Handshake with foreign investors: Vietnam Real Estate Enterprise is ready "big game”

The fact that Vietnamese real estate enterprises actively go to foreign countries to disfuse his images and promote investment activities in the real estate market in Vietnam has shown the bravery, confidence, professionalism as well as business experience in promoting and calling for investment cooperation.

Instead of waiting, Vietnamese real estate businesses have actively gone abroad to introduce their own projects and call for cooperation.

In 2017, the real estate market is vibrant with deals of foreign investors pouring into domestic enterprises, as well as cooperation and project development activities of domestic partners. In 2018, this cooperation trend continued to boom with many big deals.

Entering 2019, observers said that the handshaking trend between Vietnam real estate enterprises and foreign investors will develop even more strongly. This is also an inevitable trend when Vietnam's real estate market is becoming "golden point" on the investment map for foreign businesses.

Where is the position of Vietnamese real estate enterprise in this game? What are the opportunities and challenges that Vietnamese real estate businesses receive from these "handshakes"? Weekend coffee will discuss this topic.  Experts are introduced: Assoc. Prof. Dr. Dinh Trong Thinh, PhD. Dinh The Hien, PhD. Nguyen Tri Hieu.

Reporter: In 2014, when the real estate market restarted a new cycle after a long period of freezing, the trend of associating with foreign businesses of real estate giants began to emerge strongly. Entering 2018, the real estate market continues to witness handshakes between Vietnamese real estate enterprises and foreign investors. How do experts assess this trend?

Associate Prof. Dr. Dinh Trong Thinh: The cooperation between domestic enterprises and foreign enterprises is the development trend of the real estate market in the future. When we have deeply integrated with the world economy, the requirement of cooperation with other countries is an almost inevitable requirement.

Partial cooperation can take advantage of the large market, partly taking advantage of foreign potential customers with high income and efficiency in investment. At the same time, it meets the major trend in the world today, which is the people of the countries who want to expand their horizons and reach to many different countries.

Besides, I think that the handshake between Vietnamese real estate enterprises and foreign investors is a smart step, helping to uncover the great potential of Vietnam's real estate market, raising the level look and position of Vietnamese enterprises.

Therefore, in recent years, real estate has become the second largest foreign invested sector, after manufacturing and processing industry. In the first months of 2019, the market also recorded a surge of foreign investment into real estate.

Dr. Nguyen Tri Hieu: The fact that Vietnamese real estate enterprises cooperate with foreign real estate companies is probably a compulsory trend. The reason is that Vietnam's real estate market is developing strongly. In particular, foreign investors entering Vietnam are in great demand to buy real estate through many forms, including the M&A trend.

Vietnam is an emerging market. This is a market where investors do not have much experience and knowledge. So, they tend to cooperate with domestic businesses. Meanwhile, which is an attractive and potential place, some foreign enterprises have come to pour capital in cooperation with Vietnamese real estate companies to exploit this market. This is a completely inevitable trend.

Dr. Dinh The Hien: The trend of cooperation between Vietnamese and foreign real estate enterprises has appeared since ancient times. But up to now, Vietnam's real estate market has developed more than 10 years ago but typically has many projects of up to several hundred million dollars. This number has become popular, attracting foreign investors.

Not to mention, the current projects, investment costs are very large, but not any real estate business has enough resources to develop itself. Secondly, current projects need capital to develop, not easily make money from paper projects like in the past. These forced businesses to seek new cooperation, strictly control the mobilization of capital on paper while in the past, the transaction was easier.

Want to develop a good project, safe, domestic investors need to attract foreign capital inflows, leading to handshakes of Vietnamese businesses and foreign enterprises.

Reporter: As experts have shared, the trend of cooperation between Vietnamese real estate companies and foreign companies is inevitable. Dear Associate Professor, Dr. Dinh Trong Thinh, from the perspective of an economic expert, why do foreign enterprises "prefer" the trend of cooperation with Vietnamese enterprises instead of unilaterally entering the market?

Associate Professor: Dinh Trong Thinh: In fact, foreign investors are looking forward and seeking more cooperation with Vietnamese real estate enterprises. Because, they see the potentials, the lack of development of the Vietnamese real estate market, especially in the resort real estate segment and the high-end segment.

However, foreign enterprises want to invest directly to make profits very difficult because they do not understand the market. Besides, access to land fund for project development is also a relatively sensitive issue. That is not to mention in Vietnam, the Land Law is different from other countries in the world, there are still many complicated issues that have not been solved. Therefore, foreign investors, if through the way of cooperation with Vietnamese enterprises to invest in real estate, will bring higher efficiency and avoid risks.

In addition, real estate investment requires a relatively large amount of capital, and is under the influence of many different agencies, especially local authorities. This has a great impact on investment efficiency, unlike conventional FDI, using 100% foreign investment.

Therefore, most foreign investors want to cooperate with Vietnamese enterprises to take advantage of existing relationships and facilities of enterprises to invest in legally guaranteed projects, as well as must ensure security and social issues related. Thereby helping projects work effectively for a long time.

Reporter: In cooperation with foreign enterprises, how will Vietnamese real estate companies explore opportunities and challenges?

Associate Prof. Dr. Dinh Trong Thinh: Investment cooperation is an opportunity for many Vietnamese businesses to invest in this segment or other segment, especially high-end segment but lack capital or lack of long-term vision. Cooperation with foreign enterprises with experience and reputation will help Vietnamese businesses learn how to work, long-term investment plans. At the same time, when cooperating with a well-known foreign enterprise to contribute to promoting the image of Vietnam and bringing more foreign tourists to Vietnam, Vietnamese businesses are also expanding their customers’ segments.

However, it should be noted that not all businesses can cooperate with foreign enterprises, because if there is not enough potential and bravery, the cooperation will be difficult to find a common voice and go to the signed effectively.

Dr. Nguyen Tri Hieu: Of course, the opportunities that Vietnamese real estate businesses will receive will be large if foreign investors have strong economic potential and experience in real estate in the world. The "handshake" will bring 3 major benefits for Vietnamese enterprises: The first is capital, the second is the management experience and the third is the ability to exploit the market.

In terms of challenges, I think that, first of all, businesses can be left behind when working with foreign investors. When foreign real estate companies have good and strong financial capacity, Vietnamese enterprises without bravery will be easily dominated and suffered.



Dr. Dinh The Hien: If a business has a strong brand, has a strong development in real estate, then the cooperation helps them have more resources to develop big projects. In addition, Vietnamese real estate companies also receive support from experience and technology from foreign countries.

Reporter: Objectively, it can be seen that in the past, most of Vietnamese real estate enterprises still seemed to be waiting for foreign capital to flow. However, recently, many self-initiative enterprises go abroad to organize seminars to promote and introduce. The most recent example is the news that TMS Group is going to hold a Japan Investment Promotion Conference in 3 cities of Tokyo - Osaka and Fukuoka to open opportunities for Japanese investors to capture the latest investment trends in Vietnam market. How do experts assess this initiative of Vietnamese real estate enterprises?

Associate Prof. Dr. Dinh Trong Thinh: Vietnamese enterprises, especially those investing in real estate are increasingly asserting their position in the market, gradually bringing Vietnam's real estate market. Considerable development. Therefore, there is no reason for them to hesitate to actively seek partners, especially when actively organizing overseas investment promotion workshops to find suitable partners will bring benefits. great benefit. It is a way for us to promote and introduce the landscape and potential of Vietnam and at the same time, we can choose a suitable cooperation partner to bring long-term and sustainable benefits in the future’s cooperation.

In addition, Vietnamese enterprises need large capital, need management methods as well as potential of partners when they can bring tourists as well as big revenue for real estate services. That is also the reason they actively seek their partners in appropriate countries.

For Japanese investors, they have a lot of experience, serious and fair management and working processes, which are highly effective. Until now, Japanese investors have a reputation for being cooperative partners that bring mutual benefits. Therefore, the investment promotion organization to introduce and promote Vietnam's real estate investment trends to Japanese investors to call for investment is a right step and I think it will bring good signals to the market in the coming time.

The fact that Vietnam real estate enterprises actively go to foreign countries to introduce images and promote investment activities in the real estate market in Vietnam has shown that bravery, confidence, professionalism as well as experience in promotion, calling for investment cooperation. In the future, businesses will catch up with this trend to cooperate in a mutually beneficial way, bringing Vietnam's real estate market to a sustainable development and advanced reaching out.

Dr. Nguyen Tri Hieu: I myself also attended an event of a Vietnamese real estate enterprise to bring products to Singapore to introduce. Meanwhile, my feeling is that foreign investors are very interested in Vietnam's market, especially high-end real estate, resort real estate.

Perhaps at the present time, foreign investors are focusing heavily on projects in big cities like Hanoi, Ho Chi Minh City and Da Nang. They are interested in resort real estate, commercial real estate and industrial real estate.

Dr. Dinh The Hien: This is a positive signal. Want to attract capital, experience must have marketing, must look for new investment opportunities, new investors. Overseas, there are many potential investors with financial capacity but they do not have the opportunity to access and understand the market with many risks such as in Vietnam. This is also a new market, difficult to predict, but the profitability is very good. Therefore, the proactive organization of investment promotion conferences and seminars will help Vietnamese real estate projects become more well-known by foreign investors. That is a good thing, promoting the development of the market.

Thank you very much!


(According to Reatimes.vn)