Best-selling projects combine three factors
Ms. Duong Thuy Dung, Director, National Business Line Leader, at CBRE Vietnam, tells VET about the prospects for Vietnam's real estate market and M&A activities in the sector.
What are your thoughts on the real estate market this year? What segments will grow dramatically?
This year we expect the number of suppliers will increase sharply in the mid-end and affordable segments.
2016 saw strong development in the high-end segment and the beginning of a rise in the mid-end segment, but we will see the latter more clearly in 2017, though this does not mean there will be no high-end projects.
We will see development in terms of quantity and especially quality.
In 2015 and 2016, development in terms of quantity and quality were not seen clearly, but when there are many suppliers in the market then owners and investors will have to focus more on quality to create competition and ensure market dominance.
The highlight of 2017 will be the strong return of the affordable and mid-end segments, and there will be growth in quality.
You have said that the real estate market this year will not depend on the segment but on location. Do the best-selling projects have the best locations?
Is this why M&A activities in real estate are becoming more active, as major groups seek to acquire large projects?
Best-selling projects are not dependent on the segment and not on low prices.
It will be a combination of three main factors: location, price, and quality.
If the project is in the affordable segment but located in an inconvenient spot and of low quality, then buyers will not be interested.
Conversely, if your location is good but prices are too high there will be no sales.
It must be the combination of these three factors.
Many M&As have taken place recently but the problem is that the number of people who want to buy outnumber the products available.
There are insufficient products that meet the three factors above and buyers are wise, especially foreign investors.
They will carefully consider whether products have enough of these three factors.
If not, there will not be many deals completed.
What level of foreign capital inflows will there be into the real estate sector in 2017?
There will be more investors interested in the market, but I think not much capital will be poured in.
Interest among investors has been clear since last year and the number of foreign investors seeking to enter the market has been quite high.
For example, CBRE takes care of at least three different investors every week.
They come to research the market to identify whether there are suitable products to buy, but it will take them a long time to find such products and invest their money, and that will not happen this year.
What are CBRE’s plans in announcing two new services: Sustainability Services and the Hotel Division? Is it pioneering the field of Green Technology in the local real estate market?
We find that the faster a market grows and the greater the competition, the more emphasis there must be on product quality.
Quality also needs to be accompanied by sustainability, and this trend has been found around the world for some time.
When buying a product, fastidious customers will see whether it is sustainable over time and whether it meets green and clean criteria.
If you don’t have sustainability, fastidious customers, especially corporate customers, will not invest.
This is why we want to actively offer this service to customers who have demand for developing products of durable quality.
On one hand, we expand our services and on the other hand we also take a leading position in order to meet those requirements.
In hotel and resort management services, the number of resorts has increased tremendously in the last three years.
What we care about is whether quantity comes with quality.
If developers don’t have a master plan then development can have an adverse effect on the market.
We offer this service to assist investors and customers gain a comprehensive solution for their resort products and our ultimate goal is the sustainable development of the condotel market.
Of course, there are also a few other enterprises that have done likewise, but they have specialized in green development and not the real estate sector.
We combine real estate and green development.
We are also a corporation that is authorized to issue green certification and we are the only organization to do this in real estate and green real estate.
VN Economic Times