Fund management firm VinaCapital is setting up a new fund to invest in the real estate sector. It already has a real estate fund called VinaLand but the new fund will be different – it will mainly target institutional investors, not list on stock markets, and not invest in listed securities.
"Viet Nam's economy will grow in a stable manner this year and we hope for new co-operation ties in different areas," Don Lam, VinaCapital's General Director, says, adding Viet Nam is still attracting foreign investors' interest.
Other fund management companies are also preparing to set up new funds.
IDG Ventures Viet Nam expects to manage a new fund of up to US$200 million this year to tap the opportunities in the education and medical services sectors apart from its traditional areas of interest – information technology and telecom.
Sai Gon Asset Management hopes to raise $100 million from institutions and industry leaders in the US or Luxembourg for its "Smart Money". The fund will give priority to liquidity, have clear exit strategies, and will likely stay broadly within listed securities, private pre-IPO companies, and real estate projects, according to SAM chairman Louis Nguyen.
Alan Pham, Chief economist for VinaSecurities Company, says the equity market is waiting for clear signals from the Government on liquidity and this is and will remain a decisive factor in investors' behaviour.
"One encouraging step was the removal of loan rate ceilings on medium – and long-term loans.
"Another reassuring sign was the State Bank of Viet Nam's decision to keep its base rate at 8 per cent through March.
"However, liquidity remains difficult as many businesses have reported an inability to borrow funds or having to pay a high rate if credit is available."
Meanwhile, the ban on gold trading floors could channel capital flows into real estate, stocks or dollars, he says. But since the property market has been quiet for some time and the supply of dollars has increased, most of the money is likely to flow into the equity markets, he reckons.
Unlike some others, the Vietnamese market, with a PE ratio of just 12, is not thought to be overvalued and there are indications that foreign funds have recently shown renewed interest in the country as one of Asia's more promising markets, he says.
City office space
Competition is likely to heat up soon in the leased office space segment in HCM City's property market after Vincom Joint Stock Company recently announced the opening of its Vincom Centre, a mixed-use promotion with a shopping mall, hotel, office space and apartments, on April 30.
Businesses will be able to contract up to 80,000sq.m. of Grade A office space in the 26-floor building which also has six basements.
One of its prime advantages is its location right in the heart of the downtown area on Ly Tu Trong, Dong Khoi and Le Thanh Ton streets. Others include a "green design" to save energy and preserve the environment.
Supply in the segment is expected to go up by more than 350,000sq.m this year – or more than 2008 and 2009 combined – according to real estate services provider CBRE. There are also spaces of over 100,000sq.m. not occupied since last year.
The office building segment is said to be the hardest hit in the property market by the economic crisis, with existing tenants leaving for cheaper places or reducing their office to cut costs and few new tenants appearing on the scene.
Nigel Smith, CBRE's Executive Director of landlord project services in Asia, dismisses any talk of oversupply, saying the fluctuations in the market were a natural cycle of development with major cities in neighbouring countries and territories like Hong Kong having the same experience.
The outlook for HCM City's office sector is good thanks to the recent improvement in infrastructure and growth in business sectors, he says. But he wants landlords to improve their services and manage their properties professionally, and investors and developers to look at long-term investments.
He stresses the need for LEED (Leadership in energy and environment design) in office buildings since clients nowadays want "green" buildings to help protect the environment and ensure stability.
Business leaders
Seventy-two per cent of Vietnamese business owners felt more stressed last year than in 2008, according to a study by auditing and consulting firm Grant Thornton International, which polled 7,400 business owners in 36 economies.
The global figure was 56 per cent, with mainland China with 76 percent and Mexico with 74 per cent placing above Viet Nam.
It was followed by Turkey (72 per cent) and Greece (68 per cent).
At the opposite end were Sweden (23 per cent), Denmark (25 per cent), Finland (33 per cent) and Australia (35 per cent).
"In Viet Nam, the top four reasons given for the high level of stress were the economic climate, workload, competitor activities and pressure on cash flow," says Ken Atkinson, managing partner of Grant Thornton Viet Nam.
"Viet Nam has seen significant GDP growth and workload and the tightening of monetary policy has undoubtedly contributed to the stress level," Matthew Lourey, corporate finance director at Grant Thornton, says.
The business leaders were asked about the major causes of workplace stress and the most common cause in 2009 was the economic climate which was cited by 38 per cent of respondents globally. This was followed by pressure on cash flow (26 per cent), competitor activities (21 per cent) and heavy workload (19 per cent).
The survey also found a correlation between stress levels and the number of days off work an individual was during the year. Countries at the top of the stress league are those where business owners, on average, take fewer holidays each year.
Viet Nam, rated third in the stress league, was at the bottom of the holiday league, with business owners on average taking just seven days of holidays during the year.
There were similar results for mainland China and Mexico. At the opposite end of the scale were business owners in northern Europe (Netherlands, Sweden, Denmark and Finland) who took between 22 and 24 days.