Vietrees Newsletter 66 Week3 Month1 Year09

Weekly Newsletter

A66

Vietnam Real Estate

Week 3, January

The first weekly electronic newsletter issued to registered members, approximately 100,000 reads per month joining to develop the newsletter

VietRees, a member of

Market situation (p.2) Real estate foreign investment (p.2) Vietnam in the world (p.2) Real estate agents (p.3) Websites of real estate companies in Vietnam (p.4) Real estate projects and prices (p.5) Real estate supply for customer groups (p.7) Real estate Legislation (p.8) Construction material market last week (p.8) Stock market last week (p.8) Research - Consulting (p.9) Market forecast, statistics expert opinions (p.10) This weekly newsletter is shared with partners, clients, members (registered) and internal VietRees together with those who are concerning or interested in Vietnam real estate market changes. Although the information is selected, synthesized from all reliable sources, this newsletter is only for reference and VietRees is not responsible for the occurring damage. Please visit the website www.VietRees.com for further Vietnam Real Estate information. When individuals and organizations quote or publish the information from our newsletter, please cite the source VietRees. According to the statistics on registration for the newsletter, the subjects making reference to the newsletter includes real estate investors; companies or units of government performing management tasks, business marketing, consulting, broking, assessment, real estate finance, construction, banking, architecture, interior decoration; domestic and foreign press agencies; and full of professional investors or individuals who have demand for real estate throughout provinces and cities nationwide; typically Ho Chi Minh, Ha Noi, Da Nang, Can Tho, Hue, Nha Trang, BRVT, Binh Duong, Dong Nai, Ha Tay… We would like to say thanks to the sponsors and all of the readers. We expect to continue to receive your support as well as your comments to improve our newsletter. Readers can print or save this newsletter on your computers to review when needed or transfer it to others. However, think of environment when you want to print it out.

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MARKET SITUATION HCMC real estate association petitions for reconsidering the payment time Sai Gon Giai Phong – 13 Jan, 2009

The Ho Chi Minh City real estate association has officially requested the State Bank to reconsider the period for bank loan payment for the enterprises in the association. Accordingly, the Bank will not fine the enterprises for violating the time for payment; will adjust the old loan interest to be equal to the current level (for the enterprises taking out loans in the time of the high loan interest rate); consider to reduce the interest rates reasonably and give the enterprises the loans to make the business investment with the interest rate of below 10% per year. According to the forecast, 2009 will continue to be a difficult year for enterprises trading properties due to a series of reasons, in which the primary reasons are the economic crisis and the frozen market. Most of the real estate enterprises in the city are the small and medium enterprises. Therefore, if they receive support from the banks, they will be hard to operate. However, the small and medium enterprises should also have plans of combining their forces such as joint venture, switching to houses for the low-income people because the demand is still very high. And to activate this market, the city should have favorable credit policies for the low-income people who have the real housing demands.

2 development trends on the market: low-price and highprice houses TheSaiGonTimes – 14 Jan, 2009

According to some experts, the real estate market in 2009 will continue to develop in two types including the high-price houses worth millions of US dollars and the low-price houses of about a few hundred millions, which are two market segments having many relative demands of a part of the rich and those who have real housing demands, but low incomes. The parallel development of two types of houses that are quite different in that the prices have originated from the fact that the foreign investors in the real estate field have continued to pour their capital into the high-grade housing projects and lacked the supply of the low-price houses. In the field of the high-grade houses, according to some experts, the market will restructure. Instead of investing on the large scale, the investors will re-select and only invest in the projects that offer the products within the next one to three years. In addition, kicking the demands of the low-price houses in the current market situation will stimulate the demands for the low-price houses because it is also the real demand of the majority of the people.

REAL ESTATE FOREIGN INVETSMENT Hoang Anh Gia Lai licensed to invest in Laos Vneconomy – 14 Jan, 2009

Total FDI in the real estate fields in 2008 Source: General Statistics Office The number of projects and the investment in the fields concerning real estate until December, 2008 have continued to rise. In which, the construction of office building and apartments is the field that attracts most FDI and the service sector has attracted the highest number of projects.

Hoang Anh Gia Lai J.S.C. has been granted the investment certificate by the Ministry of Planning and Investment following the joint venture form to construct the high-grade apartments, hotels and plant the rubber forests in Laos. The total investment of the project is 20 million USD. The joint venture which is named V & H Corporation and based on Tha Dua Highway, WatNak village, Sisattaanak ditch, Vientiane, Laos will build 350 apartments and 150 hotel rooms in Vientiane, 1,500 hectares rubber forest in Attapu province, Champasak, Vientiane and Savannakhet.

Department of Foreign Investment (under the Ministry of Planning and Investment) has shown that the total foreign investment in the real estate field across the country in 2008 is 23.6 billion USD (accounting for 36.8% of the total FDI). The top target in 2009 is to ensure that FDI released will be equal to 2008 or below 2 billion USD.

VIETNAM IN THE WORLD Vietnam is one of the countries seeing the positive signs Sai Gon Giai Phong – Jan, 2009

Grant Thornton International Corporation has announced the global ranking board in terms of the prospects for the economic development and clearly indicated the reduction in the positive signals in the private enterprises through the observations of over 7,000 enterprises at 36 countries. Grant Thornton has come to the conclusion that the decreasing demand is the biggest threat to the private companies. According to Grant Thornton, while the big economies such as the United States, Japan, the European Union have fallen into the economic crises, Vietnam has still maintained the strong growth rate in 2008. The main reason for the decline is the impact of the inflation and the global financial crisis. This has made the positive signal of the enterprises drop from 87% (in 2008) to 32% in 2009. With this result, Vietnam has ranked 7th in terms of optimism level in 2009. The private companies have been more advantageous in the time of the economic recession because the management board of the companies can make the decisions quickly due to the simple system and flexible policies. Therefore, these companies will operate more effectively than the organizations with the bureaucratic management style.

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REAL ESTATE AGENTS The first real estate transaction center in the Central Tuoi Tre – 11 Jan, 2009

HUD to build 500,000m2 housing area in 2009 Ha Noi Moi – 12 Jan, 2009

CEN Group – Megastar: signing the contract of exclusively marketing VietRees – 12 Jan, 2009

Eximland opens its standard real estate transaction centre Nguoi Lao Dong – 14 Jan, 2009

PFV supports the loan interest of Vincom Park Place apartments Lao Dong – 15 Jan, 2009

Some projects of C.E.O in 2009 VietRees – 16 Jan, 2009

Sponsor:

On January 10, 2009, Hung Thinh Cuong Corporation JSC opened the first real estate transaction center called CHTR in the Central at 25 Tran Ke Xuong Street, Hai Chau District, Da Nang City and the electronic commerce portal www.CHTRealestate.vn. In addition to providing the information on the real estate market, the center will be the place where the customers trade and receive consultancy on the prices, real estate products, legal procedures, loans, negotiating. The Housing & Urban Development general company (HUD) has shown that the investment procedures for the 5 projects of new urban areas in Ha Noi (including Nam An Khanh, Vietnam Linh Dam, Mai Trai Son Tay and Thanh Lam - Dai Thinh 2) are being implemented. These projects meet enough requirements to continue being implemented after the Ministry of Construction and People's Committee. Hanoi has conducted the review at the time of the administrative border being expanded. In 2009, the corporation plans to build about 500.000m2 floor, in which the priority is offered to the programs of building apartments in Hanoi. Megastar Corporation and Century Real Estate JSC MegaStar (Cen Group) have signed a contract of exclusively marketing and distributing the project of MegaStar Tay Ho Tay apartment project, which will be started at the end of January 2009. MegaStar apartment block mainly serves the subjects who have the medium and fair income, including the apartment areas of from 65 - 100m2 and full of the public utilities. The apartment block is estimated to be completed by 2011. On January 13, 2009, Exim real estate company (Eximland) opened its standard real estate transaction center at 55A Nguyen Chi Thanh Street, Ward 9, District 5, Ho Chi Minh City in accordance with the regulations of the Ministry of Construction. The center provides the services relevant to real estate such as consulting, market research, advertising, brokerage, etc. Kien Tan apartment project in Binh Chanh is the first product that the transaction center has conducted on the occasion of the inauguration. In addition, Eximland has also established E-XIM Assessing company specializing in the the field of assessing real estate, movables, investment projects, etc. On January 14, 2009, PFV Company – the investor of the project Vincom Park Place and the real estate management and consulting company CB Richard Ellis announced the program of supporting the customers who registered for leasing the houses of the project. Accordingly, if the customers registering for renting the apartments of the project from February 2009 until August 2010 have the demands for bank loans to pay the rent of the apartments, they only pay the interest of 3% per year and the remainder will be paid to the banks by the investors. The trading center of the building is expected to be opened on August 8, 2009 and the apartments will be handed over to the customers at the beginning of September, 2009. According to C.E.O Investment JSC, the company has now designed 16 house templates for the new urban area CEO Quoc Oai in Sai Son commune with many different sizes. 330 villas are expected to be offered for sale in February, 2009. In addition, the project of the C.E.O 27 storey office tower project on Pham Hung Street, Hanoi has completed the structural works and in the finishing process. According to the plan, the building will be put into use in the second quarter, 2009 at the rent of 33 USD/m2. In addition, the company has also said that the urban area CEO Me Linh has completed the investment procedures and the construction is expected to be implemented in 2009 and completed in 2014.

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Websites of real estate companies in Vietnam Property developers Ho Chi Minh

Brokerage Ho Chi Minh

Company 585 - www.585.com.vn Company 584 - www.congty584.com.vn An Phu - www.anphugroup.vn BCCI - www.bcci.com.vn Daewon - www.daewon.vn Him Lam - www.himlam.com Hoang Anh Gia Lai - www.hagl.com.vn Linh Phong Conic - www.conic.com.vn Nam Long - www.namlongvn.com Phu Long - www.phu-long.com.vn Phu Quoc Land - www.phuquocland.net SacomReal - www.sacomreal.com Sadeco - www.sadeco.com.vn Resco - www.rescovn.com Thai Thinh Capital - www.richlandhill.com.vn Thu Duc House - www.thuduchouse.com Phu My Hưng - www.phumyhung.com.vn Van Phat Hưng - www.vanphathung.com.vn Vietnam Land SSG - www.saigonpearl.com.vn

An Gia - www.angia.com.vn ACBR - www.acbr.com.vn Dat Xanh - www.datxanh.com.vn Dia Loi - www.nhadatdialoi.com.vn Dat Cat - www.datcat.com.vn FICO - www.ficohome.com.vn Kim Son - www.kimson.com.vn Phuc Duc - www.phucduc.com Hung Phu - www.hungphunhadat.com Hung Thinh 2 - www.diaochungthinh.com.vn Hoang Quan - www.hoangquan.com.vn Intresco - www.intresco.com.vn Loc Dien - www.nhadatld.com Nova - www.novahomes.com.vn Phat Hung - www.phathung.com.vn SacomReal - www.sacomreal.com Tan Dien - www.tandien.com.vn

Ha Noi FPT Land - www.fpt-land.com C.E.O - www.ceoholdings.com.vn Gia Tue - www.giatue.com.vn HUD - www.hud.com.vn HDB Viet Nam - www.hdbgroup.com.vn Keangnam - www.eng.kne.co.kr Nam Cuong - www.namcuong.com.vn Song Hong Land - www.songhongland.com.vn Vinaconex - www.vinaconex.com.vn Vincom - www.vincom.com.vn Viet Hung - www.ecopark.com.vn

Ha Noi Cland - www.cland.com.vn Dong Do - www.dongdobds.com Phu Thai Group - www.phuthaigroup.com Petrowaco - www.petrowaco.vn Petrolimex – www.pland.com.vn

Other cities Dieu Hien - www.dieuhien.com.vn Thien Loc - www.thienlocnhadat.com.vn

Sponsor:

Construction Ho Chi Minh CIC8 - www.cic8.com Coteccons - www.coteccons.com.vn Cosaco - www.cosaco.com.vn Hoa Binh - www.hoabinhcorporation.com Hai Thanh - www.haithanh.com.vn Toan Thinh Phat - www.toanthinhphat.com.vn

Ha Noi Constrexim - www.constrexim.com.vn Cavico - www.cavicovn.com HANCIC - www.hancic.com.vn HUD - www.hud.com.vn Incomex - www.incomex.vn

Architect and Interior Decoration Ho Chi Minh A2 Visualization - www.a2viz.com.vn Cat Moc - www.catmoc.com.vn Nha Vui - www.nhavui.com Nha Viet - www.nhavietdecor.com Nha Dep - www.nhadep.com.vn Pho Xinh - www.phoxinh.com.vn

Research CBRE - www.cbrevietnam.com Savills Viet Nam - www.savills.com.vn VietRees - www.VietRees.com

Other cities Becamex IDC - www.becamex.com.vn Biconsi - www.biconsi.com.vn Tuan Chau - www.tuanchau-halong.com.vn GNSVINA - www.cozyvill.com Company 579 - www.cecico579.com.vn Duc Manh - www.ducmanhco.com

Evaluation AREV - www.arev.com.vn Hoang Quan - www.thamdinhgia.com Vietland - www.thamdinhgia.com.vn VVFC - www.valuation.vn

Consulting CBRE - www.cbrevietnam.com Dong Duong - www.indochina-consulting.com Eden Real - www.edenreal.com Hop Nhat - www.uniland.com.vn Indochina Land - www.indochinacapital.com Long Gia Khang - www.longgiakhang.com Savills Viet Nam - www.savills.com.vn Vina Capital - www.vinacapital.com

Ha Noi ACT - www.act.com.vn ADKientruc - www.adkientruc.com Ashui – www.ashui.com Kien Truc Ha Noi - www.kientruchn.com

Other Countries Architects 61, Sing - www.a61.com.sg DP Architects, Sing - www.dpa.com.sg SWA, USA - www.swavietnam.com Ong&Ong, Sing - www.ong-ong.com RSP Vietnam, Sing - www.resp.com.sg Surbana Vietnam, Sing - www.surbana.com

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REAL ESTATE PROJECT AND PRICES 100% Riverside Residence of the first stage sold out Ha Noi Moi – 10 Jan, 2009

Investor supports customers to buy houses of An Cuu city VietRees – 10 Jan, 2008

Techcombank support finance when buying Tan Tao apartment Ha Noi Moi – 11 Jan, 2009

Opening the biggest trade center in Tay Nguyen Dau Tu Chung Khoan – 15 Jan, 2009

In general, the prices of the highgrade apartments in HCM City continue to decline

Up until 11:00 am on January 10, 2009, 133 apartments among the total of 671 apartments belonging to Riverside Residence project invested by Phu My Hung Company have been registered by customers for purchase, with a deposit of 100 million VND. This is the number of apartments to be offered for sale in the first phase with a price of 35 million VND/m2. It is expected to start the project at the beginning of the second quarter 2009; finish the as-built proccess of the second phase 1 in the third quarter 2010 and begin to implement the second phase of the third quarter 2011. The project investor of An Cuu new urban area - Viet Long Hue JSC - has said the company would have a program of supporting the customers in the purchasing houses from the project on the occasion of completing the first phase with 90 houses and the first 90 houses will be handed over in January 2009. Accordingly, 5 - 30% discount will be offered to the individual or collective clients (depending on the type and area). It is expected to start the second phase in March, 2009 with the construction of 28 villas in the K zone, 36 town villas in the A zone and 54 terraced houses in the C zone. Vinh Tuong JSC has implemented the sale of 80 apartments at C plot, Tan Tao apartment project on Lo Te road, Tan Tao A Ward, Tan Binh District, Ho Chi Minh City. The average price is below 10 million dong/m2 (including 2% maintenance fee) and the payment form is flexible. In addition, Techcombank will support the customers up to 70% of the value of the property, with a loan period of up to 20 years and the interest rates following the time if they have requirements. Intimex Import – Export JSC (Intimex Hochiminh) has just been opened and put Intimex - Fuso trade center into operation in the city in Buon Ma Thuot city, Dak Lak province. The project has an investment of 70 billion and the scale of 5 stories. With a total business area of over 7500 m2, the biggest trade center in Tay Nguyen includes full of shopping services such as the electrical appliance center, the same-price supermarket Daiso-Japan, the supermarket for self-selecting high-grade products, entertainment areas and cinemas.

The price change level of high-grade apartments in HCMC VietRees has recorded that in 2008, April and May had the highest decreases with 15% and 10% respectively.

VietRees – January, 2008 According to the statistics of VietRees, the prices of the high-grade apartment in December continued to decrease by about 6% as compared to November 2008. This has been considered to be the highest decrease from June 2008 until now.

Announced prominent real estate developments during the last 2 weeks* Week 2 January 2008

Ho Chi Minh City

Week 3 January 2009

Hung Thinh Apartment (Dist.10) Vinamilk Tower (Dist.7) Tan Mai (Binh Tan)

Approved prominent real estate developments in HCM City* Housing, apartment, residential area

December

January

Truong Tho apartment building (Thu Duc) ReA building An Phu – Binh Khanh (Dist.12) Cecico 135 apartment building (Thu Duc)

Nguyen Cu Trinh Complex (Dist.1)

* Note: RA=Residential Area, AP=Apartment Building, HA=Housing Area, RuA=Reurban Area, TA=Tourism Area, IA=Investment Area, UA=Urban Area, ReA=Resettlement area

Websites of properties in Vietnam Ho Chi Minh Blooming Park - www.bloomingpark.com Saigon Paragon - www.saigonparagon.com Dragon City - www.dragonland.com.vn Preche - www.preche.com SaigonPearl - www.saigonpearl.com.vn V-Star - www.v-star.com.vn Time Square - www.timessquare.com.vn The Everrich - www.theeverrich.com Tan Da Court - www.tandacourt.com Lancaster - www.lancaster.com.vn The Vista - www.thevista.com.vn Sponsor:

Ha Noi Viglacera Tower - www.viglaceraland.vn My Dinh – Me Tri RA - www.sudicosd.com Bac An Khanh RA - www.vinaconex.com.vn Ha Noi Plaza Hotel - www.charmvit.co.kr Phap Van – Tu Hiep RA - www.hud.com.vn

Other cities Furama Resort - www.furamavietnam.com Sai Gon – Mui Ne Resort - www.saigonmuineresort.com Sunspa ResortVietnam - www.sunsparesortvietnam.com

Other cities Cozyvill - www.cozyvill.com Flamingo Dai Lai - www.flamingodailai.com Van Phu township - www.dothivanphu.com Dam Vac Golf - www.damvacgolf.com Sanctuary - http://sanctuary.com.vn Ho Tram Strip - www.hotramstrip.com Sai Gon Sunbay - www.ctc-corp.vn Eden Lagi Resort - www.edenreal.com Van Quan – Yen Phuc township - www.hud.com.vn Quoc Te Do Son - www.vietlandgroup.com

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Property Retail Price Updated on information from ACBR, Van Phat Hung, Hung Thinh, Phuc Duc, Tuoi Tre Newspaper and developers (VietRees gathered by direct surveys), listed prices can be original prices or transfer prices at current or at one week prior from the date this newsletter is issued.

Typical apartments in HCM city

Other apartments and land lots Dist.

Area (m2)

Price (million VND/m2)

+/-

Apartment building – HCMC

Cantavil, Dist.2

V- star, Dist.7

* 75m2 – 25.3 million VND/m2

* 119.2m2 - 15.1million VND/m2 * 68m2 – 26 million VND/m2

Sky Garden , Dist.7 * 71m2 – 28.1 million VND/m2

Blooming Park, Dist.2 Phu My, Dist.7

The Everich, Dist.11

* 115m2 – 1,750 USD/m2 * 85m2 – 18 million VND/m2 Area: 95 – 398m2 Price: 1,800 – 2,400 USD/m2 * 117m2 – 20.25 million VND/m2 * 150m2 – 1,600 USD/m2 Direct contact with the investor1

Avalon

1

104

74.25

+

Sailing Tower

1

104.6

65.8

+

An Khang

2

87.5

23.5

-

Thinh Vuong

2

130

17.4

+

Constrexim

4

78.4

18.8

Hung Vuong Plaza

5

129

30

-

Kien Thanh

6

75

13.2

+

Carina Plaza

8

99

14

-

Thanh Nhut

8

69

12.6 16.5

The Montana

TP

75

Sunview Building

TD

88.5

10

PN Techcons

PN

133

23.3

Phu My Thuan - VPH

NB

89

8.3

Development land lots – HCMC An Phu – An Khanh

2

160

21.3

The ky 21

2

200

15.5

-

Phu My - VPH

7

126

20.1

An Phu Hung

7

140

24

+

Khang An

9

132

6.4

-

Phu Nhuan

9

258

6.2

Hai Yen

BC

160

9

Phu Xuan - VPH

NB

120

6.9

Sai Gon Moi

NB

120

7

M5 - Nguyen Chi Thanh

BD

133

29

Ngoc Khanh

BD

123

33

Apartment building – Ha Noi

Preche, Dist.2 * 147m2 – 2,222 USD/m2

Panorama, Dist.7 * 121m2 – 35.5million VND/m2

Saigon Pearl, B.Thanh * 84.56m2 – 2,400 USD/m2 * 133m2 – 2,150 USD/m2

+

Dich Vong

CG

62

18.5

Nghia Do

CG

50

15

-

Thai Thinh

DD

68

26.5

Nang Huong

TX

117

14.3

Vuon Dao

TH

126

23

+

+

Development land lots – Other provinces

The Vista, Dist.2

New SaiGon, Nha Be

The Manor, B.Thanh

* 135m2 – 1,650 USD/m2

* 99m2 – 16.8 million VND/m2

* 35.5m2 – 1,727 USD/m2

* 121m2 – 17.5 million VND/m2

* 113m2 – 2,160 USD/m2

1

My Phuoc 3

BD

300

1.27

CocoLand

BD

150

1.3

Long Dien

BR-VT

100

2

Thanh Binh

BR-VT

200

9

Phuoc An – Long Tho

DNI

101.5

3.2

HUD

DNI

300

1.6

Lang chuyen gia Tan Do

LA

162

2.2

+

Kien A Investment & Services Co., Ltd. - An Phu Ward, District 2, HCMC - Tel: (84.8) 740 6688, Fax: (84.8) 740 6949

Danang: 225 Huyen Tran Cong Chua - T: (84) 511 836 216 * HCMC: 390 Nguyen Cong Tru, D.1 - T: 8 821 7509 * Hanoi: No.6-1D Trung Yen New Town, Caugiay - T: 4 783 1598

Sponsor:

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PROPERTY SUPPLY FOR DIFFERENT TARGETS OF CUSTOMERS Social welfare houses for worker VietRees

Real estate for the low income VietRees

Dwellings for overseas Vietnamese and foreigners VietRees

Sponsor:

* Saigon Construction Corporation investor two apartment blocks high 5-storey for workers in Quarter 1, Linh Trung Ward, Thu Duc Dist, HCMC. * Hung Vuong JSC has just put a 5-storey apartment building into use for cadres and workers. The company continues to petition Tien Giang Provincial People’s Committee to grant a 5.000m2 land area to construct more apartment buildings for workers with an investment of 100 billions VND. * Saigon Paper JSC has put an apartment building into use for workers at My Xuan Commune, Tan Thanh suburban district, Ba Ria - Vung Tau province. The stage 2 of the apartment building is about to be implemented with a scale of 8 storey. th * Morning of August 28 , 2008, the Ministry of Construction has signed a memorandum for the cooperation in the field of welfare housing with Korean Ministry of Land-Traffic and Marine. * Ha Noi Construction Investment JSC (Hancic) has finished 4/10 units of the 5-storey house which belongs to the housing project for workers at Kim Chung Commune (Dong Anh). * Construction and Import-Export JSC (Vinaconex) has transferred and put into use 4 blocks of houses among the total 16 blocks of the housing project for the workers at Thang Long industrial zone. * The housing area of 7,000 m2 (380 rooms) for 1,500 workers of Dong Quang Knit Limited Company at Hai Son industrial cluster (Duc Hoa Ha commune, Duc Hoa suburban dist., Long An province) has just been put into use. The total investment cost of this housing area is 20 billion VND. (02/10/2008) * The 4-storey apartment building at cluster 5, ward 8, Vinh Long town that serves the cadres, employees, professional serviceman and etc has been ratified by Vinh Long Provincial People's Committee with a total investment of over 37 billion VND. (03/10/2008) * Sai Gon – Gia Dinh Real Estate Company and Hoa Binh Phu Yen Company build Thoi An Apartment Building in District 12 with 1,000 apartments. * Construction Co. No.8 (CIC8) will invest in construction of 10,000 Keppel Land apartments & Tien Phuoc Co. will build a resettlement area including 1,900 apartments at An Phu, Binh Khanh, District 2. * HCM City People’s Committee will advance 50.5 billion to carry out the project of Vinh Loc B, Binh Chanh residential area for resettlement with hundreds of townhouses and 40 apartment blocks. * Construction Co. No.5 will invest in construction of 500 apartments at Ward 22, Binh Thanh District. * HCM City Cooperative Alliance has developed its construction investment project of housing area at Le Minh Xuan Commune, Binh Chanh Suburban District on a site of 67.49 hectares. * 50% of the house reserve at The Splendor apartment area (Go Vap Dist.) will be intended to serve resettlement demand in the district. * Dat Lanh Co. will offer 1,500 apartments to the market with the prices of 500 - 700 millions VND/unit. * People‘s Committee of HCMC has approved the project of the resettlement area on a site of 55.24 hectares at Dong Nam Cu Chi industrial - residential area in Cu Chi. * House management of Dist.1 is assigned to construct the resettlement area at 7/4ª Kha Van Can, Thu Duc district. * In early 2010, Hai Thanh company will complete 352 apartments of Hai Thanh 1 resettlement area project, Binh Tan District for the civil servants at Binh Tan District. * People’s Committee of Binh Chanh has just cooperated with Hung Vuong university Investment & Development JSC to construct resettlement area at Tan Kien commune, Binh Chanh suburban district. * People’s Committee of HCM City has just licensed Cho Lon Real Estate JSC to invest in the construction of the apartment building at No. 99 Ben Binh Dong, ward 11, district 8 in order to make the house reserve at the social welfare housing program. * People’s Committee of HCM City has promulgated the decision about reclaiming the land areas at Phuoc Kien, Nhon Duc and Phuoc Loc communes, Nha Be suburban district for the construction of the resettlement area in order to serve the project of Nhon Duc - Phuoc Kien new urban area. * The HCM City Union of Housing Co-operatives has prepared to commence the construction of Thanh Loc apartment building with 238 apartments on a site of 6.600 m2 in District 12. The Union intends to construct another apartment building with over 200 apartments at Truong Tho ward, Thu Duc district. * HCMC People’s Committee has ratified the planning of Binh Khanh residential area (Dist.2) which is built on a site of 384,019 m2 to serve the resettlement of the locals in Thu Thiem new urban area. * Dat Xanh has cooperated with Truong Son Vanguard Youth General Squad to build apartments for lowincome people at Dist.12 * Go Vap People’s Committee and Go Vap Public Benefit Service Co. have bought back the house reserve belonging to Phu Gia Hung high-end apartments, Duong Quang Ham Street, Ward 15, Go Vap Dist. and Dong Hung Thuan 1, 2 apartment buildings, Dist. 12 to serve the resettlement of the locals at Tham Luong project - Ben Cat - Nuoc Len ditch. * Approximately 184,000 apartments belonging to the investment program in the construction of the social welfare houses in the stage of 2009 – 2015 with the total investment of about 49,000 billion VND have been submitted to the government for approval. (30/09/2008) * 800 social welfare houses for lease - lease to purchase will be built at 19A and 21A plots, Viet Hung urban area in 2009, which have been ratified by The People’s Committee of Ha Noi City. (16/10/2008) * 462 units of Khang Gia 3 apartment building (Go Vap Dist.) invested by Khang Gia Real Estate Investment – Development JSC will be used for the resettlement demands. (27/10/2008) The Committee for overseas Vietnamese in HCMC has showed that there have been 130 overseas Vietnamese buying houses, mainly in HCMC. Those who brought houses are those who come back to the country for their long term and direct investment, scientists, culture researchers invited to come back to the country to become experts and repatriating overseas Vietnamese. To buy houses, beside documents verifying priority subjects, the buyer must present their passport (issued in Vietnam). In the case that house buyers bring foreign passports, they must have certificates of Vietnamese nationality or documents confirming their losing Vietnamese nationality, or certificate of citizenship registration.

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REAL ESTATE LEGISLATION Every general company should have one welfare house project Vnagency – 13 Jan, 2009

Can Tho: chairman of People’s Committee of district allowed to make decisions on the projects of below 5 billion VND Phap Luat – 14 Jan, 2009

Three types of projects have administrative procedures reduced in construction investment Kinh Te Do Thi – 14 Jan, 2009

The Ministry of Construction has suggested that each corporation should have at least one project constructing welfare housing at the localities, aiming at quickly and effectively implementing the welfare projects presided over by the Ministry in 2009. The Ministry of Construction submitted the program of constructing the welfare houses in the period of 2009 - 2015 to Prime Minister in December 2008. In this period, the program will invest in the construction of 184,000 apartments, equivalent to 10 million/m2/floor with a total investment of 49,000 billion VND. In which half of the capital comes from the State-owned budget and is used for investing in the welfare houses for rent. To decentralize the decisions on the construction investment for projects of works for socio-economic infrastructure, national defense and local security by using the state-owned budget which is managed by the localities, the People's Committee of Can Tho city has shown that the chairman of the People's Committee at the district and suburban district level are allowed to make decisions on the investment in projects with the value of below 5 billion. Based on the long-term investment plan, annually, the People's Committee at the suburban district level sets up the construction investment plan for the localities to ensure the investment structure and require that the socioeconomic development at the localities follow the ratified planning in the budget scale of the localities, etc. Regarding the works at the places that there is no planning should have the approval of the management organizations or authorized agencies on the planning. According to the Resolution 33/2008/NQ-CP, the government will pilot some reformations to the administrative procedures in the construction investment for three types of projects including new urban areas, housing areas and the industrial technology infrastructure. In the case that the investment policies are available but the detailed planning for the construction at the 1:2000 scale has not been ratified yet, the People's Committees at the provincial level are allowed to assign the investors to set up the planning and submit them for approval according to the regulations. The organizations assessing the planning will consider and respond in terms of the full and the validity of the documents within 5 working days. In case, the documents are not enough, the assessment agencies should provide the guidelines in written for the investors so that they can finish the documents. The complement of the documents should be conducted for only one time. The time for assessing & ratifying the detailed planning for the constructing at the 1/2,000 scale does not exceed 30 working days. For the detailed planning at the scale of 1/500; the local government should complete the assessment and ratification of the planning and grant the ratified decisions to the investors within 30 working days from the date of the investor submitting the full documents. For the regions that have had the detailed planning at the scale of 1/2,000 and raised the newly-ratified proposals different from the 1/2,000-scale planning when setting the detailed planning at the scale of 1/500 of the project, the authorized agencies should consider and assess those proposals. If they are suitable, the agencies should send the decision in written on approving the planning at the scale of 1/500. The time for the approval should not exceed 15 working days.

CONSTRUCTION MATERIAL MARKET Steel prices will not increase in 2009 Edited by VietRees

According to the forecast of Vietnam Steel Association (VSA), the growth of the steel industry this year can remain unchanged or inconsiderably increase (by from 2 - 5%) as compared to 2008 with the consumption of about 9 million tons. In which, the production of steel construction of all kinds will reach 4 - 4.5 million tons, the import output will reach 5 - 5.5 million tons and the export output will reach 0.5 million tons. The steel prices will not suddenly increase in 2009 because the demand exceeds the supply on the global scale. In this year, the steel industry will suffer another head-on difficulty that from this year, the prices of some key items such as electricity, water, coal have started to be adjusted following the market prices, which will impact on the input cost of the production and the prices of the products. To overcome the difficulties in the steel industry, VSA suggested that the banks should limit the granting of credit to the steel import companies that have had the large inventory or redundant production capacity; raise the steel import tax, reschedule the debts for the enterprises, etc. Additionally, VSA also encourages the steel producers to rearrange the production, restructure the products to reduce prices, release the inventory reasonably to have the capital & continue to import the raw materials.

STOCK MARKET Vn-Index backs to the upturn, HASTC-Index continues to decline Edited by VietRees Chart Source: Vietstock Up to date: 09 Jan, 2009

* At HCMC bourse, at opening time on January 16, optimistic signs have appeared, VN-Index has swum upstream when adding 1.71 points to close at 305.72 points. Entering the consecutive order-matching phase, VN-Index has continued to maintain the upturn due to the stable price increases of the blue-chip stock on the market. At the end of the session, although the transaction situation was not really exciting, VN-Index has added 2.11 points as compared to the previous session to record at 306.12 points. The total trading volume on the whole market has reached 6.8 million units worth over 165 billion VND. After one trading week, VN-Index has had 2 upward sessions and 3 downward sessions. As compared to the last week, VN-Index has lost a total of 7.28 points. * On the contrary to the situation on HCMC bourse, HASTC-Index has still continued to decrease when losing an extra 0.27 points today to close at 102.84 points. The total trading volume on the whole market has reached nearly 2.7 million units worth 58 billion. This week, HASTC-Index has seen the decreases in the 5 sessions, losing 3.33 points as compared to the last week (from 106.17 points down to 102.84 points).

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RESEARCH – CONSULTING Solutions to enhancing the competitive abilities of the Vietnamese real estate enterprises 1. Why should the Vietnamese real estate enterprises enhance their competitive abilities? Enhancing the competitive abilities of the Vietnamese real estate enterprises is an indispensable thing in the process of integration especially in the difficult situation of the current real estate market and the decline of the economy, helping the real estate enterprises stand firm on their feet & develop in the coming years. Thereby, it has contributed to enhancing the competitive power of the whole economy. On the other hand, in the current situation of the market, if the competitive abilities are not enhanced, the enterprises will be able to suffer the losses, close down and go bankrupt. According to VietRees, to assess the competitive ability of one real estate enterprise, firstly the real estate enterprises need to identify the internal factors and external factors impacting on their competitive abilities. According to VietRees, the essential internal factors that the enterprises need to use to assess the competitive ability of one real estate enterprise include: • The quality of service products • The diversity of provided services • Human resources • The ability to develop the market • Trademarks and the prestige of the real estate enterprises • Financial ability • Organizational and management ability of the real estate enterprises • The real estate information system • The level of using the information technology The external factors influencing the competitive abilities of the real estate enterprises can include the macroscopic policies of the government – the law factor, the domestic and foreign competitors, the capital market, the psychology of the subjects joining the market, etc. For these external factors, the real estate enterprises are very hard to intervene, change or adjust. Therefore, the enterprises only need to thoroughly study and understand the external factors and focus more on the internal factors.

4.1. Enhance the management ability and train the leaders of the enterprises. To develop the above abilities, the decisive factors are the activeness and positive striving of every businessman. According to VietRees, firstly, the leaders of the enterprises should pay attention to enhancing the essential skills and update the modern knowledge. Some knowledge and skills should be updated and systematized. If the basic skills are combined with the effective management knowledge, there will be the decisive impacts on the managers of the real estate enterprises. Thereby, this contributes to improving the competitive abilities of the real estate enterprises. 4.2. Improve the quality of service products and the diversity of the provided services When the source of real estate products is growing, the quality of service products is getting more attention of the customers. The quality of the real estate service products should deserve the money that customers have paid. The enterprises have to rearrange the structure of the products in many segments, direct the products at the current needs of the customers and take the quantity to offset the profits (for example: investing in the housing segment for the medium - income and low-income people).

4.3. Build up the market information department; regularly follow and fully update the movements of the market through the mass media channels and the actual surveys. This is not work that any enterprise can also well perform while the real estate market information has become less transparent as now. When there have not been State agencies that can organize, collect and analyze the market information, the real estate enterprises should choose the prestigious units to agree on providing suitable and essential information for their enterprises. In fact, according to the VietRees, it has been so hard for many businesses to carry out this work on their own. In the case that they cannot build up and effectively operate a team to handle this work, they can perform this through professional units that 2. How to enhance the competitive abilities of specialize in researching, providing the market the Vietnamese real estate enterprises information and consultancy in terms of real estate. To enhance the competitive abilities, one of the things that the enterprises need to do is to actively 4.4. Expand the business investment market evaluate their real ability and find out the most following the specific routes depending on the basic strength in order to promote the flexibility in scientific results of the market research each economic period. surveys. According to VietRees, only when the real estate enterprises possess, construct and promote their 4.5. Build up the legal department in each key competitive abilities in comparison with other enterprise having the function of offering legal competitors, they can have the sustainable and consulting to the managers and hold the works long-term development. of preventing the crisis risks. This definition will help the enterprises build the 4.6. Improve the real estate knowledge of the effective development and competitive strategies. current employees and attract the good 3. The weaknesses in the competitive abilities employees. This is the weakness of most of the Vietnamese of most of the current real estate enterprises • The quality and competitive abilities in terms of enterprises in general and the real estate enterprises in particular. To have highly management are poor. • The human resources are not methodically professional staff, the enterprises need to have the strategies for holding and attracting talents. To trained in terms of the real estate field. enhance the work effect, every enterprise should • The real estate information lacks transparency. offer professional training courses to the key staff • The quality of work is bad. in order to suit its requirements in each period. • The financial ability is low. Therefore, the effective training programs and • The weakness in terms of brand. plans have been one of the methods that the • Not really aiming at their right customers. enterprises have used to enhance the competitive abilities. Meanwhile, the enterprises should pay • Not understanding and strictly execute the law. attention to building up the reasonable treatment 4. Solutions to enhancing the competitive policies such as salary policy, bonuses to keep the stability in their volume of staff, especially the abilities excellent staff.

In addition, the enterprises should combine with universities and colleges to recruit excellent undergraduates in order to build the active young team to undertake the important professional positions in the near future. 4.7. Build up a good image to the public. Any enterprise understand clearly that if it wants to have a good public image, firstly, it has to win the customers’ trust by the quality of its service products, the marketing business activities and after-sales service, etc. Through the marketing and after-sales strategies to promote the enterprises’ own brands, if this work is well implemented by real estate enterprises, it would be very convenient for them to raise the capital through issuing their shares and bonds to the public. However, the real estate marketing activities on the current market have not received the proper investment from the investors, including the big real estate investors. When the market was eventful as in 2006 - 2007, the investors mainly focused on the phase of organizing the sales, the events and introducing the products and the marketing activities through media took place very incoherently and inconsistently. The investors have not created the difference or prominence for their real estate products besides the architectural design elements. Many investors have had many large real estate projects and traded products on their own but they have not had the marketing/business departments, marketing departments or the professional staff that are in charge of marketing. In the current difficult situation, a few real estate companies have had many new marketing ways, aiming at the real customers. 4.8. Expand the channels of raising capital for the real estate enterprises. The current capital source of the real estate enterprises has mainly come from the commercial banks. Although the banks have reduced the loan interest rates, the loan conditions have become more difficult than before. As a result, only a few real estate enterprises can borrow money from this main capital channel. A few companies have issued the shares on the stock market but they could not raise much capital because the stock market has been freely falling. In addition to the capital borrowed from the banks and mobilized from the stock market, the enterprises should expand issuing the enterprise bonds and real estate bonds from the real estate projects that they invested, meanwhile, promoting the works of the joint-venture, cooperation and merger for development. Summary: In the current market situation, if the competitive abilities have not been enhanced and there have not been the basic strategies, the enterprises will be able to suffer the loss, close down and go bankrupt. To ensure the objectivity in assessing the competitive abilities, VietRees would like to advise the enterprises to perform this work seriously and probably need the help of the prestigious consultants on the market. On the other hand, no matter how they assess, they also need to have the bases to compare with other enterprises that are in the same operation field, market segment and directly and indirectly compete with them.

VietRees – December 2008

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REAL ESTATE MARKET FORECAST * Note: Information on market forecast is only updated every 4 periods (after one month) by VietRees – January, 2009

General tendency of Ho Chi Minh City market

The transaction situation of apartments, townhouses and project ground bases in December has continued to decrease. According to VietRees’s forecast, the real estate prices can continue to go down with the decrease of approximately 5% per month in December and before Lunar New Year. The property prices in 2009 are hardly likely to be on the upturn. The successful transactions at the end of December last year was a little bit higher than the previous months. However, the transactions have just focused on the segment of low-value townhouses and apartments. For the group of the high-grade apartments, the rate of the successful transactions was quite low and inconsiderable. The amount of overseas national currency exchange at the end of this year has dramatically dropped and not been invested in the real estate field as in the previous years but it has been used for the production or paying the debts. The difficulties in the credit situation, the deflation of the economy and the coming maturity of the contracts mortgaged by the properties have made many properties to be sold out at the prices that are quite low, even lower than the initial selling prices of the investors. The total outstanding real estate loans have accounted for nearly 10% of the debts of the whole the banking system, therefore, the banks demand payment of the debts. And as a result, many investors have to sell their projects and products at the low prices. Many real estate enterprises have lacked the cash to maintain their business and it is very hard to borrow more money from banks. On the other hand, currently, some banks have consigned the mortgaged high-grade properties of the customers for sale and extended the debts so that the customers have more time to sell their properties in order to pay the loan contracts.

Apartment market

The supplies of the apartments belonging to the medium and low segment have been quite limited; therefore the market belonging to this segment has also seen no changes as compared to the previous month. Many high-grade apartments with low prices (mainly belonging to those who sell out their properties) are hunted for. Meanwhile, the situation of checking the prices of the sellers has appeared on the market through the self-listed selling prices that are quite low. The sellers have really not wanted to sell because they will suffer considerable losses if they do so. However, if they offer the high prices (though suffering little losses), it will be very hard for their properties to be sold at this time. The high-grade apartments have seen few customers, especially many apartments in Phu My Hung and many other areas in District 2 and 7. Although the prices have dramatically declined (over 50%), there have been few buyers. With the movements of the current market, according to VietRees, the prices of the high-grade apartments will continue to go down after Lunar New Year.

Project ground base market

Although the prices of the project ground bases have considerably dropped, they have still been too high to those who have real housing demands. As a result, the transactions have been are also very low. If these people have real housing demands, they will choose the apartments or townhouses, not buying ground bases. Therefore, the transactions have still been very slow. The prices of many ground base projects in some areas of District 7, Nha Be have declined by 60% but the successful transactions have still been very scarce. Many investors are worried about the ability of selling their real estate in the current difficult situation of the economy and the frozen market.

Real estate companies

Many previous companies that expanded their real estate business investment have now come back to their main business fields. Many secondary investors have faced many difficulties such as no cash and no customers. If this situation continues, the real estate investors who lack the capital will face bankruptcy risk; have to sell the projects at low prices and withdraw from the market in 2009. In fact, according to VietRees, there are a lot of middle-ranking and senior managers have withdrawn or temporarily withdrawn from this field or reciprocally convert their assignments between the real estate companies. According to VietRees, the real estate investors should switch to the apartment projects with suitable prices for the medium-income people, instead of aiming at the projects with the high prices like before. The medium-price projects can be sold quickly; help turn over the capital and take back the capital quickly. Then, the capital has been continued to be used for reinvesting in serving the customers who have the real demand because the demand of this group of customers has still drawn little attention and not been properly exploited yet.

Forecast in 2009

The real estate market with the current movements under the growing impacts of the financial crisis and global economic recession, the Vietnamese real estate market has seemed to be gloomier. VietRees has shown that there is a faint possibility that the market will recover in 2009. The market in 2009 will have more difficulties than in 2008. Many real estate investors and speculators will face the bank payments while the real estate prices have still not seen any signs of the recovery. According to VietRees, after Tet holidays, the real estate market will be an attractive playground and opportunity for the investors with the large capital and long-term investment strategies. The decline of the market will minimize the speculation. The market will be under the control of buyers, not sellers like before. For this reason, the potential real estate enterprises should build the long-term development strategies and actively work in the research and development, especially seriously investing in researching the market and customers; sustainable developing and avoiding the investment on a large scale in the current difficult situation.

The coming investment trends for Vietnamese real estate enterprises

The tendency of switching to the investment and development of the low-and-popular-price houses to attract the majority of customers is getting clearer. Many enterprises are planning to promote their investments in this market segment. It is expected that those who have medium and low incomes have many opportunities to approach this supply in the future. According to VietRees, enterprises should invest in the apartments with the relative areas of 40 – 60 m2, good structure, relatively good materials and equipments – (not need to be high-level ones), the selling prices of nearly 10 million/m2. The apartments with the value of around 400 – 600 million VND/flat will be likely to attract many customers. The customers that should be aimed at include the young families, students, workers and civil servants in Ho Chi Minh. In fact, some foreign investors are interested in this market segment. Therefore, the domestic investors should be quicker because, according to VietRees, Vietnamese enterprises can have more advantages than other foreign enterprises in this market segment.

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