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Foreign firms also bog down in real estate projects

Experienced and financially powerful, foreign investors have also suffered from the real estate crisis in Vietnam.

A lot of foreign invested real estate projects were registered with huge capital, but they have been left “immovable” since the day of licensing.

Ha Long Star in Quang Ninh province, Da Phuoc urban area and Jade Center in Da Nang City or Byooyoung international residential quarter in Hanoi, has the registered capital of between 170 million and 500 million dollars.

However, the figures have existed on paper only. To date, the disbursed money remains very modest. The area reserved for the Booyoung international residential quarter remains a wild land over the last six years, since the investor has not found loans from neither foreign nor domestic banks.

Other real estate projects have been half-done, or delayed for an indefinite time. These include the international university urban area and the international financial center in HCM City registered by Berjaya Group, capitalized at 4.5 billion dollars.

Lacking capital to execute the projects is the reason most of the investors have cited to explain their delay in the project implementation. The investors do not think that their products would be salable in the context of the frozen real estate market.

Meanwhile, An Khanh Company, a joint venture between South Korean Posco E&C and Vinaconex, though having sold 1500 villas and 300 apartments of the Splendora project in Hanoi, still has been put on tenterhooks.

Over the last month, the company has repeatedly received complaints from buyers about the quality of construction materials which was believed to be worse than the committed quality. The customers now want to delay the payment for the apartments and villas, while having requested to slash the sale prices of the products, since the real estate price in Hanoi has dropped by 30-40 percent.

The customers, who registered to buy villas built in the second phase of the project, complained that in order to obtain the right to buy the villas, they had to buy one more apartment at the prices of 37-38 million dong per square meter.

Meanwhile, as the real estate price has dropped sharply, with the sum of money, they now can buy an apartment with the same quality located nearer the central area of the city.

Since the discussion between buyers and the investor has not come to an end, the investor still cannot collect enough money to pay bank debts.

A lot of customers have reportedly cancelled the apartment and villa purchase contracts they signed before with foreign investors. The updated report of Vinaland showed that in the first eight months of the year, only 58 apartments and villas at the projects invested by the fund were sold.

The projects include the Dai Phuoc Urban Area in Dong Nai province, the My Gia Urban Area in Nha Trang City, the villa area belonging to Da Nang Beach Resort and Azura apartment bloc in Da Nang City.

Seriously, a lot of customers did not make payment on schedule or have canceled the contracts. As such, if not including the customers who have run away, only 13 products have been sold.

The Parkcity project by International Urban Area Development Joint Stock Company, a joint venture between Vietnamese Vinaconex Hoang Thanh and Malaysian Perdana Parkcity, is believed to face the most tragic situation. There has been no sign showing that the investor would resume the project implementation after it has built the foundations of the villas.

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