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CBRE Vietnam Real Estate Spotlight – W24 2018

NA delays adoption of Law on special economic zones, Quang Tri plans to build airport through PPP, HCMC to build new opera house in Thu Thiem…


NA delays adoption of Law on special economic zones


Vietnam Economic Times

The government and the National Assembly Standing Committee have agreed to ask the legislature to delay the adoption of the draft Law on Special Administrative-Economic Units to have more time for research and completion. The delay will be between the fifth and sixth sessions of the 14th National Assembly. Also aims to successfully build the 3 special administrative-economic units while ensuring national defense and sovereignty and meeting the aspirations of legislators, voters and people nationwide. Regarding land lease duration, the government will consider and submit regulations to the National Assembly, as prescribed in the Land Law. There will be no regulations on a special land lease of up to 99 years at special economic zones.




Vietnam Must Tread Carefully to Win Investment Grade, Fitch Says


Vietnam mustn’t sacrifice stability for high-speed growth if it’s to become an investment-grade economy, warned Fitch Ratings. “The challenge for policies will be to sustain high economic growth without sacrificing the gains made in macro stability, which were the basis for our recent rating upgrade,” Schwartz said, head of sovereign ratings in Asia Pacific for Fitch in an interview in Hanoi. “The government is aware of and making progress in the key areas of structural weaknesses and challenges.” Vietnam won a sovereign rating upgrade from Fitch in May on rising foreign-exchange reserves and strong growth, putting the nation’s long-term, foreign currency-denominated debt two notches away from investment-grade.




Nam Long Corporation offers five million shares for foreign investors

The starting price for Nam Long’s shares will be VND26,500. The group expects to acquire VND1 trillion(US$43.8 million) from the sale. Foreign investors can buy a maximum of five million shares, equaling 12.5 per cent of the offered shares. With the sale, Nam Long becomes the first private firm in Vietnam to conduct a share sale via an auction to increase its charter capital. Nam Long stated that it will use the money from the sale to invest in its commercial real estate projects and expand land funds in HCMC and Hanoi.


North-South expressway of Nha Trang – Cam Lam province invested 76 billion VND per km


The HCMC Highway Administration Board has just submitted to the Ministry of Transport for appraisal and approval of the feasibility study report on the North-South expressway construction project in the eastern part of Nha Trang – Cam Lam. According to the report, the project is 29km long, passing through two districts of Dien Khanh and Cam Lam, Khanh Hoa province, built on a 6-lane road, of which the diverging phase is four lanes, 17 m wide. Design speed of 120 km per hour. On the route, there will be two interchanges connecting Dien Khanh (Km5 + 783) and Suoi Dau intersection (connecting with National Road No. 1, Provincial Road No. 3). The project has a total investment of VND4,059 trillion, of which state budget support is VND3,219 trillion and BOT investment capital is VND774.5 billion. With the construction cost of about VND2,203 billion, the average investment rate of the project is VND 76 billion per km. 



Quang Tri plans to build airport through PPP

The People’s Committee of Quang Tri asked the Ministry of Transport (MoT) for permission to conduct a study and file a proposal for investment projects to build the airport through a cooperative agreement between the public and private sectors. They also wanted the MoT to allow the locality to update some tasks in the detailed planning dossier of Quang Tri Airport, particularly the forecast of transport demand and divergent investment period in line with planning on the transportation and traffic development of Viet Nam’s aviation sector. These serve as the basis for the call for investors to participate in the project and determine the route and suitable time for investment in accordance with plans to operate Quang Tri Airport after 2020. Quang Tri Province will allocate a part of its provincial budget, exploit its build and transfer form, and call for investors to participate in the establishment of the airport, Chinh said.



Thua Thien-Hue province to expand Phu Bai airport

The central province of Thua Thien-Hue plans to expand Phu Bai International Airport in a bid to welcome 3-3.5 million passengers in 2020 and up to 7 million per year in 2025. The province will expand the airport’s terminal, taxiway, runway and apron at a total investment of VND5.56 trillion (US$245 million). Initially, the airport will be extended to Phu Bai, Thuy Tan and Thuy Phu communes of Huong Thuy town. The area needing cleared for the project is 153.17 ha, including 24.22 ha in Phu Bai, 20.79 ha in Thuy Phu and 108.16 ha in Thuy Tan. A total of 296 households should be removed to other resettlement areas. Currently, the Phu Bai International Airport is able to welcome 1.5 million passengers per year and is often overloaded.



HCMC to build new opera house in Thu Thiem
Saigon Times

The HCMC People’s Council will next month consider a project to develop a 1,700-seat symphony-opera-ballet theater worth some VND1.5 trillion (US$65.6 million) in Thu Thiem New Urban Area, District 2. The project will be funded by the city’s budget. At present, most symphony concerts are held at the Opera House in District 1, which was built in 1898 and can accommodate only 500 people. Artists and experts have noted that HCMC is in dire need of cultural infrastructure, particularly a large, modern symphony-opera-ballet theater, to meet the needs of local arts lovers. The city should also swiftly develop multipurpose art performing centers and sports centers to serve the 31st Southeast Asian Games (SEA Games 31) in 2021. The city has mapped out a plan to build a multipurpose art performing center with four to 10 floors and three basements. The center may cover 40,300 square meters in Thu Thiem New Urban Area.



Dragon Capital invests US$83m in Vietnam’s housing developer Vinhomes 
Deal Street Asia

Dragon Capital, invested US$83 million in Vinhomes JSC, the housing development unit of Vingroup, in May through two its investment arms Vietnam Enterprise Investments Limited (VEIL) and Vietnam Equity Fund (VEF), according to its latest report. Robust investor appetite and soaring demand for quality housing in cities pushed Vinhomes to become the second most valuable listed firm in the Southeast Asian country as the property player made its stock market debut at a premium last month. In VEIL’s portfolio, investment in Vinhomes ranks sixth in value, accounting for 5.11% of the fund’s NAV, equivalent to US$80 million. Vietnam’s Asia Commercial Bank (ACB) is the fund’s largest investment in value, contributing to 7.75% of its NAV, equivalent to US$121 million.



WB: The poor are more affected by the housing tax than the rich 

Based on the recently announced Ministry of Finance's proposed property tax policy, the World Bank (WB) estimates that about 1.8 million Vietnamese households will be impacted by the tax and assessed. Housing tax only affects about 23,000 poor households. However, according to WB experts, although the impact on a small number of poor households, the proportion of house-to-house taxes to poor households (0.83%) is higher than that of households rich family (0.58%). Total revenue is expected to contribute about VND3,000 billion to the state budget. If Vietnam has implemented this taxation policy, Vietnam still has a lot of room for property taxes, which now account for only 0.04% of GDP, while in countries with economies in transition, this ratio is 0.5%. developing country is 2%. Therefore, the WB said that revenue from this policy in Vietnam will not be large, while the cost of tax administration is not small (accounting for 10-20% of revenue). To do so, the WB said that Vietnam should continue strengthening its tax policy in each period, considering the calculation of taxes in absolute value or in proportion to the value of assets.














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