HCM City Real Estate Market Draws Foreign Capital


HCM City is in serious shortage of luxury hotels, tourist sites and entertainment centres so I want to invest in a casino here,” said Walter Kim, Chairman and Chief Executive Officer of the US’ Sky Group in a meeting with HCM City officials on April 24.

Mr Kim seemed to be very impatient when he ‘forced’ Deputy Director of the HCM City Department of Planning and Investment Nguyen Van Hung to arrange an appointment this Friday.


“I want to build a four- or five-star hotel in Saigon immediately,” the Korean American owner of the Sky Group repeated.


He affirmed Sky Group’s investment potential. “Sky Group plans to invest around US$50 million in projects in Vietnam.”


HCM City Vice Chairman Nguyen Trung acknowledged the fact that the city lacked five-star hotels. It has only 1,500 high-class hotel rooms at present. The Taiwan Industrial and Commercial Association wants to bring a group of 120 companies to HCM City to seek investment opportunities but it has to reduce the number of members to 70 because of a shortage of hotel rooms.


HCM City plans to build over 10,000 additional hotel rooms before 2010 to serve meetings, seminars and foreign tourists.


“HCM City will focus on attracting foreign investment into trade centre and hotel projects to increase the source of supply in the coming time,” Mr Tin said.

Projects calling for foreign investment in HCM City:


- Thu Thiem new residential area is calling for investment in television tower and stadium projects.

- 600ha Tay Bac new residential area: 20 local and foreign investors want to participate in this project, which is now in the design and planning stage.

- 400ha Binh Quoi - Thanh Da ecological tourism zone.

- Can Gio sea tourism zone.

- 6km Binh Khanh bridge, with four lanes and total investment of US$150 million.



Deputy Minister of Planning and Investment Nguyen Bich Dat also affirmed that HCM City would focus on calling for foreign investment into real estate and infrastructure areas. However, he suggested that foreign investors think of real estate in a broader sense – not only hotels but also new residential areas, industrial zones and entertainment centres.


At a talk on investment held in HCM City on April 24 between HCM City leaders, representatives of the Ministry of Planning and Investment, and 250 foreign CEOs, ½ of whom were from Asian groups, many foreign businessmen proposed projects for the HCM City leaders to consider.


A Thai businessman asked: “I saw many motorbikes in Vietnam so I want to build an automobile and motorbike component part plant in HCM City. What conditions do I have to meet?


Many Malaysian companies are very interested in investment in power, oil and gas industry in HCM City.


HCM City’s foreign investment falls in early 2007


As an economic and trade centre of Vietnam, HCM City is an attractive destination for foreign investment. However, the city drew only US$440 million of foreign investment in the first three months of 2007, a reduction of over $1.2 million compared to the same period of 2006.


The Deputy Director of the city’s Department of Planning and Investment, Nguyen Van Hung, admitted this fact, and said that the city didn’t have any big project like the $300mil project of Intel early last year. However, businessmen have said that as land costs and land leasing prices in the city are too high while competition from neighbouring provinces in attracting foreign investment is fierce, it is not surprising that the city’s attraction of foreign capital has declined.


Former Deputy Director of the HCM City Department of Planning and Investment, Director of DNL Investment Consulting Company Luong Van Ly said that to attract more foreign capital, HCM City needed to further reform administrative formalities and increase the land fund.


The current Deputy Director of the HCM City Department of Planning and Investment Nguyen Van Hung said that there were many optimistic signals for HCM City in FDI attraction. “Many big projects are waiting for licences, including a software project in Thu Thiem with $1 billion of investment in the first phase,” he said.


Last year the city lured $2.2 billion of foreign investment.


VNE