Vietnam's property market comes of age
Investors are swapping gold bars and cash savings for property, to one developer's delight
Pham Nhat Vuong became a billionaire selling a Ukrainian instant-noodle business and creating Vietnam's biggest property developer.
The 44-year-old chairman of Vingroup Joint-Stock Company, which is building eight mixed-use projects in prime locations in Vietnam at a total cost of more than US$4 billion, plans to get even richer selling high- and mid-end apartments to Asians who want to reallocate their holdings from cash and gold.
"Vietnamese people still hold a lot of gold as their savings," Vuong said in an interview at the company's headquarters in Hanoi. "Vietnamese are very similar to the Chinese. They just can't sit on gold bars underneath their beds. Eventually they will pull out their gold bars and invest. It will be a boom for the real-estate market."
Vuong and his wife, Pham Thu Huong, own about 50 per cent of Vingroup, Vietnam's fifth-biggest company by market value. Excluding shares he has pledged as collateral to finance real estate projects, Vuong is worth US$1.3 billion, according to the Bloomberg Billionaires Index. He has never appeared on an international wealth ranking.
Vingroup is seeking to raise about US$300 million in a share sale in Singapore by August to fund its Vietnamese expansion. The company shelved plans for a Singapore listing last year when the city-state's benchmark Straits Times Index fell 17 per cent.
"If you give me US$10 billion now, I would spend it all on construction because there's so much more to build," Vuong said. "There is tremendous demand in Vietnam."