VNRealestateMarket - The Japanese investors behind a $250 million hotel in Hanoi have been given permission to back out.
The investors of the Lotus hotel have received permission from the Hanoi People's Committee to withdraw from the project, claiming difficulties in raising financial resources to develop it, according to a company source.
The Lotus hotel was given an investment certificate two years ago to be opened in 2010 to cerebrate the l,000-year anniversary of Thang Long-Hanoi.
The project has been delayed due to difficulties in land clearance and compensation, since the Hanoi Peo�ple's Committee could not give "fresh land" to the investors.
After large efforts from city authorities, the land was transferred to the investors last year, after more than a year's delay.
However the investors in turn faced difficulties in raising capital to develop the project. Moreover, the investors also said that they could not meet the city's deadline to open the hotel in 2010, and they decided to withdraw, at a loss of millions of dollars.
Speaking with the Vietnam Investment Review at the beginning of the project, Tamiro Ohama, vice chair of the Riviera Corp, expressed his wish to create a big venue to serve the Japanese community living in Vietnam.
"The Nikko hotel is quite small compared to the large Japanese community in Vietnam, which requires a larger and more advanced facility," Ohama said.
With total investment capital at $250 million, the hotel was designed to have 769 rooms in an IS-storey building on 4.6 hectares.
It was also designed with a banquet centre to serve from 1,000 to 3,000 guests, which was expected to be used for some l,000-year anniversary celebrations.
Japanese investors had to pay a land-lease taxation for the whole 50-year lifespan of the project as well as a non-refundable $2.5 million to the committee's budget.
A source from the investors said that this $2.5 million would be refunded by the committee. Without disclosing details, however, this source said that many Vietnamese companies were keen to replace the Japanese investors to develop this project.
Located in the South-western Sport Culture Park in Tu Liem district's Me Tri commune, next to the National Convention Hall, the project site is one of the most valuable venues in the capital.
The first and only one 100 percent, Japanese-invested hotel so far in Hanoi is the Nikko hotel, which opened 12 years ago.
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Sayonara to $250m Japanese hotel project
VCB offers fund for Him Lam Riverside Complex project
VNRealestateMarket - HCM City Branch of Bank for Foreign Trade of Viet Nam (Vietcombank - VCB) has signed a credit contract with Him Lam Joint Stock Co, in which Vietcombank would provide a credit of 967 billion dong for the company to conduct Him Lam Riverside Complex project.
Duong Cong Minh, chair of the management board cum general director of Him Lam JSC said that the total investment capital of Him Lam Riverside Complex project was 1.563 trillion dong.
The complex would be built on a site of 1.2 hectares, including nine apartment blocks with 11-25 storeys and 821 apartments.
The company would use 500 apartments to serve for some key resettlement projects in HCM City under the method of selling them for the city authorities at the construction cost.
This project is one part of the general construction plan of Him Lam-Tan Hung urban area. The construction is expected to last for 36 months.
In addition, for those 321 commercial apartments in the project, Him Lam JSC has signed agreements with many other banks such as LienVietBank, Sacombank, Agribank, Incombank, VP Bank, ACB, Techcombank and AB Bank for offering supporting loans for the purchasers.
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Japan designer signs up for Eco Park project
VNRealestateMarket - Japanese firm Kume Design Asia has clinched a contract with Vietnam’s Viet Hung Urban Development and Investment Joint Stock Company (Vihajico) to provide consulting and design services for Eco Park project in the northern province of Hung Yen.
In the US$2.5 million deal, Kume Design Asia, a member of the architectural and engineering firm Kume Sekkei, will design the first phase of Eco Park, which is some 13 kilometers from the capital city of Hanoi.
The project developer says the first phase of the 500-hectare tourism and commercial town will cover some 54 hectares. Villas and 20-floor condominium blocks with total floor space of some 160,500 square meters will be developed along with other facilities, such as fitness center, swimming pool, park and entertainment facilities.
The project is envisaged requiring total capital of an estimated US$8.2 billion, and divided into nine phases with the first to be up and running by 2013.
According to Mathew Powell, director of Savills Vietnam which has been chosen as an exclusive distributor for the first phase, the Eco Park will get off the ground in the third quarter of this year, and a sales program will follow.
Founded by several companies in different business fields, Viet Hung Urban Development and Investment JSC is active in several fields, including real estate, hotel, travel, building and services.
Kume Sekkei, established in 1932, provides professional services including urban planning, interior design, structural and civil engineering, mechanical and electrical engineering and project management. Can Tho University in the Mekong Delta region is among the 6,000 projects in 40 nations the company has done so far.
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Work starts on Hai Phong complex
VNRealestateMarket - Construction of the US$1 billion Bac Song Cam service, industrial and urban complex in the northern city of Hai Phong is expected to start in September.
The Viet Nam-Singapore Industry Zone and Urban Development Joint Stock Company is the project’s investor. The complex will cover 1,600ha in Thuy Nguyen. The first stage of the city’s biggest foreign direct investment project is scheduled for completion by 2015.
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Serviced apartments see vacancy increasing
VNRealestateMarket - The serviced apartment sector in HCMC saw a double-digit decline in both occupancy and rents in the second quarter of this year and a further decline is projected in the months to come along with a fall in demand.
Limited supply in the last three years has allowed the sector to enjoy good results with facilities often running with high occupancy. Grade A buildings ran up to 97% occupancy in the first quarter of this year. However, the economic turbulence changed the segment in the second quarter.
Rudolf Hever, senior manager of research and consultancy services of CB Richard Ellis Co. (CBRE), said at a market highlight presentation held in HCMC on Sunday that vacancy was up across all grades, especially in Grade A at 14%, in the second quarter.
Average asking rents were down by 11% to around US$32 per square meter per month in Grade A buildings, by 4% to US$26 in Grade B buildings and by 6% to US$19.5 in Grade C buildings against the previous quarter, according to the property market research company.
Hever said Grade A buildings were suffering as tenants switch to cheaper serviced apartments to save costs. Meanwhile, Grade B and C buildings are also facing difficulties as expatriates leave Vietnam or relocate to non-serviced apartments.
The market is hit as most serviced apartments in the city are designed for expats who have reportedly been returning home as multinational companies trim budgets for staff housing given the economic downturn.
Hever said landlords had recognized tenant predicaments and had responded with rent reductions, incentives and shorter leases, in some cases as little as one night making competition with hotels for guests.
“Landlords have become more flexible, offering weekly or even daily rates, making serviced apartments a fierce competitor to four and five star hotels,” Hever said, adding that the segment was now competing based on age of property, facilities and décor.
Hever projected a drop in demand for serviced apartments and downward trends in rents and occupancy in the months to come.
Moreover, the small market will be impacted as new supplies are on the way, plus the increasing stock of apartments for lease in several districts in the city will create more competition for serviced apartments.
Among the future supply, the Intercontinental Service Residences of Kumho Asiana Plaza project in downtown HCMC and the Crescent being developed in the new urban town Phu My Hung in HCMC’s District 7 will enter the market this year, adding another 560 serviced apartments to the supply.
There are 48 buildings from grades A to C, including 2,400 international and local serviced apartments, for lease in HCMC, mainly in the central business districts.
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Hanoi real estate market witnessing virtual waves
VNRealestateMarket - In order to sell land and houses, speculators have created a lot of ‘artificial price fevers’ to urge people to rush to buy real estate for fear that the prices would increase further.
Real estate prices pushed up in accordance with ‘virtual demand’
Real estate prices in Hanoi have been staying firm, which has led to decreases in successful transactions on real estate trading floors.
Meanwhile, according to Pham Trung Ha, Director of Hoa Phat Real Estate Company, land and apartment prices at many projects in urban areas were increasing sharply.
Prices increased by 20-30 percent in just a few months, or even by 60 percent, because investors ‘surfed’ on their investments. After prices at projects reached overly high levels, and could not be pushed up further, investors ‘jumped’ to other projects.
Ha said that these ‘surfing investments’ has led to the fact that more and more ‘hot places’, where prices escalate rapidly, have appeared in Hanoi’s market. However, the areas cool down when prices reach high levels.
In Duong Noi and Van Khe urban areas, the real estate price was just 20 million dong per square metre after Tet, but has risen to 28-30 million dong per square metre now.
At Van Phu urban area, the land price has surged to 20-22 million dong per square metre.
After the land prices reach high levels in some areas, the price increases will stop and transactions will become fewer. After that, the ‘land price fever’ will be transferred to other areas.
For example, after the price fevers in Van Khe, Van Phu and Duong Noi areas finished, fevers were seen with Vuon Cam or Geleximco projects. The land prices at the projects increased by 20-40 percent in just a short period. Currently, the land price at the projects is hovering around 20-22 million dong per square metre.
However, the fevers at Vuon Cam and Geleximco projects have also finished because they are now attacking more distant areas: the Van Canh new urban area, Tan Tay Do and the northern area of Highway No 32.
The land at Van Canh and Tan Tay Do urban areas is now going for 16-17 million dong per square metre. At the northern area of Highway 32, the price has been pushed up to 20 million dong per square metre.
However, as ‘hot places’ like Van Canh and Tan Tay Do have seen prices reach overly high levels, investors have lost interest.
The apartments at 34T buldings, or 24T1 or 24T2 in Trung Hoa Nhan Chinh areas now also have high price levels from 29 to 35 million dong per square metre.
Therefore, the prices of the buildings invested in by Vinaconex in Trung Hoa Nhan Chinh area are not likely to increase further. That explains why the buildings are still on offer on trading floors, but buyers are hesitant to buy them.
There will be many ‘artificial waves’
The information that Hanoi authorities have asked the Prime Minister to allow the resumption of 240 real estate projects in the former Ha Tay province has been applauded by real estate investors in Hanoi. If the 240 projects get the go-ahead from the Prime Minister, Hanoi’s real estate market will see new ‘fever places’.
However, analysts say that investors will have to wait six months more to see new products launched onto the market. Therefore, Hanoi’s market will have to operate now with the available products.
The analysts say that as the prices in the areas are high already, in order to successfully sell products, speculators will have to use tricks to create new virtual fevers to make people worry about new price increases. (VNN)
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