• Sun
  • Oct 26, 2014
  • Updated: 1:05am
PropertyInternational
VIETNAM

Vietnam's property market comes of age

Investors are swapping gold bars and cash savings for property, to one developer's delight

PUBLISHED : Wednesday, 31 October, 2012, 12:00am
UPDATED : Wednesday, 31 October, 2012, 3:08am
 

Pham Nhat Vuong became a billionaire selling a Ukrainian instant-noodle business and creating Vietnam's biggest property developer.

The 44-year-old chairman of Vingroup Joint-Stock Company, which is building eight mixed-use projects in prime locations in Vietnam at a total cost of more than US$4 billion, plans to get even richer selling high- and mid-end apartments to Asians who want to reallocate their holdings from cash and gold.

"Vietnamese people still hold a lot of gold as their savings," Vuong said in an interview at the company's headquarters in Hanoi. "Vietnamese are very similar to the Chinese. They just can't sit on gold bars underneath their beds. Eventually they will pull out their gold bars and invest. It will be a boom for the real-estate market."

Vuong and his wife, Pham Thu Huong, own about 50 per cent of Vingroup, Vietnam's fifth-biggest company by market value. Excluding shares he has pledged as collateral to finance real estate projects, Vuong is worth US$1.3 billion, according to the Bloomberg Billionaires Index. He has never appeared on an international wealth ranking.

Vingroup is seeking to raise about US$300 million in a share sale in Singapore by August to fund its Vietnamese expansion. The company shelved plans for a Singapore listing last year when the city-state's benchmark Straits Times Index fell 17 per cent.

"If you give me US$10 billion now, I would spend it all on construction because there's so much more to build," Vuong said. "There is tremendous demand in Vietnam."

The billionaire said he also has plans to build properties in Singapore or Hong Kong.

Vuong studied geological economic engineering at Moscow Geology University in Russia before moving to the Ukraine, where he created LLC Technocom, a producer of more than 100 dehydrated food products, including instant noodles and mashed potatoes.

Vuong returned to Vietnam in 2001, when he started resort developer Vinpearl Joint-Stock Company. He set up Vincom Joint-Stock Company, which develops mid- to high-end commercial and residential properties, the next year. Vinpearl and Vincom, both of which were listed, merged into Vingroup this year. Vingroup has controlling interests in 19 mixed-use and resort projects it is building in Vietnam in locations including Hanoi, Ho Chi Minh City, Hung Yen and Da Nang.

Vingroup's projects in Hanoi, known for its French colonial architecture and tree-lined boulevards, are within 10 kilometres of the city centre.

The government wants to develop the capital into a modern metropolis. The mixed-use Royal City project, five kilometres from the city's central business district, will include Vietnam's first indoor water park and ice-skating rink.

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