South East Asia Property

Trung Hoa Nhan Chinh Residential in Hanoi
Trung Hoa Nhan Chinh Residential Towers in Ho Chi Minh City

Vietnam is facing yet another invasion, this time from foreigners armed with capital.

Local Vietnamese investors are currently experiencing difficulties obtaining finance from Vietnam based banks tightening their lending criteria. This has created “Golden opportunities” for foreign investors according Vietnam based news website VietNamNet Bridge.

Malaysian Buyers Guide - Overseas Property Mall

Where to Look

Kuala Lumpur is in a class apart as the country’s business capital and definitely the focus of most activity in residential, retail and office real estate. The city’s central business district is currently undergoing rapid change. However, KL’s long term prospects are not guaranteed despite all the activity. Singapore (pop. 4.5m) is only as far away as London is from Paris and this proximity means that Kuala Lumpur only has Malaysia (pop. 27m) as its hinterland. Given that KL and the KL – metropolitan region’ have populations of 1.8m and 6.9m respectively, it seems unlikely that the city can surprise by growing into a different league, either in terms of wealth or size. However, genuine friendliness and cooperation between the two countries could herald impressive new opportunities. WTW’s (CH Williams, Tahar & Wong) series of annual property reviews provides a good breakdown of developments around the country.

Kuala Lumpur Skyline Mascot

With a strong and very optimistic outlook in China’s domestic real estate market, leading Chinese webites SINA Corp & have each announced a move into real estate web marketing.

Sina logoChina’s larget web portal, SINA is to embark on a joint venture with real estate service provider, E-House (China) Holdings Limited in a bid to launch a range of real estate and home decoration web channels. The JV would involve E-House China providing proprietary real estate content ranging from its property database & analysis system to its Chinese Real Estate Information Circle system (which contains transaction data on land, residences, offices, as well as commercial buildings in 30 major Chinese cities).

Mid to low-price Bangkok condominium developers will be under pressure this year as liquor tycoon Charoen Sirivadhanabhakdi enters this highly lucrative housing segment.

TCC Capital Land announced plans to launch its first non-luxury development, offering units from around £21,000 in Soi Sukhumvit 101/1.

TCC Capital Land is a joint venture between Singaporean-based CapitaLand and TCC Land, which is Charoen’s property development division. The middle-market condominium segment will be handled by S&S Residential.

“A large property firm is negotiating to form a joint venture or buy a major stake in a smaller company, which focuses on lower-middle-income-market condominiums,” said an un-named industry source.

“The buyer wants to strengthen its competitive edge against others, particularly TCC Land, which owns a land bank worth up to Bt100 billion nationwide.”

Ha Noi, Viet Nam

A State Bank of Viet Nam official said, ” Ho Chi Minh City’s real estate market is accounting for around 35 trillion VND or 10 percent of the total loans offered by commercial banks operating in the city”.

Ho Huu Hanh is a director of the State Bank of Viet Nam’s Ho Chi Minh City branch. He also said that since early this year, despite the fact that commercial banks have raised their lending interest rates by 0.05-0.15 percent a month, they have also seen an increase in the number of clients queuing for loans to invest in the property market.

By the end of 2007, the An Binh Commercial Joint Stock Bank had lent property developers 1.2 trillion VND, which accounted for 20 percent of its total lending. The rate was also similar at Sacombank, Techcombank and ACB.

K H Sim is a property developer. Specifically, he is the Managing Director of The Malaysian arm of Sydney based, Bluestone Group and based in Kuala Lumpur.

Bluestone Malaysia are responsible for a number of recent developments all extremely successful. One in particular, the Taragon Puteri YKS in Yalan Lap Kwan Sen, was 100% sold out before completion. Another in downtown Kuala Lumpur was released this month.

But K H Sim is developing a reputation in another area of property development. Rescuing distressed building projects that have been abandoned in Kuala Lumpur.

As Singapore’s property market begins to slow, many Singaporean property investors are beginning to cast their eyes over to Vietnam as the next likely boom market.

Ha Noi Opera House

Vietnam’s political issues seem to be well in the past now and the country has experienced steady, stable growth for the past few years. Recent statistics suggest demand heavily outstrips supply at present, as the Vietnamese standard of living is rising, whereas the property supply is low. Apartment and office rentals are experiencing an average of 95% occupancy, suggesting room for expansion.

CB Richard Ellis’ recent report states that Hanoi has only 4,934 hotel rooms rated at three to five stars, which is extremely low when compared to Bangkok at over 20,000.

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Debenham Tie Leung (DTZ) recently released a report based on an extensive survey that shows Bangkok as the fifth cheapest office space in the world. The report – DTZ’s eleventh annual ‘Global Office Occupancy Costs Survey 2008’ ranks Bangkok at 133rd in terms of costs per office workstation, with a cost of $2,840 per annum.

DTZ is a global real estate advisor who works to create leading edge property, investment and business solutions worldwide.

The survey puts Surayaba in Indonesia at the bottom of the chart with a cost of $1,550 p.a. Next is Manila at $1,670, Jakarta at $2,170, Tianjin at $2,830, follwed by Bangkok in fifth place.

The survey confirms Richard Ellis’ assessment that London is still the most expensive office market in the world, even discounting the West End. The DTZ report assesses London’s cost per workstation per annum at $27,540. Paris is second at $20,690, Central Tokyo at $18,430.

Datuk Ab Hakim Borhan mayor of KL has a vision: Public information like building floor plans, application for business licenses, the filing of reports of accidents, bus schedules, or data on the city’s history – all at the push of a button or swipe of a barcode.

By using high-tech gadgets, all public housing officers would be able to scan a barcode installed at the building’s entrance and information such as the number of tenants, age and the duration of their tenancy will all be instantly available.

Tourists would no longer need tourist guides, as all buildings in Kuala Lumpur will have barcodes installed at the entrance whereby by just displaying a cell phones, information on the history of the building would be provided.

While global investors worry about the United States subprime crisis, the mounting capital outflow from the US to Asia is pumping up certain Asian property markets. One in particular, Singapore, has seen rents for private residential units rise by 31.2% from the middle of 2006 to 2007, and rental rates for prime office space occupied largely by foreign companies has risen 13.9% in the second quarter of 2007, reaching an average of S$10.33 (US$6.84) per square foot.