Vietnam firm plans $400 mln fund for property
It could be a tough sell, as a London-listed property fund run by VinaCapital has seen its unit price plummet by two thirds since June to $0.50, a third of its official net asset value.
But company deputy managing director David Blackhall said some institutional investors were keen to invest in Vietnamese property, and wanted an unlisted fund that was not hostage to short-term market sentiment.
"This is a very testing time," Blackhall told Reuters in an interview in
But sentiment soured this year as inflation soared to 27.9 percent in September, partly because of a gaping trade deficit that threatens to turn into a balance of payments crisis if inward investment slows.
The government let the dong currency weaken to try to cut imports and improve competitiveness, tried to tighten lending, and raised interest rates, although they are still negative in real terms because of the high inflation.
Housing prices have fallen by up to 40 percent in
"In the last two years everyone in
"But now they have land and projects that they need to look at divesting. The wind has gone out of their sails."
The new fund, run by the companys property arm VinaLand, would invest in mixed-use developments in
"Things are available now that you just couldnt get 12 months ago -- parcels of land in inner city Hanoi and Ho Chi Minh City," he added.
The property investment arm of British insurer Prudential is also looking to pick up distressed assets, telling Reuters in June that it was raising a second portion of a fund for
After rampant speculation doubled prices in a couple of years to the end of 2007, a typical top-end 120 sq m apartment in Ho Chi Minh city has fallen in price by about a third in the last year to about $300,000.
Prices would probably fall another 10 percent, stabilise for some time, and then steadily appreciate, Blackhall said.
"The macro economy is looking a lot better than three months ago," he said. "I think the (property) market has got a bit more to come down, and then itll normalise."
Thanks to falling rice and oil prices,