HCMC office building market sees partial recovery

Grade A office rents in Ho Chi Minh City continued to slip in the third quarter but that of grades B and C increased for the first time since the end of 2009, real-estate consultancy CB Richard Ellis reported.

While average rent for grade A offices fell to US$36.70 per square meter per month from $37.51 in the second quarter, it rose from $19.3 to $20 for grade B offices.

The total area leased in the 3rd quarter was 62,000 sq. m, taking the total for the year to 194,000 sq. m, or higher than in the whole of 2009 when the number was around 154,500 sq. m.

HCMC’s economic recovery, which remains on track, is persuading companies to move to large office buildings.

Banks, schools, and service providers are among the main customers for grades B or C in the downtown area.

Although eight new grade C and one grade B buildings opened in the 3rd quarter with more than 63,000 sq. m of space, the rate is still climbing. On the other hand, no new grade A building came into the market but the rental is still falling.

Another reason for the declining demand and rent for grade A offices is the competition from some tenants who buy space in the buildings at preferential prices and lease it out at 15-35 percent lower than the building owners.

Though the economic recovery will mean higher demand for office space in the coming future, rates will decrease as a result of huge supply coming into the market.

In the final quarter of this year alone, 100,000 sq. m will be available, including at the Bitexco Financial Tower which will have 37,000 sq. m of grade A space.

In the next three years, 1.2 million sq. m of new office space for lease will be available.

Old buildings will face tough competition and, though many are planning to upgrade, will find it hard to maintain current rentals.

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Confab examines new housing policies

by Xuan Huong

A new apartment building in Phu My Hung Area in HCM City. New housing policies on residential real-estate transactions were introduced to housing companies at a conference yesterday. — VNA/VNS Photo Van Khanh

HCM CITY — More than 200 representatives from property companies learned about new housing policies during a meeting held yesterday in HCM City with the Viet Nam Real Estate Association and the Ministry of Construction.

The ministry explained that Decree 90, which took effect four years ago, was replaced with Decree 71.

The new decree contains detailed regulations covering different sectors in the local property market, and guides the implementation of the Law on Housing, according to Nguyen Trong Ninh, deputy director of the Housing and Real Estate Market Management Department.

In addition, Circular No 16 issued by the Ministry of Construction provides detailed guidelines for the implementation of Decree 71 regarding residential real estate transactions. The circular came into effect October 16.

Decree 71 contains regulations on the selection of developers, the appraisal and approval process of housing, commercial housing, individual housing, social housing projects and housing projects for public employees.

It also describes ways that project developers can raise capital for their projects.

Unlike the previous decree that contained vague language, the new decree allows developers to raise capital from banks, credit institutions, investment funds, corporate bonds, secondary investors and other organisations or individuals.

Under Decree 71, housing developers will be permitted to sell in advance a maximum of 20 per cent of the total number of apartments in a property project before finishing the foundation of the building.

The remaining sales must be traded via property exchange floors when the projects' foundations are completed.

The decree also outlines regulations and preferential policies for investors who develop social housing projects.

The aim is to encourage them to develop more housing projects and meet the housing demand of low-income earners.

In addition, Decree 71 has detailed guidance concerning housing transactions of Vietnamese residing abroad and of foreigners leasing houses in Viet Nam.

Regulations in previous decrees on housing policies that conflict with the new decree are no longer valid, according to Ninh.

Housing proposals submitted before August 8, the effective date of Decree 71, to provincial governments will be considered in several ways, he explained.

If the project has fewer than 2,500 apartments and is being built with State funds, the provincial People's Committee will make a decision based on Decree 90.

If it is being built with non-State funds, the local authority can issue an investment approval document to developers without asking them to submit a statement again.

If the project proposal has more than 2,500 apartments but does not mention investment sources, the provincial authority must send a statement to the Government for approval before it is turned over to the provincial government for final approval. — VNS

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Finance Ministry to control prices

Customers buy bread at Big C supermarket in Ha Noi. — VNA/VNS Photo Tran viet

HA NOI — The Ministry of Finance has said it will step in to control prices on the domestic market following predictions that they are expected to rise by the end of the year.

Nguyen Tien Thoa, director of the ministry's Pricing Management Department, said the recovery of the world economy and increasing demand for materials for production and business would push prices up on the world market by the end of this year.

He said the department should be able to keep the expected increases down to a modest level. However, the high demand for goods and services before Tet, plus any diseases in livestock would keep the pressure on prices.

Difficulty in raising capital for production and electricity costs would also add to the pressure.

Thoa said the State would check on the amount of goods in stock and register sales prices of 17 essential goods to avoid speculation.

By the end of December, prices of electricity, coal, paper, cement, tap water, transport would be stabilised.

Last week, Prime Minister Nguyen Tan Dung called on ministries, agencies and municipal and provincial authorities to implement strategies to stabilise the market and boost production.

Directive No1875/CT-TTg has been designed to ensure Viet Nam's growth rate reaches 6.5 per cent and the consumer price index (CPI) does not rise above 8 per cent. — VNS

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Province lures investors

Zinc-plated corrugated steel is rolled at the Hoa Sen Group factory in the southern province of Ba Ria – Vung Tau. — VNA/VNS Photo The Anh

HCM CITY — Southern coastal Ba Ria – Vung Tau Province has attracted an increasing number of investment projects over the last five years, according to the province's Department of Planning and Investment.

From 2006 through 2010, the province issued 196 new investment licences with total committed capital of US$24.26 billion.

The investment projects now number at 280, with total committed capital of $27 billion.

Most investment projects are in the tourism and industry sectors.

The number of projects has doubled, while committed capital has increased 10 times compared to the target set for the 2006-10 period, according to the department.

Implemented capital reached $3.39 billion, a rise of 1.5 times compared to the 2001 – 05 period, about $650 million higher than the target.

According to the department, foreign investment projects, mostly in the tourism sector, have accounted for 60 per cent of total investment capital and 50 per cent of export turnover.

During the 2006-10 period, foreign-invested projects made up 20 – 30 per cent of the total budget and created more than 20,000 jobs.

Local investors have focused on projects to develop seaports, residential areas and other infrastructure projects.

They include projects to develop Long Son Oil and Gas Industrial Park ($169.7 million), An Phu shipbuilding factory ($144.1 million), Chau Duc residential area ($63.43 million) and Nui Lon – Nui Nho tourist resort ($71.79 million).

Tan Thanh District in the province has attracted 127 projects with total investment capital of VND86,357 billion ($4.4 million).

Vung Tau City ranked second in the number of projects, with 76, and a total investment capital of VND24,099 billion ($1.2 million).

Viet Nam's membership in the World Trade Organisation (WTO) in 2007 has helped spur foreign investment growth, especially in Ba Ria – Vung Tau Province.

In 2007, the province attracted investment capital of only $1.4 billion, but capital rose to $11.6 billion in 2008.

Le Kim Huong, director of the province's Department of Planning and Investment, said the province wanted to create the most favourable conditions for both local and foreign businesses to invest.

The executive director of Ho Tram Beach Resort, Le Ngoc Quynh, noted that when his company invested in tourism in Phuoc Thuan Commune in Xuyen Moc District, local authorities supported them by improving infrastructure, such as power and telephone lines.

Because of the global recession, investors have also faced challenges in luring capital, particularly for large projects.

In addition, frequent changes in Government policies about land-use have postponed site clearance work because of lawsuits on compensation for displaced residents. This, in turn, has delayed progress on large projects.

Located in the major southern economic zone more than 100 kilometres from HCM City to the southeast, Ba Ria – Vung Tau Province is a major tourism site, favoured by nature with a long, beautiful coast.

The coastal province is also the country's only site for the offshore oil and gas industry. — VNS

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Bac Lieu farmers stuck with salt

BAC LIEU — With the next production season all set to start, farmers in Bac Lieu Province have 134,000 tonnes of black salt still in stock, according to the province's Department of Agriculture and Rural Development.

During the last season at the beginning of this year, Bac Lieu, which, at 3,500ha, has the largest salt-production area in the Cuu Long (Mekong) Delta, produced a record output of more than 266,000 tonnes, or two times the quantity produced a year earlier.

Of this, nearly 90 per cent was black salt.

In late June, the Ministry of Agriculture and Rural Development had ordered the Northern Food Corporation to buy salt from farmers in Bac Lieu who had around 200,000 tonnes in stock.

The corporation assigned the Bac Lieu Salt Trading Joint-Stock Company to buy 30,000 tonnes.

However, Bac Lieu and other companies could only buy a total of 7,000 tonnes of white salt due to finance, warehousing, and transportation problems.

To help farmers build warehouses to store their stocks, the provincial People's Committee has provided more than 400 of them interest-free loans worth a total of VND1.3 billion (US$68,000). — VNS

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Co-operatives ‘are still a vital force'

HA NOI — Vietnamese co-operatives had made much progress in improving living conditions, especially in rural areas, and creating jobs, Deputy Prime Minister Hoang Trung Hai said here yesterday.

Hai, who was speaking at the third Patriotism Emulation Congress of the Viet Nam Co-operatives Alliance, urged co-operatives to fully utilise their economic potential.

Co-operatives have been the core of the collective economic sector in Viet Nam for more than 50 years. They operate on the voluntary participation of individuals and organisations and are particularly strong in rural areas.

Together with economic sectors run by the State, collective economic sectors are the foundation of Viet Nam's multi-sector economy.

Co-operatives enable members easier access to capital and techniques.

At the congress, the co-operatives alliance summarised the outcome of emulation movements launched five years ago to raise the effectiveness of co-operatives in alleviating poverty and building a new rural model.

"The two movements helped speed up the development of the collective economic sector with new models of large-scale co-operatives that offered jobs and improved living conditions for millions of labourers," said Hai.

Vice chairman of the alliance Nguyen Van Bien said that at present, Viet Nam had more than 18,200 co-operatives, 53 unions of co-operatives and 360,000 co-operative groups, 20 per cent higher than in 2005.

The sector created jobs for more than 12.5 million labourers in different economic fields, especially agriculture, handicrafts and aquaculture.

Moreover, Bien said, co-operatives also mobilised money from members to shift the economic structure and expand production.

For example, more than 1,000 credit funds offered loans worth a total of VND21 trillions (US$1billion). More than 80 per cent of the loans were used to help co-operative members develop agriculture and handicrafts.

The collective economic sector contributed about 5.45 per cent of the national gross domestic product, joining hands to reduce poverty rates in the last five years from 30 to 14 per cent.

However, the collective economic sector in general and the co-operatives in particular still face shortcomings. They often lack the management ability to provide close co-ordination with other co-operatives or with other sectors. — VNS

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President praises An Giang for becoming economic ‘hub'

AN GIANG — President Nguyen Minh Triet yesterday congratulated An Giang Province for becoming a key economic hub in the Cuu Long (Mekong) Delta.

"You're now leading the nation and the region in rice growing and fresh fisheries breeding," Triet, a member of the Communist Party of Viet Nam's Politburo, told the ninth An Giang Party Congress yesterday.

Triet said that in the last five years, most targets set at the last Provincial Party Congress had been achieved or surpassed.

However, he noted that economic development was not yet sustainable and called for infrastructure development to be sped up to attract more investors and to raise the province's competitive index.

Regarding the next five-year development plan, President Triet urged the province to pay more attention to agriculture and rural development.

He said the application of science and technology in agricultural production could add value to produce.

A political report delivered by the An Giang Party Committee said in the last five years, on average the province recorded annual gross domestic production (GDP) growth of 10.34 per cent against the target of 12 per cent.

Of this, the service sector increased by 13.46 per cent, industry and construction increased by 13 per cent and agriculture by 3.77 per cent.

Per capita income in the period under review increased by 2.5 times the 2005 figure.

The political report said the most striking success in the last five years was the impressive increase in total social investment in the province – VND 87.4 trillion (More than US$5 billion).

Export turnover in the last five years stood at $3 billion against the target of $2.68 billion, three times higher than the 2001-05 plan.

Reviewing the movement to follow President Ho Chi Minh's moral example, the report said much progress had been recorded by many individual and collective role models, particularly among party members.

The An Giang Congress closes today. — vns

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