A new wave of foreign investment is expected to flow into Vietnam during 2010’s fourth quarter. “If it is yellow light for China, green light for South Korea, the signal for Vietnam at the moment is green,” Bromme H. Cole, managing partner of the US-based Hampton/Hoerter LLC told VIR at the Vietnam Investment Summit in Ho Chi Minh City.
Cole said Vietnam was Asia’s most vibrant and promising frontier market. “This year and next year, large funds will start seeking emerging market opportunities and Vietnam is a perfect example of that type of opportunities,” he said, adding that Vietnamese real estate should be included when structuring a global tactical asset allocation model and the country must be part of portfolios allocation for institutional investors.
Cole said the market of nearly 90 million people with rapidly emergent middle class is “going faster than I thought” and the demand is enormous.
“They [institutional investors] at this important time are really interested in residential development, primary secondy homes as well as resort development in Vietnam because these investment can be traded out and investment can be recovered very quickly. Meanwhile, an office building is a long-term investment and that market is not very liquid right now,” he said.
Cole agreed that the prices somewhere in Vietnam were expensive, maybe due to the fact that there are not many developers. “The issue can be resolved with allowing greater free market access to land. But that could not be done all at once, to prevent a shock that may harm the whole system. You will let the development go carefully and planned because if the infrastructure does not support that would be a disaster,” he said.
“Vietnam is beginning experiencing large town developments like South Korea. For example, the marvelous masterplan community like Hanoi’s Ecopark is a new type of development where community can assess wide range of services and there are different types of housing.”
“Institutional investors in the US are a little bit reluctant to spend a lot of money in Vietnam. So we can do it for them. We will make market research and find out opportunities then provide it to investors there, in New York, Chicago and San Francisco.”
At present, Cole’s Hampton Hoerter represents two Vietnamese developer clients with advanced plans and approvals for mixed use developments both in Ho Chi Minh City and Hanoi.
“Our potential investment projects would be between $75-125 million during the first stage, on average,” Cole revealed.