Mitsubishi building homes in Vietnam

[Viet]

The redevelopment site in Vietnam, rendered here, will include office spaces, research facilities and gardens.


TOKYO -- Mitsubishi Corp. is joining hands with a local real estate firm to develop up to 8,700 middle-income residences in Vietnam, as the Japanese trading house looks to capture a bigger slice of Asia's rising middle class.

The housing will be located in a redevelopment site along a highway 8km from Hanoi's city center. The plan is to build 17 high-rises containing about 7,700 condominium units, as well as low-rises housing 1,000 units. Construction costs are estimated at roughly 200 billion yen ($1.9 billion).



Vietnamese partner Bitexco Group is managing a mixed-used development project on the same 190-hectare plot. The project includes garden space, commercial properties, office buildings and research facilities.

Prices will be affordable enough for company workers earning mainstream salaries. Each condo will be between 70-80 sq. meters and cost around 15 million yen. The housing will mainly target company employees and government workers in their 30s and 40s.

Units in low-rise buildings will be about 300 sq. meters and cost between 60 million yen to 70 million yen. These "shop houses," as they are called in the local lingo, will fit 3-4 households that jointly purchase the homes.

Mitsubishi will sell 240 low-rise units and roughly 1,000 high-rise units during the initial phase, with project costs estimated at about 30 billion yen. The low-rise housing will become available in November while units in two condominium high-rises will hit the market next spring. The company will continue construction and sales in sequence while monitoring demand.

The number of residences sold in Hanoi doubled to 20,000 in 2015, according to a real estate market research firm. Demand is expected to remain high.

In Vietnam, a home purchase normally involves a 30% down payment, with the rest paid off in installments. Through this arrangement, Mitsubishi can recoup funds faster than with office or commercial buildings, which the owner has to maintain and operate while collecting lease payments.

Looking to shore up its nonresource business, Mitsubishi is also developing housing in places like Jakarta and Manila. The company is seeing brisk home sales in the Chinese cities of Shenyang and Dalian. These project mostly focus on the middle class.

Other Japanese firms are also joining the fray in Southeast Asia. Panasonic is looking to introduce low-cost housing with short construction times and partner with local dealers to sell them. Tokyu Fudosan Holdings is joining forces with Mitsubishi in a condo development project near Jakarta.



(Nikkei)