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Something is brewing in Vietnam, and it’s not just the fragrant, strong coffee the country is so famous for. In 2009, the world’s largest rice exporter was the third-fastest growing Asian economy, so it is no wonder Malaysian developers are beating a path to its door.
Perdana ParkCity Sdn Bhd, the developer of the Desa ParkCity township in Kuala Lumpur, is developing a Vietnamese version of the very successful township in Hanoi. ParkCity Hanoi, with a gross development value (GDV) of US$2 billion (RM6.18 billion), is Perdana ParkCity’s first venture outside Malaysia.
The gated and guarded ParkCity Hanoi was unveiled on Aug 5 to better than expected response, Perdana ParkCity group CEO Lee Liam Chye tells City & Country. All 111 terraced houses and 17 semi-detached homes that were made available were sold.
In fact, Perdana ParkCity sales and marketing director Susan Tan says some successful buyers were getting offers to buy the units right after they stepped out of the sales office: “I was told some were offered between US$30,000 and US$65,000 more for their newly-bought properties.”
Tan points out that its first phase,Ngoc Lan Residences (Ngoc Lan is the name of a popular flower in Hanoi) , were slightly higher than other newly launched projects there, at about US$2,300 per sq m (RM660 psf).
Terraced homes (more familiarly known in Vietnam as townhouses) with built-ups ranging from 2,849 sq ft to 2,996 sq ft, were sold from US$419,000 to US$468,183 excluding value added tax (VAT). The semidees (called villas there) were sold from US$766,364 to US$803,636 (excluding VAT) with built-ups ranging between 3,849 sq ft and 4,131 sq ft.
Desa ParkCity is currently one of the Klang Valley’s hottest properties based on its capital appreciation. The 473-acre township, now about 50% completed, boasts New Urbanist principles, which include promoting the walkability concept.
Interestingly, the 193-acre ParkCity Hanoi is situated 13km from the city centre, the same distance as Desa ParkCity is from Kuala Lumpur’s city centre.
Lee is not totally surprised with the market response: “We had some Vietnamese customers visit us here in Desa ParkCity KL and they were very impressed with the township. It is a proven success and so we are confident our sister project will be well received there.”
ParkCity Hanoi is being developed by Vietnam International Township Development JSC, a joint venture between Perdana ParkCity (S) Pte Ltd (59%) and Vinnaconex-Hoang Thanh JSC (49%) , while a Vietnamese businessman holds the remaining 1%.
Perdana ParkCity’s investment is held by its associate company Perdana ParkCity (S) Pte Ltd, but Perdana ParkCity manages it. Vinaconex-Hoang Thanh is a large Vietnamese conglomerate with diversified portfolios, including infrastructure works and property development, in Vietnam. Perdana ParkCity is a member of the Sarawak-based Samling Strategic Group.
In total, Ngoc Lan Residences will comprise 153 units of terraced houses, 24 semi-detached houses and two blocks of 33-storey condominiums with 464 units spanning almost 16 acres. The gross development value of the first phase is US$84.5 million, excluding the condominium blocks and VAT.
Vietnam International Township Development general director Habibullah Khong Sow Kee says the remaining phase one units will be up for sale in 2Q2011. “We intend to release these units after completion of foundation works, as required by Vietnam’s housing law. Only 128 units (or 20% of the total units under Ngoc Lan) can be sold before the completion of foundation works,” he tells City & Country via e-mail.
First-of-its-kind township in Hanoi
Just like Desa ParkCity, ParkCity Hanoi will comprise 13 distinctive neighbourhood precincts with amenities such as schools, clubhouses and town centres.
“Investors in Hanoi are looking for a branded developer and lifestyle concept, and the unique Park City Master Plan Township Development appeals to them,” Vietnam International Township Development’s Khong says.
“Similar to Desa ParkCity, we offer green, open spaces with good security. On July 31, prior to the launch, we registered 2,200 potential buyers for our balloting exercise. The balloting system is not really common there as buyers usually buy through their contacts.
“We felt that balloting would be more transparent and give an opportunity to genuine buyers to buy a unit directly from the developer, without middlemen,” Tan explains.
Why Hanoi? Lee says the decision was made to develop in Hanoi because he felt it was an attractive investment. “Some of the big players are already there and new urbanisation is opening up there. The property market in Hanoi is experiencing rapid urbanisation with its young population and housing is an important government agenda,” he says. Hanoi has a population of 6.5 million, while Vietnam is home to 86 million people.
Lee went to both Hanoi and Ho Chi Minh City two years ago to view some sites as well as to attend meetings with landowners and among parties invited were shareholders of Hoang Thanh and Vinaconex. They, in turn, came to Kuala Lumpur to visit Desa ParkCity township and “were blown away with our concept and booming township.”
“Vietnam still lacks housing, offices and retail spaces although the country is developing rapidly. It has a very young population; about 60% are 30 years old and below. ParkCity Hanoi has set a benchmark price for new developments there. It is proof that our concept and design sells.
“Some of the buyers had come to Desa ParkCity and were convinced by what we have done here. It gives us a lot of confidence in what we are capable of doing.
On the timing, Lee says: “Property cycles are rather erratic there. Even within a downturn, there could be a boom and property prices do not seem to dip too much. With the current shortage in properties there, we believe the time is right.”
Jerome Hong, managing director (agency and corporate services) of PA International Property Consultants (KL) Sdn Bhd tells City & Country that Vietnam’s impressive GDP rate of 5.3% during the global financial crisis and its encouraging growth, which continued into 2010, are expected to spur the property market.
The real estate sector ranked third in total foreign direct investment (FDI) commitment there, achieving close to US$2.39 billion of registered capital in the first eight months of this year, Hong adds.
Meanwhile, data from CB Richard Ellis (Vietnam) says foreign direct investments in 2Q2010 stood at US$70 million with 75 projects, compared with 1Q2010’s US$30 million from 60 projects.
Lee says there is a shortage of competent and skilled professionals there, as they are in “the process of upgrading their skills and knowledge”.
“As in many emerging economies, the implementation and execution takes time, mostly due to unclear guidelines. Building controls, however, were introduced many years ago,” he says.
The first phase of ParkCity Hanoi focuses on local needs. Its buyers were high-income businessmen, professionals and investors mainly 40 years old and above.
“There are not many big townships in Hanoi, as most are pockets or infield developments. We have had a very good start there, better than anticipated, and we do not see any problem with demand for both phases one and two,” he adds.
ParkCity Hanoi’s phase two will comprise 144 units of townhouses of 3,046 sq ft and 16 units of villas of between 3,336 and 3,767 sq ft, which are expected to be launched in March.
“The Vietnam government is currently refining the Housing and Real Estate laws, to promote more transparency in the property development and real estate sector, while encouraging more social housing projects to cater for the lower -and medium-income group,” he explains. ParkCity Hanoi, Lee says, is a unique township development that cannot be compared with any other existing project in Hanoi.
Desa ParkCity revisited
Property prices continue to escalate in the much sought-after 473-acre freehold Desa ParkCity township in Kuala Lumpur. Back in 2003, the 2-storey Adiva Parkhomes were sold for RM550,000. Secondary transactions earlier this year show that these homes were going for as much as RM1.1 million. The 3-storey types are going for RM1.6 million, from RM650,000 back then, and in July, a 3-storey terraced corner lot was sold for RM2 million.
Zenia Parkhomes, launched in 2005, saw 2-storey terraced houses sold between RM615,000 and RM650,000 and 3-storey houses sold between RM800,000 and RM900,000. In June this year, the 3-storey homes were reportedly sold at between RM1.8 million and RM1.9 million. Last month, a 3,500 sq ft terraced home changed hands for a whopping RM2.48 million.
The township, currently 50% completed, boasts New Urbanist principles as reflected in the master plan — a compact township comprising mixed housing and offering great connectivity between people and places. Walkways in the township, for example, are 9ft wide, compared with the 5ft required by the authorities.
Perdana ParkCity Sdn Bhd was also the first to introduce strata-terraced developments in the country.
Desa ParkCity properties continue to be very much in demand, based on the overwhelming response to recently launched properties there. On June 26, the developer launched the RM360 million Casaman, comprising 108 units of 3-storey terraced homes and 39 units of 2-storey terraced homes on elevated ground. Interestingly, all 147 units were sold within five hours through a balloting system.
The 2-storey homes, with a built-up of 3,100 sq ft were, tagged from RM1.75 million while 3-storey homes, with built-up options of 3,900, 4,300 and 5,400 sq ft ,were priced at RM2.14 million.
Prior to Casaman, the developer launched its condominium project. The Westside One, where 90% of non-bumiputera units were sold during its priority launch on June 5, at an average of RM600 psf. The 40-storey project, offered 338 units ranging from 969 to 2,066 sq ft in size.
The small neighbourhoods in the township are arranged around a waterfront. Lee is currently planning a 55-acre town centre, which he says will act as a large gathering place for residents. The town centre will have a gross built-up of four million sq ft.
Some 70% of the buyers in the township are owner-occupiers. The whole Desa ParkCity township is expected to be completed by 2020.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 826, Oct 4-10, 2010
