According to real estate company Savills Vietnam, over the past years, Asian investors, including Japanese ones, were only involved in commercial real estate like commercial centres, serviced apartments or office buildings. However, at present, these investors are increasing their activity in the residential segment due to the country’s young population and an increasing middle class, presenting an extremely attractive opportunity.
Shinichi Sakaki, deputy general director of the City Bureau, at Japan’s Ministry of Land, Infrastructure, Transport and Tourism, said the Japanese Government now has policies to support real estate developers promoting investment abroad. In addition, Japan has the experience of developing large-scale satellite towns, so it is trying to ‘export’ that technology abroad.
One of the projects attracting not only investors but also the governments of Vietnam and Japan is the cooperation agreement for the development of Nhat Tan-Noi Bai, aiming to build a smart city north of the Red River.
The project was signed between Vietnam’s BRG Group Joint Stock Company, Japan’s Sumitomo Corporation Asia and Oceania Group and the People’s Committee of Hanoi. With total investment of nearly 4.2 billion USD, this project is considered Japan’s largest foreign investment.
Prior to that, another large Japanese investor, Mitsubishi Corporation, had cooperated with Vietnamese property developer Bitexco, to develop 240 low-rise housing units and two high-rise condominiums among a total of more than 1,000 low-rise and 17 high-rise condominiums at Hanoi’s The Manor Central Park project.
Bitexco and Mitsubishi established a joint venture company, of which Bitexco holds a 55 percent stake and Mitsubishi holds the remaining 45 percent.
Recently, Nidec Group, one of the world’s leading hi-tech corporations and the second largest Japanese corporation on the Tokyo stock exchange (2017), joined forces with escalator firm Alpec to conquer the Vietnamese elevator market.
With many years of experience in the field of high technology as well as research and development of lifts, Nidec will send foreign experts to support Alpec in quality management, labour safety, as well as the research and development of elevator equipment. The cooperation between the two sides promises to launch modern and environmentally-friendly elevator products, in accordance with the aesthetics and economic conditions of the Vietnamese people.
Regarding potential cooperation between the two countries, Le Hoang Chau, President of the HCM City Real Estate Association (HoREA), said, in 2017, Japan replaced the Republic of Korea as the largest foreign investor in Vietnam in general, and in the real estate market in particular. Many Japanese enterprises have participated in the implementation of major urban infrastructure projects funded by the Japanese Government, such as Obayashi, Shimizu, Hitachi, Sumimoto Construction, Mitsui and Maeda.
In addition, there are enterprises that have invested in developing big projects such as Nomura Hai Phong Industrial Zone, or Idemitsu Kosan Company Limited’s investment in Nghi Son Refinery and Petrochemical. Especially, in the past five years, some Japanese investment funds and enterprises have cooperated with real estate companies in Vietnam in the form of buying shares, contributing to investment or lending for developing real estate projects in accordance with Japanese standards and suitable to consumers’ needs.
The potential for investment and business cooperation among real estate companies in Japan and Vietnam is very large, with 1,200 real estate development projects of Vietnamese enterprises in need of cooperation, joint ventures or teaming up with domestic and foreign businesses, especially Japanese ones.
Chau said the cooperation between Vietnam and Japan will bring benefits to both sides, especially in creating opportunities for Vietnamese consumers to access high quality Japanese housing products.
Source: VNA