Banner 01
Banner 02
Banner 03
Banner 04
Banner 05
Banner 06
Banner 07
Banner 08
Banner 09
Rental/Month (USD)  ~ 
Bedroom number
Bathroom number

Taking a Bath in Vietnam Real Estate

Ho Chi Minh City got a 68-story skyscraper, Vietnam’s tallest, when the downtown Bitexco Financial Tower was inaugurated in 2010. The building, boasting a helipad at the 50th floor, can be seen from almost every part of the city.


It hasn’t been a celebration for the owner, however. Nearly 18 months later half of the building’s office space is still empty and none of the six retail podiums is open. Annualized interest rates reached as high as 23% late last year, and there are plenty of rumors that the owner is trying to sell the building to pay off construction loans. But the company dismisses them. “Bitexco Financial Tower is our pride; we are not selling it,” says Vu Quang Hoi, chairman of Bitexco, a private Vietnamese company that’s invested in more than a dozen other real estate projects, plus infrastructure, energy and mining. “This is a difficult time for businesses, but it is precisely why we need to continue to invest more.”

Not everyone has the same spirit. There are 20 socalled golden sites in the city--prime spots slated for development--but only two projects have been completed and two are under construction; 16 sites are still vacant. Rent for grade-A office space has dropped nearly 50% since 2009. High inflation, high interest rates and the dong’s devaluation have created what CB Richard Ellis Vietnam calls in a January report “a residential nightmare” as property developers boosted their marketing budgets threefold but can sell less than one-third of what they build. Some of the top companies, both private and state-owned enterprises, are also the biggest debtors, and while none of them has declared bankruptcy, it is tough for them to continue investing with the cost of capital so high. There is a saying in Vietnam these days: “It is time to pick up dead bodies on the market.”

But where are the dead bodies? Another joke goes: “There are no distressed assets in Vietnam.” Vietnamese tycoons keep their dire financial situation private, doing deals quietly as people with cash snap up unfinished office buildings, apartment complexes and other projects at rock-bottom prices. For now, though, most such assets are being taken over by banks. Don Lam, chief executive of VinaCapital, a fundmanagement company, says it is working with at least one major bank, going through the list of bad debtors in real estate to revive unfinished projects. If it works, the model, called a “club deal,” will allow new investors to take on the old debt, on the condition that interest rates be fixed for two years.

With more companies struggling, merger and acquisition activity sprouted last year, and more deals are on the way in 2012. The Vietnam Stock Index, which dropped 29% in 2011, is up 31% so far this year, driven by takeover activity.


Meanwhile, the State Bank of Vietnam is forcing more than ten commercial banks to restructure because of liquidity problems caused by a large number of non - performing loans. Dang Van Thanh, the founder of Saigon Commercial Bank, who in 2010 was among the country’s richest people in terms of public shareholdings, is losing control of the bank.

Table of Contents
Feature India's Funky Boutique Hotels
What Slowdown?
Taking Education Out of India

Another high-stakes player, Pham Nhat Vuong, chairman of Vingroup, finds himself sitting on the tiger’s back. His group of companies is investing in at least four major property development projects across the country. But in December it reported a cash flow of only $220 million, which analysts say is not enough to cover liabilities of $1 billion. His Vincom division has had to sell two office towers in Hanoi and Ho Chi Minh City. Now it is hoping to raise between $150 million and $300 million overseas, most likely in Singapore.

Others are seizing oppor - tunities. Masan Group, which has interests in banking, mining and consumer goods, is on a quest to expand. With more than $600 million in cash on hand, it last year acquired 51% of Vinacafe, a maker of instant coffee and other consumer products. --Lan Anh Nguyen

[ Back ]
Other news
Property market in Vietnam slowing due to high rates and lack of lending
Gamuda property projects in Vietnam doing well despite high interest rates
Vietnam: will property rights solve land disputes?
Vietnam's HAGL plays down ’negative watch’ rating status
Anantara unveils its first property in Vietnam
Mapletree to launch three new property funds in China, Vietnam, Japan
Developers urged to a take long-term view in Vietnam's property market
Gamuda's Vietnam projects doing well despite high interest rates
Property market 'in the spotlight’
Vietnam bank launches lending package for real estate market
Vietnam may push for more houses for rent
Mini apartments go against development trend, experts say
Vietnam's top 10 architecture, property firms recognized
Ha Noi builds property price index
High demand for affordable homes in Vietnam
Lê Quyền
0942577677 ( in Vietnam)
(+84)942.577.677 (in Abroad)
Send a message
Latest Properties Popular Properties Featured Properties
House for rent in hanoi
Copyright © 2009 FULL HOUSE Co., Ltd. (Vietnam). All rights reserved.
Công Ty TNHH Ngôi Nhà Trọn Vẹn (GPKD: 0103257039 do sở Kế hoạch và đầu tư cấp ngày 20/01/2009)
Người đại diện: Lê Kim Quyền - ĐT: 0942.577.677 - Email:
Head Office: No.80 Lane 12 Dang Thai Mai street, Quang An Ward, Tay Ho District, Hanoi -  
Tel: (024)2246.2811/ (024).2246.2822 - Fax: (024)2246.2822 - Hotline 24/7: 0984.868.678/0942.577.677 - Email:
Developed by Full House Property | Privacy Policy (Chính sách)
Facebook Chat
Follow us on: