It is also the Covid pandemic that has squeezed the demand for investment real estate and is gradually being restarted.
Which group of real estate stocks is ‘breaking the top’?
In terms of long-term investment, Vietnam’s real estate is always a potential market. According to experts, real estate is still a safe “haven” during periods of economic crisis. That is also part of the reason why stocks of real estate businesses are having a strong breakthrough. A series of stocks maintained sustained gains, surpassing all-time highs, forming the biggest and longest tsunami in 2021. Many stocks increased 200%-300% in just a few months. Making a great contribution to the booming stock market, and closing the last session of October 2021 quite impressively when the VN-Index reached 1,444.27 points, setting a new record level after more than 21 years of establishment.
In the blue-chip group, shares of Vinhomes Joint Stock Company (VHM) are the brightest names when having the 6th consecutive increase in price after a period of “silence”. VHM’s market price has increased by 9.6% in just one week, which is considered a big increase in blue-chips.
In the midcap group HDC, NLG, IDJ, NTL, DTA… are bright names, attracting strong cash flow. Many real estate stocks also recorded their highest ever market prices. In which, the Third Joint Stock Company (DTA – Hose) in the third quarter increased by over 200% from the price range of 9,000 to nearly 27,000 VND/share. Or it can be mentioned that Dat Phuong Joint Stock Company (DPG) doubled its potential near the 3-digit price range – the highest market price ever.
This makes the market price level of all stocks raised at 40,000-100,000 VND. Currently, there are nearly a dozen stocks with a market value of over 100,000 VND, besides the “old” faces, there are new “big guys” joining such as Sunshine Homes (SSH), Hodeco (HDC), and most notably, Licogi 14 (L14)
In addition to commercial and construction real estate stocks, the group of industrial park real estate stocks also attracted quite strong cash flow. In this group, there are some prominent representatives such as SZC, PHR, VGC, LHG.
Closely related to the wave of real estate
According to a report by Batdongsan.com.vn, interest in peri-urban provinces such as Binh Duong, Long An, Ba Ria – Vung Tau all increased by 10% in September. The trend of real estate selection in areas The suburbs, where there are well-connected infrastructures, high urbanization rates, liquidity and capital are the big plus points that investors are aiming for.
Share the reason why real estate stocks “break the top”, according to Hello Group Co., Ltd.’s analysis, real estate companies, especially industrial real estate groups, can grow well. and maintain their form for a long time is thanks to 3 main reasons as follows:
The first is the need to move large factories, $23.74 billion of foreign investment flows into the market
Talking about the process industrial zone and starting with the US-China trade war caused a big wave of trade displacement. The world’s major factories began to move to Asia and Vietnam also benefited from this wave. The process of shifting supply chains from China to Southeast Asia will accelerate after the Regional Comprehensive Economic Partnership (RCEP), a free trade agreement involving 10 ASEAN countries and Australia, China, and Japan. Japan, New Zealand and South Korea, could come into force in 2022.
Most recently, from March, the American company Apple began to shift production from China to Vietnam and increase the production of headphones in Vietnam. Or Google and Microsoft are also moving some production lines from China to Vietnam… Especially recently, the world’s media reported that the US has identified Vietnam as a priority partner in the supply chain.
In addition, in September, Vietnamese businesses signed commercial agreements and contracts worth billions of dollars with leading US corporations. For example, Quantum Group (USA) and a consortium of Kinh Bac Urban Development Corporation and Saigon Telecommunications Technology Joint Stock Company (Saigontel) have also joined hands to invest up to 30 billion USD on the same day. 9/22. Recently, T&T Group and UPC Renewables Corporation (USA) also signed a cooperation agreement worth 3 billion USD in the field of renewable energy in Vietnam.
As of October 20, 2021, the total registered foreign investment capital in Vietnam (FDI) reached $23.74 billion, up 1.1% over the same period. This shows that Vietnam continues to be a safe and attractive destination.
The second is the growth engine that comes from the upgrade of infrastructure thanks to the promotion of public investment and untangling legal procedures.
Promoting public investment is considered a key focus of the government in developing the country’s mainstream GDP in 2021. Upgrading infrastructure, convenient connections, airports and seaports creating conditions for the development of production activities, housing demand, making real estate activities more active and vibrant in terms of both selling price and demand.
Previously, legal procedures were cumbersome, overlapping and causing trouble
On September 30, at the 8th Panorama Talkshow with the theme “Real estate potential adjacent to Binh Duong Industrial Park” took place with the participation of two speakers including: Assoc. Dr. Nguyen Minh Hoa – Vice Chairman of Ho Chi Minh City Planning & Development Association, Mr. Phan Cong Chanh – General Director of Phu Vinh Group.
The program content brings close-up and fresh perspectives on the development potential of the real estate segment adjacent to industrial zones in Binh Duong in general and Bau Bang district in particular.
Binh Duong North advances – Bau Bang benefits
Binh Duong is known as the “industrial capital” with 28 industrial parks in operation. After the successes of the industrial zones in the south, Binh Duong is planning to develop the industrial zones in the north, in order to create a driving force for economic development in previously purely agricultural areas.
According to Assoc. Dr. Nguyen Minh Hoa – Vice Chairman of Ho Chi Minh City Planning & Development Association, there are four reasons for the development of Binh Duong province towards the North.
Firstly, balance the development between the South and the North. The southern region of Binh Duong is not only the administrative and political center of the province, but also borders Ho Chi Minh City – the most dynamic development center in the country. Besides, this area also borders Dong Nai which is also one of the very developed areas. The entire southern region is now almost densely deployed. Binh Duong has 48 industrial zones, most of which are concentrated in this direction, leading to an imbalance between the North and the South.
The South is very favorable, but has reached the threshold of development. According to the oil slick rule, after the center of Binh Duong province is full of projects and services, development plans will be promoted in the adjacent areas. The brightest in this group are the northern regions.
“The urban threshold is composed of land, including groundwater and groundwater. The problem of technical infrastructure or services, the southern region is already overloaded, it cannot be stuffed here anymore and the so-called most important resource is land, there is no room for industrial parks. ten hectares”, said Mr. Nguyen Minh Hoa. “The whole province of Binh Duong is 2,700 square kilometers, the northern region has three districts of Dau Tieng, Phu Giao and Bau Bang, which account for 1,600 square kilometers, or 42% of the province’s area. Binh Duong province, like it or not, will have to develop in that area to create a balance.”
Secondly, urban areas always develop towards the most favorable places in terms of topography, geomorphology, technical infrastructure and service infrastructure. The land here is very high, not flooded, the ground is hard. A project in the south of Ho Chi Minh City, such as Can Gio or District 7, then a similar project in these northern areas of Binh Duong may cost as little as 1/4 or less. Not to mention the North is still near Dau Tieng lake, providing a lot of water for domestic use and production.
Third, this area borders with Binh Phuoc and Tay Ninh. In which, Tay Ninh is an area with a very strong focus on development. There are two major infrastructure projects passing through: expanding the highway to Moc Bai city, this is positioned as an ASEAN road, passing through Cambodia – Thailand and Malaysia; Ho Chi Minh City and Loc Ninh Expressways.
Fourth, the internal force of this area. Prominent among them are the South – North road, My Phuoc – Tan Van, My Phuoc – Bau Bang roads which will be the crossroads, ensuring the continuous development of traffic in terms of the flow of goods and human resources. The government has approved for the development of a completely new industrial park in Binh Duong. In which the projects in Bau Bang, Phu Giao and Dau Tieng are all new industrial parks, modern industrial parks based on the achievements of the industrial revolution 4.0 and artificial intelligence.
And thanks to the shift to the North of Binh Duong, Bau Bang became a bright locality. The industrial zone system in the district has developed strongly in recent years, notably the industrial park – urban area Bau Bang with a scale of 3,200 ha, Tan Binh (352.5 ha), Cay Truong (700 ha), Lai Hung (600 ha). available, in the near future Bau Bang is preparing to add a 900 ha scientific and technological industrial park and a 20 ha ICD inland port.
Bau Bang – a new ‘gold mine’ for investors
Also a guest on the program, Mr. Phan Cong Chanh – General Director of Phu Vinh Group recounted that many years ago, he had contact with a group of investors who saw opportunities in the adjacent real estate segment. industrial area. And the place they chose is Bau Bang district, Binh Duong province. At that time, this land was still quite strange to most of the real estate world.
According to this expert narrated, these connoisseurs of investors have poured money in large areas of land, up to 5-10 hectares. Then they built a factory on the land and rented it out. Notably, this group takes advantage of financial leverage and uses rent to pay for that loan.
“What surprises me more than their total payback period is 8 years. In real estate investment with 8 year payback is the dream number of many people, equivalent to a compound interest rate of about 11%-12% a year,” said Mr. Chanh.
So why did these investors choose to “explore” that land many years ago? And what is the reason?
