Prices for central London’s most expensive properties have risen at their fastest levels in almost three years, amid signs that confidence is starting to return to the capital’s high-end residential market.
Central London’s prime house prices rose 1.2 per cent over the second quarter of the year, marking the highest annualised growth since autumn 2015.
The latest data from LonRes suggests that wealthy buyers could finally be showing a reinvigorated appetite for multi-million pound houses, after several years of a slump that many in the industry believe has been driven by political uncertainty and stamp duty.
However, demand has picked up in the wake of lower prices, with LonRes suggesting that “price reductions have translated into sales”.
Such statistics come a week after property developer Christian Candy sold his former head office – which has been converted into an ultra-luxury five-bedroom home – in Knightsbridge for £63m.
“Confidence is coming back in central London. Wealthy buyers are getting fed up with waiting for the most opportune time, and people are now looking for long-term holds as they want to get on with their lives” according to Marcus Dixon, head of research at LonRes.
Dixon added: “Even with fears around Brexit there are a lot of overseas investors who still have very strong ties to London. A lot of the world’s wealthy educate their children in the UK, and them buying a property for themselves to use or for their child to use has not gone away”.
Property expert Henry Pryor told City A.M.: “At the top end – with houses priced between £20m and £50m, there is much less concern about future movements in the market. People at that level are much more concerned about their own mortality than what might happen to house prices in the next ten years.”
Vietnam’s National Assembly has approved a $300 million budget for four railway upgrade projects on its transnational route. The four projects are to be implemented along the Hanoi-Ho Chi Minh City route. The funds will be sourced from the contingency budget of the Public Investment Plan 2016-2020 that the parliament approved in 2016.
A total of VND1.95 trillion ($84 million) will be spent to reinforce over 100 weak bridges on the Hanoi-HCMC route. Propulsion systems on this route will also be improved. Another VND1.8 trillion ($77 million) will be spent on reinforcing 11 of over 22 tunnels on the route section between Vinh and Nha Trang provinces. New stations will also be opened along this route.
The route section from Hanoi to Vinh will be upgraded at a cost of VND1.4 trillion ($60 million), which will be spent on reinforcing the current foundation, opening a third track in stations that currently have only two, and other upgrades. Similar upgrades will be applied on the route from Nha Trang to HCMC with a budget of VND1.85 trillion ($79 million).
The Standing Committee of the National Assembly has also approved VND8 trillion ($343 million) for 10 road projects. The Vietnamese government has recently initiated efforts to upgrade the country’s outdated railway system. Many experts, including former senior railway officials, have said that the sector has suffered government neglect for a long time.
Source: VN Express
Manchester is one of the hottest property investment opportunities for developers in the UK.
Select Property Group, which has an office in Manchester, said property prices in Manchester and Edinburgh are increasing at a faster rate than anywhere else in the country. In comparison, growth in London is currently at its lowest since 2009, with affordability and tax concerns dampening demand among tenants and investors, alike. Researchers believe this is a trend that’s set to continue over the next three years, creating an immediate opportunity for investors to take advantage of the highest growth, which raises the question, is there a window of opportunity to invest in real estate in Manchester before 2021?
New research from Hometrack adds to the growing number of reports which underline Manchester’s status as one of the UK’s strongest investment cities.In the 12 months to June 2018, residential prices in Manchester rose by 7%. However, growth in central London has now reached a nine-year low, falling by 4% during the same period. The report highlights that average values are falling in more than 40% of London’s boroughs.
Both property prices and rents are becoming unaffordable for both buyers and tenants, alike. Mortgages are also becoming increasingly difficult to access, while new tax reforms are also deterring both domestic and international investors. At £491,200, the typical property in London is now three times more expensive than the average cost of one in Manchester (£163,300), but that gap is continuing to narrow. Hometrack pointed to a similar pattern between 2002 and 2005, when growth in London was weak but surged in key regional cities. Manchester, along with Birmingham, are forecast to close this gap the fastest, as a result of strong job growth and demand for real estate.
Is the same about to happen between 2018 and 2021?
“The level of house price inflation seen in large regional cities during the last peak, between 2000 and 2003, gives a good indication of how much prices may rise this time around,” said Richard Donnell, insight director at Hometrack.
“If history is to repeat itself and these cities are to get back to where they were, then prices could increase by as much as 20-25%.”
Recently the city people’s committee approved the installation of around 1,000 vending machines in public locations under its own supervision.
They are expected to provide a wide variety of beverages, snacks and fresh fruits besides customer assistance, especially to seniors, children and disabled people. The locations include parks, botanical gardens, hospitals, schools, and train and bus stations, which meet the space requirement of 2-3 square meters.
They will be located at 500-1,000 metres away from each other with a maximum of four installed in close proximity if the specific needs of an area so demands. Thong Nhat Park (Lenin Park) will have the largest number — 10. The machines will be capable of returning correct change to customers besides also accepting other payment methods such as cards and QR codes.
The people’s committee said the objective is to modernize retail sales in the city. There are now 161 public vending machines in the capital.
Source: VN Express
Almost 1,800 Japanese businesses have invested in Vietnam in the first half of the year, the highest among ASEAN countries.
This number accounts for 24.6 percent of total number of Japanese firms investing in ASEAN countries, said Keiichi Kadowaki, chairman of Japanese Chamber of Commerce and Industry in ASEAN (FJCCIA).
He was speaking at the 11th Dialogue between the Secretary General of ASEAN and the Federation of the Japanese Chamber of Commerce and Industry in ASEAN (FJCCIA) in Ho Chi Minh City on Monday.
Japan and Vietnam also signed 36 memorandums of understanding worth $21 billion last month.
“This shows that Vietnam is becoming more attractive to Japanese firms,” Kadowaki said.
Vietnam’s open business environment and robust economic growth of 5-6 percent each year has increased its attractiveness in recent years, he added.
Up to 70 percent of Japanese firms in Vietnam plan to expand their business in the country, as most of them believe that revenue will continue to increase, according to a recent survey by the Japan External Trade Organization (JETRO).
Over 65 percent of surveyed firms said they have been profitable in Vietnam.
Japan was the fourth largest trading partner of Vietnam last year, with a total turnover of almost $34 billion, up 13.8 percent from 2016, according to Vietnam Customs.
Source: VN Express
With foreign investors and tourists flocking to the country, demand is high.
Serviced apartments in Hanoi and Ho Chi Minh City reported occupancy rates of 88 percent and 80 percent in the second quarter of this year, Do Thi Thu Hang, associate director of research at real estate consultancy Savills Vietnam, said.
Though international property companies have been investing in serviced apartments in Vietnam since 1993, the number of developments in Vietnam has been very low compared to other countries, she said.
In Hanoi, there are 900 units belonging to three major international chains, or a mere 1 percent of their global holdings, she said.
The number is not enough to meet the demand from an increasing number of expats and tourists coming to Vietnam every year, she said.
Foreign firms have been setting up shop in large industrial zones in various provinces while most of the serviced apartments are in Hanoi and Ho Chi Minh City, she said.
With employees of foreign-invested businesses and other foreign companies being the main customers, “there will be even more demand for this type of apartment in future,” she said.
Foreign direct investment in Vietnam has been increasing in recent years, reaching $35.9 billion last year, the highest since 2009, according to official data.
Vietnam has been attracting an increasing number of international tourists, with 7.9 million of them arriving in the first six months, a 27 percent increase year-on-year, according to the Vietnam National Administration of Tourism.
The Ministry of Industry and Trade (MoIT) has recommended the government to transfer investment rights for the Long Phu III thermal power plant from PetroVietnam to China Southern Power Grid Company Limited.
China Southern Power Grid Company Limited provides electricity for five southern Chinese provinces. Through co-operation with Electricity of Vietnam Group (EVN), the firm has to date supplied a total 33.4 billion kWh of electricity for Vietnam.
MoIT has also asked the government to assign Geleximco-HUI, a joint venture between Geleximco and Hong Kong United Co., Ltd., to develop the Quynh Lap 1 hydropower plant, replacing the existing investor, state-run Vietnam National Coal and Mineral Industries Holding Corporation Limited (Vinacomin).
Meanwhile, many Chinese firms have become EPC contractor for Vietnamese energy projects. For instance, Kaidi Vuhan-China Co.Ltd is the EPC contractor for Thang Long, Hai Duong, Cam Pha 3 and Mao Khe thermal power plants.
According to the Ministry of Industry and Trade, Vietnam has 19 foreign-invested thermal power projects carried out under the build, operate and transfer form. Among those, Vinh Tan 1, Vung Ang 2 and Vinh Tan 3 thermal power plants are invested in by Chinese firms.
Up to 95% of the total investment of Vinh Tan 1 thermal power plant is jointly invested by China Southern Power Grid Company Limited and China Power International Development Limited, while the remainder belongs to Vinacomin.
Hong Kong’s One Energy Investments Ltd. Co. accounts for 48.45% of Vung Ang 2 thermal power plant’s investment capital and the remainder comes from two Vietnamese partners. However, the Hong Kong firm is waiting for the Vietnamese government’s approval to take over the whole project.
One Energy Investments Ltd. Co. also holds 55% in the Vinh Tan 3 thermal power plant.
Source: Vietnam Net
Hanoi got the Prime Minister’s nod, chosen ahead of Ho Chi Minh City by virtue of its proposal costing much less, and its existing infrastructure and previous experience in hosting several huge sporting events.
The event will take place between October and December in 2021.
The decision on Hanoi came after the SEA Games Federation (SEAGF) informed it would hand over hosting rights for the 31st edition of the SEA Games to Vietnam, because Cambodia, the original host, said it was not ready yet.
Vietnam was originally scheduled to host the 32nd edition of the biennial event in 2023.
The Ministry of Sports, Culture and Tourism said Hanoi meets all the requirements of infrastructure and human sources to organize the large-scale event, and has previous experience, having hosted the games in 2003.
In 2016, Hanoi had submitted a VND1.7 trillion ($74.8 million) budget proposal for the event, while HCMC submitted a VND15.6 trillion budget for the event this January.
The SEA Games are held every two years. When Vietnam hosted the Games in 2003, the main events were held in Hanoi and some in HCMC. Last year, the country sent 476 athletes to the Games in Kuala Lumpur, which gathered around 6,000 athletes from 11 Southeast Asian states.
The upcoming edition of SEA Games will take place in Metro Manila, the Philippines in 2019.
Source: VN Express
While 57 per cent of commercial properties in the Square Mile are bought by Asians, the second-highest investors by continent are the Europeans, buying 14 per cent over the same period of the most recent six quarters, according to data compiled by Datscha UK, a provider of property research intelligence.
Lesley Males, head of research at Datscha UK, told City A.M.: “London is the financial capital of the world. I don’t think that will change with Brexit. The initial fear was there but demand has gone through the roof again.”
Males added: “Asians see the potential in London, with commercial property prices holding values.”
The latest statistics are fresh evidence of a surge in interest from the east for London’s high-end property market, both in terms of residential and commercial buildings.
Last month trophy buildings in the Square Mile were bought up for huge sums, with Ropemaker Place and the UBS headquarters both being purchased for £650m and £1bn respectively.
Talking to City A.M. several weeks ago about the growth in south east Asian investment, commercial property expert Nick Braybrook said: “The market for trophies has been increasing for a few years now, and we have reached a point where the market is dominated by private investors, principally from Hong Kong. People are not quite aware of the dominance of south east Asian buyers, who make up about 70 per cent of the market.”
For decades, Vietnamese have shopped, snacked and hung out at the country’s traditional markets: colorful, chaotic mazes of open air stalls where vendors hawk everything from fruits and vegetables, to sandwiches and sodas to the odd clucking chicken.
Seven-Eleven is pushing a different model. The Japanese-owned chain in August opened its first outlet in the country, an air-conditioned, Wi-Fi equipped oasis in downtown Ho Chi Minh City. Since then, it’s rolled out about two locations per month, with plans for 100 within the next three years. GS Retail Co., the giant South Korean mini-mart operator, opened its beachhead in January. Meanwhile, local chains have announced new plans to flood the country with thousands of their own stores.
The brewing battle among purveyors of climate-controlled convenience is a measure of how far Vietnam has come since it opened to more trade and investment a decade-and-a-half ago. Factory openings by multinationals like Samsung Electronics Co. have made Vietnam a manufacturing powerhouse and helped lift average annual incomes to $2,385 from about $400 back in 2000. In the first half of 2018 the economy grew 7.1 percent, its fastest pace in a decade.
“I see a domino effect,” said Willy Kruh, a convenience-store watcher who heads KPMG Canada’s global consumer consultancy. “As other retailers see the success of the foreign players that have come in, it’s only going to bring in more retail, more brands, more big players.”
Lured by one of the world’s youngest consumer markets — more than half of Vietnam’s 93 million people are under 35 — foreign investors are pouring money into the country. The Ho Chi Minh Stock Index rose to a record in April, although it’s since given up some gains.
“Growth has been phenomenal,” said Chua Hak Bin, a regional economist at Maybank Kim Eng Research in Singapore, who said he’d recently come back from a marketing trip in Europe, where clients peppered him with questions about Vietnam. “It’s definitely a rock star.”
The last few months have seen a string of record public equity offerings. In November, there was the $709 million raised by shopping mall operator Vincom Retail JSC. That record stood until April, when Techcombank brought in $922 million. A month after that, it was luxury property developer Vinhomes JSC raking in $1.4 billion.
“You now have a young, emerging middle class looking to consume–and as they do, it’ll invite more and more investment,” said Jeffrey Perlman, head of Southeast Asia at Warburg Pincus, the U.S.-based private equity firm which owns stakes in both Vincom Retail and Techcombank.
College student Vo Thi Hoai Ngan fits the target marketing profile. On a recent weekday afternoon in Ho Chi Minh City, she bypassed street vendors selling sugarcane and coconut drinks to buy bottled water at an air-conditioned mini-mart operated by Circle K Stores Inc.
“My classmates and I prefer to come here for a quick meal,” she said. “It offers free Wi-Fi, chairs and tables.”
Circle K, a chain owned by Canada’s Alimentation Couche-Tard Inc., led the way for foreign convenience stores 10 years ago, when it open its first outlet in Ho Chi Minh City, Vietnam’s commercial capital. Tokyo-based FamilyMart UNY Holdings Co. followed in 2009.
But growth didn’t really take off until 2014 when the economy shrugged off its own mini debt-crisis and got inflation under control. That year, McDonald’s Corp. and Domino’s Pizza Inc. opened their first restaurants in the country.
Now a full-scale convenience-store flood is coming. The country’s biggest operator of gas stations, Vietnam National Petroleum Group, plans to add mini-marts at fillings stations across the country and property developer Vingroup JSC says it will add 4,000 mini-grocery stores by 2020.
Throughout Asia, where dense cities often make big box retailing impractical, convenience stores are expanding faster than every other type of business selling food and sundries, according to IGD, a grocery market researcher. In Indonesia, which is a few steps ahead of Vietnam on the development curve, Alfamart and Indomaret have been opening 1,000 mini-marts and convenience stores every year.
“Vietnam is at the start of that journey today,” said Nick Miles, IDG’s head of Asia-Pacific research. “It’s kind of at that point in per-capita income where modern trade starts to accelerate.”
No economist has actually done a formal study of the convenience store as a marker of development. But researchers have shown that consumption evolves in a predictable way as societies get richer. With annual incomes below $2,000, people buy things like bicycles and basic necessities. Between $2,000 and $6,000, where the average Vietnamese person is now, it’s scooters, refrigerators and beer. (Cars, laptops and cosmetics come next.)
Tu Vu, head of 7-Eleven’s Vietnam unit, is betting that new shopping trends will include frequent visits to his convenience stores. So far, Seven System Vietnam JSC has 19 franchise outlets in the country, all in Ho Chi Minh City. Vu says he’ll need hundreds of stores to become profitable, an expansion that will take several years.
“We are experiencing a transition from mom-and-pop stores to modern trade,” Vu said. “This is what Japan went through 40 years ago. People are working more and there are no grandmothers home to cook.”