Grand Manhattan in Ho Chi Minh City listed as one of “the hottest property developments”

The ground has barely broken on its development but one of Ho Chi Minh City’s newest property developments; the Grand Manhattan in HCMC is being lauded as one of Asia’s “hottest property developments” in both domestic and international media. 

The 39-storey development will be located in HCMC’s District 1 and will house apartments, a hotel, restaurants and some of the most expensive real estate in the country. It’s located in Ho Chi Minh City’s downtown District 1 ad will have both city and river views. 

The development is the latest brainchild of Bui Thanh Nhon, who’s built his Novaland Group into one of Vietnam’s largest property companies. According to the Bloomberg Billionaires Index, Nhon’s skill in developing Novaland Group has helped him to amass a personal fortune in excess of $800 million USD.

But astute real estate experts say that the dynamic growth of all forms of real estate in Vietnam, whether commercial, hotels or residential should be expected in a country that has opened itself up to both domestic and foreign investment and has averaged annual growth of 6% or more for the last 20-years. 

In 2018 Vietnam’s GDP growth as above 7% and made the country one of the fastest-growing economies in the world. 

Recently, as many companies looked at their China exposure in the era of China-U.S. trade wars have been relocating from Southern China and continued investment in the country from Japan, South Korean and the U.S. are spurring investors to target real estate.

The institutional investment through development funds and property groups comes at the same time that an increasingly affluent middle-class is eager to buy real estate and they are putting hard currency into the property market. When seen from the international real estate perspective and where many international cities seem to be “risky” investments, Vietnam seems to be an stable and potentially very attractive location.

Da Nang City, Vietnam’s third largest city, located on the central coast is a city that is creating a master plan that will turn it into a “smart city” that is attractive to companies, individuals and tourists. 

In order to spur investment and provide government transparency, the city recently published a list of 17 real estate developments in the city the will issue ownership certificates to foreigners who purchase property in the approved developments. The list also included 3 projects that foreigners could not purchase. 

According to CBRE Vietnam, the prices for luxury apartments in Ho Chi Minh City increased 17% in 2018 to an average of $5,518 USD per square meter. CBRE forecasts that the prices for luxury properties will increase an additional10% by early 2020, with prices averaging $6,000 USD per square meter. 

The Grand Manhattan project contains two and three-bedroom units that start from $6,000 per square meter, and while that’s almost double the price for a typical high-end apartment in Ho Chi Minh City, based upon location and the date that the property will be online, Novaland believes the prices are in line with the market. For international buyers from cities like Hong Kong, Singapore and Tokyo, the Grand Manhattans prices of $6,000 USD per square meter is less than the per square meter cost of similar developments in their cities. 

While international investment in developments remains exceptionally strong, Vietnam’s real estate market is being driven by domestic buyers, both middle-class and high net worth who are looking to maximize the returns on their money. Many view real estate in Vietnam as an asset that will return higher returns, with less risk, than stocks, bonds or bank certificates

Neil MacGregor, Managing Director at Savills Vietnam, the sales agent for The Grand Manhattan, said developers used to focus on the middle class but are now turning their attention to the more affluent. MacGregor said; “We have more and more very rich Vietnamese, particularly entrepreneurs, looking for places to put their money.”

With active plans to develop real estate projects in Da Nang City, Hanoi and Ho Chi Minh City, it appears that there will be a variety of developments for investors. In Ho Chi Minh City, the Thu Thiem area in District is slated for massive integrated development, with plans for business, corporate, entertainment, hotel, residential and retail zones. 

Vietnam is also seeing an increase in airport development and has lowered the capital and some legal requirements for the establishment of airlines. New airports and the legal changes will see new airlines being established, with a variety of Southeast and Northeast Asian destinations targeted for direct flights. 

Familiarity with Vietnam by foreigners is expected to create a “cycle” that will see new real estate developments being built across the country that are then invested into by both domestic and international investors. For the next five years, Vietnam looks to be in a good position that will encourage continued investment into the real estate sector, whether its high-end developments such as the Grand Manhattan, or other projects throughout the country and those in the real estate industry are very optimistic.