Randy Lynch, founder and seasoned traveller of U.S. based luxury travel firm Kipling & Clark has compiled a list of his favourite hotels in the Asian region which has now been released by the guide.

The list features the top ten luxury hotels in all of Asia where wary travellers can rest their bodies after a hard day of sightseeing or shopping. We have listed them in order of rank below:
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Global economies have been harshly affected by three major factors; soaring food prices all over the world, the disruption in the financial and credit card markets within North America and the massive increase in energy prices for net consumers.

Despite all the impact these events have had on the global economy, the U.S. posted a 0.6% annualized rate of GDP growth in the first quarter this year. Naturally, all these factors affect the office market worldwide. CB Richard Ellis has released their latest report of Global Market Rents that indicates office rents and occupancy costs worldwide. Like last year, London’s East End is topping the list once again for being the most expensive markets.

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According to Vietnamese news sources, Vietnam’s residential property market is experiencing heavy losses at the moment. Gone are the days of investor surges racing to invest their dollars, in a hope for a tidy profit.

Due to the current global property gloom, many domestic Vietnamese property markets are now facing falling property values. By far the biggest losses in investments have been seen at the high end market with drops of up to 50%.

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^{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.

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^{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.

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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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Demand for property has increased dramatically in Vietnam since the government issued new laws that allow the lease of land for 70 years and then extensions without any payments. Thai developers are looking to bid for land plots in Vietnam for development. The Hanoi government’s issue of Decree 84 earlier this year brought Vietnam one step closer to opening up its real-estate market to foreign ownership, effectively leveling the playing field for international developers.

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At the end of July we briefly mentioned Vietnam as an example of industrial development as an indicator to spotlight possible real estate opportunities, noting that the government were relaxing the rules on foreign direct investment in property to a limited extent. While there certainly seems to be a lot of opportunities in investing in Vietnho+chiam generally, the picture regarding real estate investment remains relatively obscure. Vietnam has been liberalising it economic system since the mid 1980s when the government embarked on its programme of ‘renovation’. Growth in recent years has been rapid and compared to India, China or the Philippines there has been greater success in removing extreme poverty measured by the numbers of people living on less a dollar a day. However, investors need to remember that Vietnam is a one-party state and the country’s rulers seem to be taking a cautious attitude to opening property investment to foreigners, in the interests of maintaining their own ability to influence economic development.

^{Ho Chi Minh City landscape [photo credits to waa on flickr]}

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Vietnam´s real estate market is picking up steam as the country moves towards admission into the World Trade Organisation (WTO), according to industry insiders.

The number of real estate transactions in the third quarter of the year increased 20% over the first six months of the year, and 25% over the same period last year. The trend indicates that the domestic real estate market is recovering from its long slump.

The prospect of a WTO safety net has inspired new waves of foreign investment in Vietnam, reviving the dormant property market.

“The news of Vietnam´s upcoming WTO membership has spread both at home and abroad,” said Tran Trong Hieu, director of the International Urban Development and Investment Co. “This has helped wipe out many foreign investors´ doubts about the country´s legal system.”

“Those of us involved in investment brokerage began to feel a higher comfort level from foreign
investors after Vietnam´s likely WTO accession was announced,” said Vu Quang Hien, director of the Property Management and Consulting Joint Stock Co (Citiplus).

As real estate investment requires large volumes of capital, investors want the government to ensure the security of their investments and protect their interests, Hien explained.

“When Vietnam joins the WTO, the country will have to abide by international rules that make investment safer,” he said.

Do Thi Loan, general secretary of the Ho Chi Minh City Real Estate Association, said that her association alone had received more than 20 delegations this year from such countries and territories as South Korea, the US, Australia, China, Singapore, Hong Kong and Taiwan.

Most were highly interested in real estate in Vietnam, particularly in major cities, said Loan, and many memoranda of understanding have been signed to develop office buildings, luxury apartments, shopping centres and housing for low-income earners.

Many foreign-invested real estate development projects that have been stalled for some years during the recent slump in the market have recovered on the new foreign investor confidence.

Nguyen Duc Kiet, deputy general director of Hong Kong´s Larkhall Group, said the group received an investment license from the Vietnamese Ministry of Planning and Investment (MPI) in 1997, and planned to set up a joint venture with a Vietnamese partner to build an office building in HCM City.
Following the 1997 Asian financial crisis, the project stalled and did not resume until 2005, Kiet said, at which time Larkhall became the sole investor.

“Investment in the project has grown from US$62 million in 1997 to US$125 million at present,” he said. “The scheduled completion date is now in 2008.” Truong Ngoc Dieu, administrative director of the Happy Square project of Taiwan´s Fei Yeul Group, said the group was licensed by the MPI to set
up a joint venture with a Vietnamese company in 1995 to build a $468 million complex which would have included an office building, a hotel and a shopping centre, but the project was postponed.

Development resumed in mid-2006 solely under the Fei Yeul Group without the participation of domestic partners.

Many new projects were also being developed, including the Gold Sai Gon Plaza, a joint venture with a Taiwanese company, and Sai Gon Sport City, fully funded by Singapore´s Keppel Lang. The Phu My Hung joint venture also planned a $16 million project to build an additional million square metres of apartments by 2010.

Real estate market experts believed that demand for office and apartment space would mushroom following WTO accession.

“We have received many investors from Tokyo, Singapore and Malaysia who have come to us expressing their desire to invest in Ho Chi Minh City property,” said MarcTownsend, CB Richard Ellis (CBRE) managing director.

Retail shopping centres have also attracted the attention of many investors, said Richard Leech, director of CBRE´s Hanoi office. Many new retail centres such as Hon Ngoc Viet in Nha Trang, the Opera in Hanoi and Hum Ho-Sai Gon in Ho Chi Minh City were under construction, he noted.

Market experts said that land suitable for the construction of large projects has become rare, creating opportunities for some domestic investors to sell or lease land use rights initially obtained for now-failed projects. Sensing the demand, the Asian Commercial Bank´s real estate company last week opened a property transaction floor in Ho Chi Minh City.

Source: Asia Property Report

Related:

• Vietnam property market to boom? [THANH NIEN News]
• Vietnam set to join the WTO today [Bangkok Post]
• Real estate market to see new wave of investment [VNEconomy]

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