companies, which is looking for 380 million USD for the third phase of its Hudson Yards development, and Extell Development, which is seeking investors for its Times Squares Hard Rock Hotel project.

 

The journal quoted immigration attorney Phuong Lee as saying “In the past, any large-scale capital raise, anything over 50 million USD or 100 million USD, particularly in New York, you had to go to China. But most of the big New York real estate developers who were in China before are certainly all in Vietnam now.”

 

However, despite Vietnam’s growing interest in EB-5, overall investment volume has still dropped significantly, and the country’s estimated wait time for than seven years for a visa could eventually become a problem, it noted.-VNA