Exclusive: Hospitality assets to lead growth in Vietnam’s real estate sector: Don Lam, VinaCapital

Don Lam, founding partner at VinaCapital.

Hospitality assets and low-rise estate projects in Vietnam will lead the growth in the country’s property market, according to Don Lam, the founding partner of Ho Chi Minh City-based VinaCapital, a leading investment management and realty development firm.

With beachfront projects available at much lesser cost (as compared to other markets in Southeast Asia), Lam believes the hotel and resort segment will offer significant opportunities for real estate investors. “The beachfront land is still competitively priced here,” he added.

According to him, a large number of underdeveloped beachfront properties in Vietnam are available at about 10-15 per cent of the cost of similar developments in Bali or Phuket. Increase in tourist arrivals will only add to the opportunities, he added.

The state is facilitating tourism by providing visa exemption and extending international flights to holiday spots like Da Nang. Increased tourist inflow to central Vietnam is expected from Tokyo, Seoul, Taipei and some large cities in China, he said, adding, “with connecting flights and visa free travel, you will see increase in number of tourists coming to Vietnam.”

Low Rise Opportunities

While local developers are building high-rise apartments, Lam believes that there are not enough low-rise estate projects in the Vietnamese market.

Ho Chi Minh City alone has seen the development and sale of about 15,000 high-rise units in the current year, he informed adding that, in comparison, only a few thousand units of the ‘landed’ properties were sold.

Although there is lack of supply Lam asserts that most Vietnamese still like to live in a house.

Talking to DEALSTREETASIA about the Vietnam government’s new policy change to allow foreigners to own houses in the country, Lam says, the impact of that regulation is not immediate. But, in the long term, Vietnam will see more foreign investments. “As more and more foreigners feel comfortable and know about it, they will buy more,” Lam said.

“I think the next 12 months, will see minimum impact. But maybe in the medium term, two or three years, there will be more interest. Just like the markets in Thailand or Malaysia- when foreigners were allowed to invest, it took them a few years (to start buying property there,” he added.

VinaCapital holds about 20 per cent stake in Khang Dien Investment and Trading JSC, a  Ho Chi Minh City-based company, which has also seen investment from other fund management companies such as Dragon Capital, PYN Fund Management Ltd, Vietnam Holding and Saigon Asset Management.

The foreign ownership ratio at Khang Dien has reached the company’s limit of 49 per cent. “As the real estate market grows, Vietnamese companies will become stronger and we should invest in them,” Lam noted.

Lam, a veteran with 20 years of experience in the Vietnamese market, has been with VinaCapital since it was a manager of a single $10 million fund. The fund has now reached an asset base worth $1.5 billion.

VinaCapital has three closed-end funds trading on the AIM Market of the London Stock Exchange, including VinaCapital Vietnam Opportunity Fund Limited (VOF), VinaLand Limited (VNL), and Vietnam Infrastructure Limited (VNI). It also co-manages the DFJ VinaCapital L.P. technology venture capital fund with Draper Fisher Jurvetson, and holds stake in VinaWealth,

Related stories:

VinaCapital’s real estate fund sells 15% in Sai Gon Quy Nhon

VinaCapital boosts F&B investments, to buy Quang Ngai Sugar?

Hong Kong’s Chow Tai Fook takes controlling stake in Vietnam’s long-stalled $4b Nam Hoi An casino resort

VinaLand divests from Vietnam-based Vung Bau project

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.