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House prices in Western Europe and US property markets may be in freefall but recent news that Aseana Properties has acquired a minority stake in Vietnamese property developer Nam Long Investment Corporation has been well received by investors.  The move increase the group’s exposure in the Far East markets after a fall in prices and development activity linked to the ongoing world wide credit crunch.

The minority stake in Nam Long will cost in the region of £9 million and further expand the depth of markets which London Stock Exchange listed Aseana Properties is involved in.  Historically Nam Long has held a strong position in the Vietnamese property market with particular emphasis on the city of Ho Chi Minh.  The fact the group has a 1,235 acre land bank will not have gone unnoticed by Aseana Properties and other investors who joined in the institutional fund raising.

As well as giving Aseana Properties a stake in a fast growing Asian property developer, it has also opened up the opportunity for the two parties to work together in the future, something emphasized by the immediate agreement to co-develop four existing projects in the city of Ho Chi Minh.  It was also revealed at the time of the fund raising that Nam Long already has an impressive array of projects in the pipeline and the added benefit of an additional partner would assist with both funding issues and actual construction of the off-plan developments.

“An increasing standard of living and urbanisation driven by a burgeoning young and
middle class population are factors which should provide sustainable growth in Vietnam’s real estate sector,” commented Chintan Mahida, Nubricks.com overseas property editor,  “with its established development track record Nam Long is well positioned to capitalize on the current development opportunities available in Vietnam at present.”

While it is hoped that co-operation between the two groups will extend to other areas of the world, Vietnam is one of the main growth engines within South East Asia attracting foreign nationals, and corporates from all areas of the world.  Vietnam has a very impressive economic growth record of late and the government has historically shown a willingness to accommodate foreign investment, appreciating what they can do for each other. Vietnam is going through a period of sustained growth that will require more quality homes, offices and retail centres to cater for increasingly discerning consumers and together Nam Long and Aseana Properties look set to enjoy healthy future development returns.

Post from: Overseas Property Blog

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