Vietrees Newsletter 69 Week2 Month2 Year09

Weekly Newsletter

A69

Vietnam Real Estate

Week 2, February

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

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Market situation (p.2) Real estate foreign investment (p.2) Vietnam in the world (p.3) 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 Da Nang: prepare to buy houses to live in Tuoi tre – 09 Feb, 2009

Low interest rate, the real estate recover? Phap Luat – 09 Feb, 2009

Despite being allowed to buy houses in Vietnam, most foreigners have just started to learn about information Tuoi Tre – 05 Feb, 2009

The banks have begun to lend; the interest rates and the real estate prices have dramatically dropped which has helped the Da Nang real estate market to warm up. Transactions have mainly focused on people with real demands and houses with moderate prices. According to a real estate brokerage center, in the past six months, the center has just mainly focused on buying, selling and brokering houses rather than ground bases. Most of the buyers have real demands, but because their capital resources are limited, as a result, the houses with the maximum prices of about 500 million VND have attracted the customers and the houses of over 1 billion VND have been difficult to sell. The land prices on some big streets such as Nguyen Van Linh, Nguyen Huu Tho, Pham Van Dong and many residential areas in Son Tra district, etc have decreased by 20 - 30%. Currently, the real estate prices in Da Nang have been close to their real values, therefore, they are easier to be bought and sold. Additionally, the bank interest rate that has fallen by 8 - 10% per year is an encouraging solution to promote the real estate market. In addition, the mobilized interest rate that has dramatically slided has made the rich people calculate and seek other investment channels with a higher rate of profitability, including the real estate field. Many banks have shown that they have still created favorable conditions for those who have real demands, stable incomes and good abilities of payment or those who are cadres, civil servants to borrow money. It is also one of the reasons that have made the real estate market quickly prosper. Currently, the real estate transaction situation on the market has seen dramatic movements. Many real estate business companies have launched the goods for sale and the banks have reduced the loan interest rates, which has activated the real estate market. After a quite long time with no movement, the real estate investors have now bravely released the goods and attracted a large number of customers. After Tet holidays, the real estate transactions have dramatically increased. According to a real estate expert, the real estate has attracted customers at the beginning of the year due to the too low bank interest rate. The bank deposit has currently not been effective. The stock has continuously recorded new lows; as a result, the only investment channel that is most attractive at this time is the real estate field. In addition, one more reason that attracts the investors is the real estate prices are unexpectedly low. However, the experts have also advised the customers to be careful when investing; otherwise, the customers may easily fall into the traps of the real estate enterprises. Because in fact, the market has just begun to warm up when the buyers come back to find out the information but the real transactions have still been a modest number. They should wait until the end of the second quarter of this year in order to determine whether the market really warms up or not. Because at this time, the policies such as constructing 10,000 low-price apartments (promulgated by of the Ministry of Construction) or rescheduling, delaying tax, reducing interest rates, etc will be somewhat clearer. Therefore, it is still too soon to say that the real estate will warm up because in fact, there have still been many customers losing the confidence in the market. The statistics at the real estate transaction centers have shown that one month after the resolution on piloting the program of allowing the foreigners to buy and own houses in Vietnam takes effect (1st January 2009), the number of the foreign customers that has studied the information on the projects has increased as compared to before but there have not been any foreigners directly buying houses. Most of them have still bought houses through the old methods in which they buy the property under the name of local Vietnamese in order to avoid the troubles caused by red tape and bureaucracy procedures. In addition, although the resolution took effect since 1st January, the government has not promulgated the specific regulations on the implementation. Therefore, there is a strong possibility that foreigners are still waiting for a clearer policy and following the market situation and have not rushed to make their decisions. Another important reason is that the global financial crisis has also discouraged the foreigners from buying houses in Vietnam. According to the real estate business enterprises, the purchasing power of the foreigners working and living in Vietnam has potential. However, selling houses to these customers is not easy because the high-grade apartment prices in Vietnam have still been pretty high. Those who want to buy houses have to have high incomes and a plan for long- term living in Vietnam. Additionally, foreigners have the habit of buying houses on installment plans with bank loans. But, in fact, the barriers ahead come from the bank, that is, because the policies allowing the foreigners to buy houses have just been promulgated, the banks have not yet had the appropriate loan products. However, experts have also shown that they need to have more time in order that the policies may penetrate into the life. And then, the foreigners will switch to buying houses and this market will soon be set up.

REAL ESTATE FOREIGN INVETSMENT The number of projects receiving FDI in January, 2009 against the same period of last year Source: The Foreign Investment Bureau Until January, 2009 the whole country has attracted 62 projects with foreign investment (including the projects have investment increased) as compared to 45 projects in January, 2008.

Sponsor:

The Foreign Investment Bureau forecasts in 2009 and 2010 will be a difficult year for attracting FDI in Vietnam due to the impacts of the global financial crisis. However, the prospects for midterm and long-term investment in Vietnam still are considered to be good by investors.

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VIETNAM IN THE WORLD Vietnam ranked 3rd in middle-term development Kinh Te Do Thi – 12 Feb, 2009

Vietnam is ranked 3rd in terms of development prospect in the mid-term, which is one of the surveying results of the operation situation of 620 Japanese companies in foreign countries in 2008 conducted by Japanese International Cooperation Bank (JBIC) and presented at the Ministry of Planning and Investment on 11th February. Despite being ranked 3rd in terms of the development prospect for the business & production activities in the middle term (after China and India), the rate of supporting Vietnam has decreased as compared to 2007. The reasons why Vietnam has been highly appreciated include the good location for investment diversification, the low labor cost, the good development ability of the domestic market and the available supplies for the assembling industry. However, the problems that have still hindered the investment into Vietnam include the poor infrastructure development, difficulties in keeping the leaders of the companies and technicians / engineers, increasing labor costs, and the weak system of law enforcement. The fields that Japanese companies have been interested in when investing in Vietnam includes electrical / electronics appliances, automotive, general machinery and chemicals.

REAL ESTATE AGENTS Vietnam House open real estate transaction center BDS & TS – 09 Feb, 2009

Dong Nai: Thanh Phu project ground bases have many clients VietRees – 11 Feb, 2009

Inaugurating Sunrise Building – Cau Giay Kinh Te Do Thi – 11 Feb, 2009

Hoa Binh enjoys many projects at the beginning of the year VietRees – 13 Feb, 2009

Enterprises borrow money to build the project Thoi bao Kinh Te Viet Nam – 11 Feb, 2009

Vinaconex real estate transaction center opened

Sponsor:

The Vietnam House JSC held an opening ceremony for the real estate transaction center based at 40 Le Van Viet Street, Hiep Phu ward, District 9, Ho Chi Minh City on the morning of 6th February. The real estate transaction center provides the full services relevant to the real estate field such as: sale & purchase, transferring, brokerage, pricing and marketing the projects invested by the Company (The Boat Club Residences residential area, Truong Thanh 1 residential area...). On 10th February, 2009, Tin Nghia real estate transaction center officially offered the second phase of Thanh Phu residential area project (Vinh Cuu district, Dong Nai) for sale. This project has drawn the attention of a large number of customers including both customers with real demands and customers buying houses for their investment due to the reasonable prices. Only within 10 days before Lunar New Year, the whole first phase ground bases (200 in total) were registered by customers to purchase. This is one of the projects aiming at the majority of customers who have medium incomes of about 110 to less than 200 million VND / base which is divided into several installments. The deposit of below 15 million VND is the level many people can afford. In the first day, over 90% of the ground bases at the second phase offered for sale have been ordered by the customers. Thanh Phu residential area project is invested by Tin Khai Joint Stock Company with an area of 64 hectares, planned to be the complete urban area. It includes chains of 70 - 120m2 row houses, 180-250 m2 garden houses, the public works such as the administrative centers, education, health, culture, service trade. In addition, the project also designs the green spaces such as parks, flower gardens and sport courts. The complete system of the technology infrastructure includes traffic, water supply, drainage, electricity, communication, etc. After over 3 months in operation, Tin Nghia transaction center has served over 500 customers visiting it to make transactions, in which over a half of the customers who have the demand for buying real estate. According to many customers coming to make transactions at the center, real estate is still the essential demand associated with the lives of individuals, families and it is the first priority if they can find valuable products to invest in. With the positive signals such that banks have consecutively reduced the interest rates and gradually extended the real estate loans, the real estate transactions will tend to increase and warm up. On 10th January, No.3 Construction JSC (of Total Company Investment and Development of Hanoi) inaugurated and operated Sunrise Building at the D11 land plot, Nguyen Phong Sac Street, Cau Giay District. The project was started in 2006 with a total area of over 3000 m2 including the services and the housing area. Following the success of the contract on executing the reinforced concrete construction and completing two 23-storey buildings G and H of the Kenton Residences projects, Hoa Binh Real Estate Business and Construction JSC has been selected as the contractor for the project of Tan Hoang Minh building office invested by Trade Company Limited Service Hotel Tan Hoang Minh as investors. The project is located at 290 Nam Ky Khoi Nghia Street, District 3, Ho Chi Minh City with 14 storey and 2 basements, built on a site of 5,648.7 m2. The bidding of "Structure and finishing" worth 29.5 billion VND will be executed within 12 months. Vietnam real estate investment JSC - Vinaland has issued 100 Certificates of house savings (worth 5 million/ certificates) to execute the two projects Vinaland Tower and Saigon South Center on Nguyen Luong Bang Street, District 7, Ho Chi Minh City. Because this is the pilot program for mobilizing new capital, the certificate is mainly for the staff of the company and some regular customers. In fact, certificates of housing savings are a civil relationship in lending. In particular, Vinaland is the borrower and those who buy the certificates are the lenders in the form of saving every month. Each certificate will be converted into the right of buying 1m2 of the apartment floor area with the original price in the future and those buying certificates monthly will submit the savings following the face value of the certificates within 60 months (5 years). The Total Joint Stock Import-Export and Construction of Vietnam - has just opened Vinaconex real estate transaction center VITR based at the first floor of the building 17T5, Trung Hoa - Nhan Chinh urban area, Hanoi city. The transaction center is established and operated by Vinaconex ITC - the member of Vinaconex. Besides the functions including floor trading other property VITR will contribute to promoting the image, brand and product of real estate Vinaconex.

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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 Binh Duong: works start on Becamex urban center

On 8th January, 2009, Becamex IDC Corp has started the construction of Becamex urban center (Becamex City Center) 6.1 hectares in Phu Hoa ward, Thu Dau Mot Town, Binh Duong province.

Tuoi Tre – 09 Feb, 2009

The project has the total investment of 2,500 billion and is implemented following three stages; including the items of the high-grade houses, the complex of business - services - office and hotel. It is expected to be completed in 5 years.

Build Cai Gia – Cat Ba tourism urban area

Vinaconex Tourism Investment and Development is implementing the construction of Cai Gia - Cat Ba tourism urban with the investment of 600 million USD.

Thoi bao Kinh Te Sai Gon – 10 Feb, 2009

The urban area is over 172 hectares, located in the Cai Gia Bay, Cat Ba island district, Hai Phong city including villas, the hotels of from 3 to 5 stars, the business services - business and the public works and infrastructure. It is expected that until 2010 the entire technical infrastructure of the project will be completed.

Hemisco 30-storey high-grade housing area at Ha Dong

On 11th February 2009, Ha Tay Machine & Construction JSC and Song Da 1.01 JSC (project investor) held a ceremony to announce the decision approving the detailed plan for the construction of the highgrade housing area Hemisco at People's Committees of Phuc La Ward, Ha Dong city.

VietRees – 12 Feb, 2009

The housing area including 30 floors and 1 basement is planned with a total area of nearly 4.500m2. The project is expected to be completed by the end of 2011.

In January, 2009, the prices of the high-grade apartments in HCM City to light

The price change level of high-grade apartments in HCMC

VietRees – January, 2008

Announced prominent real estate developments during the last 2 weeks* Week 1 February 2009

Week 2 February 2009

Crown Land Long Hai tourism site (BR-VT) Vietnam hotel - oil Complex Vietnam (Hanoi) Wellnesss Life Resort Ninh Binh (Ninh Binh) Nhon Trach City Center (Dong Nai) La Perla Resort (Quang Nam)

High-grade housing area Hemisco (Ha Dong)

Ho Chi Minh City Other cities

Approved prominent real estate developments in HCM City* January

Housing, apartment, residential area

February

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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Page 6

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 Central Garden

1

81

28.3

-

Sailing Tower

1

104.6

71.4

+

15.8

Binh Minh

2

108

Riverview Thao Dien

2

138

23.5

Khanh Hoi 2

4

86.65

21.5

+

Cantavil, Dist.2

V- star, Dist.7

Sky Garden , Dist.7

* 150m2 – 1,700 USD/m2

* 119m2 – 15 million VND/m2

* 71m2 – 28.2 million VND/m2

Hung Vuong Plaza

5

132

27.5

* 89m2 – 28.6 million VND/m2

Canh Vien 2

7

118

32.9

Carina Plaza

8

100

14

Hiep Phu

9

97

13

An Lac

BT

76.6

11.8

Botanic

PN

109

27.1

Bau Cat

TB

56

15.2

-

Sunview 1

TD

71

12.9

+ -

+ -

-

Development land lots – HCMC

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

The Everich, Dist.11

Area: 95 – 398m2

* 83.6m2 – 19.6 million VND/m2 * 112m2 – 1,550 USD/m2

Price: 1,800 – 2,400 USD/m2

* 114.2m2 - 21.9 million VND/m2 * 150m2 – 1,650 USD/m2

Direct contact with the investor1

An Phu – An Khanh

2

200

23

Dong Thu Thiem

2

176

11.5

ADC Phu My

7

100

16

Kim Son

7

100

24

Khang An

9

168

6.3

-

Phu Nhuan

9

300

5.7

-

Gia Hoa 2

BC

100

11.25

Tan Kien

BC

100

9

Hoang Hai

HM

160

7

Chelsea Park

CG

128

24.7

CG

88

27.7 27

+

Apartment building – Ha Noi -

Preche, Dist.2

Panorama, Dist.7

Saigon Pearl, B.Thanh

Vimexco

* 147m2 – 2,222 USD/m2

* 121m2 – 35.1 million VND/m2

* 84m2 – 2,323 USD/m2

Thanh Cong

DD

172

* 166m2 – 39.3 million VND/m2

* 135m2 – 2,050 USD/m2

Kinh Do

HBT

125

32

Linh Dam

HM

74

13.9

-

Happy House Garden

LB

94

10.5

+

Vuon Dao

TH

126

24.3

-

Development land lots – Other provinces My Phuoc 3

BD

300

1.34

Khang Linh

BR-VT

225

5.1

Tuan Hung

BR-VT

90

3

Wind Hill

BR-VT

180

3.8

The Vista, Dist.2

New SaiGon, Nha Be

* 101m2 – 1,567 USD/m2

Nam Can Tho

CT

100

2.4

* 98.9m2 – 16.7 million VND/m2 * 38m2 – 1,908 USD/m2

HUD

DNI

120

2.1

* 135m2 – 1,650 USD/m2

* 121.4m2 – 17.7million VND/m2 * 139m2 – 1,810 USD/m2

Thanh Phu

DNI

100

4

1

The Manor, B.Thanh

+

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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Page 7

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 Fees of joining auctions for the right of using land to build dwelling houses in Hanoi Bao Xay Dung – 09 Feb, 2009

Petitioning for promulgating the law on real estate registration Ha Noi Moi – 10 Feb, 2009

Transferring real estate not allowed to reschedule the personal income tax Lao Dong – 11 Feb, 2009

According to the Decision on collecting the auction fee in the city that has just been promulgated by Ha Noi city People's Committee, the auction fee for the participants is stipulated to correspond to the starting prices of the land use rights or the sizes auctioned. In the cases of auctioning the right of using land to build the dwelling houses with the starting prices of below 200 million VND, the fee is 100,000 VND/document. With the prices of over 200 - 500 million VND, the fee is 200,000 VND/ document and with the price of over 500 million VND, the fee is 500,000 VND/ document. In the cases of auctioning the land use right for other purposes, the fee is based on the auctioned land area: the fee is 1 million/ document (for below 0.5 hectares); is 3 million VND/ document (for from over 0.5 to 2 hectares); is 4 million VND/ document (for from over 2 to 5 hectares); is 5 million VND/ document (for over 5 hectares). For the fee of auctioning assets, those who have auctioned assets have to submit the fee calculated on the property value if the properties are sold. The fee includes the level of from 50,000 - 18.5 million VND plus 0% - 5 % of the value of the sold properties. Those who join auctions have to submit the fees corresponding to the starting prices of the properties at the auctions with the level of 20,000 - 500.000 VND/document. Only the organizations and individuals who have the auctioned properties that are confiscated to put into the public treasury do not need to submit the auction fee. Ministry of Construction has proposed that the Law on real estate registration should be urgently promulgated according to the direction of forming one management office and granting one certificate including the right of using land and the properties on the land piece. According to the Ministry of Construction, because the law has not been promulgated, many localities have not executed the granting of certificate of house/building works ownership. On the other hand, only over 20 localities have promulgated the regulations on the process of granting certificates. Therefore, the granting of the certificates of house/building works ownership has been very slow. On 10th February, 2009, the representative of the Ministry of Finance has publicized some forms of incomes and the subjects who are not allowed to extend the time for submitting the personal income tax. Specifically, the residents who earn incomes from real estate transferring and award winning shall submit the personal income tax as from 1st January, 2009. For non-residential individuals: the other types of incomes from business, wages, salaries, real estate transfer; award winning, inheritances & gifts receiving shall have to execute the obligation to submit the personal income tax on 1st January, 2009. In terms of the order and the procedures for extending the time of submitting the tax, organizations and individuals that have temporarily deduct the personal income tax shall be entitled to return the tax to those who are extended the time of submitting tax. However, the organizations and individuals should still calculate the tax amount that they have to deduct and inform the individuals receiving the income. Monthly, organizations and individuals shall have to set up the declaration form on the tax amount deducted following the current regulations and submit the declaration form to the tax agencies in order for them to grasp the potential tax amounts which are allowed to be extended the time of submitting the tax.

CONSTRUCTION MATERIAL MARKET Steel and cement consumption go up together with the real estate market Edited by VietRees

The volume of steel consumption in January, 2009 is estimated to triple as compared to October, 2008, steel prices have been maintained at 11 - 11.8 million VND/ ton, in which the Northern steel price is 300,000 - 500,000 VND/ ton higher than the Southern. Although the consumption has increased, the steel price at the domestic market has still been dramatically decreased by the enterprises. The steel price of the Vietnam Steel Corporation at the factories excluding VAT is 10.95 million VND/ ton (rolled steel) and 11.14 million VND/ ton (bar steel). Cuu Long Steel JSC has reduced the price of all kinds of the imported steel plate by about 200,000 VND/ ton to be at 9.5 - 9.8 million VND/ ton. The eventfulness of the real estate market in the past time has helped the cement consumption increase. In January 2009, the consumption was estimated to reach 3.4 million tons, slightly increasing as compared to December 2008. Currently, the cement prices have ranged from 810,000 to 1,200,000 VND/ ton. According to the plan in 2009, the Northern enterprises will transport about 3 - 4.6 million tons of cement and nearly 2 million tons of clinker to the South in order to limit the local shortage that can push the cement prices up. The main cause helping the construction materials consumption increase is the construction demand in the last months of the year has dramatically increased. The real estate market has been gradually recovering together with the impacts of the policies on supporting the state-owned enterprises such as reducing the loan interest rate, rescheduling the debts, etc.

STOCK MARKET Two bourses gloomy , VN-Index sets up new bottom, HASTC-Index loses 0.44 points Edited by VietRees Chart Source: Vietstock Up to date: 13 Feb, 2009

* At the starting bell, although the decrease has not been large, the downturn has played the decisive role. Ending this phase, VN-Index has lost 1.88 points to go down to 274.21 points. The total trading volume has reached over 1 million units. Entering the consecutive order-matching phase, the codes have decreased in price in succession. Until the end of the session, VN-Index has lost a total of 1.58 points as compared to the previous session and closed at 274.51 points VND. After one trading week, VN-Index has one upward session and 4 downward sessions. As compared to the last week, VN-Index has lost 7.12 points (or 2.53%). Since the first session after Tet holidays, VNIndex has had 2 upward sessions and 8 downward sessions. * At Hanoi bourse, after slightly increasing in the previous session, HASTC-Index has come back to the downturn when losing 0.44 points to record at 90.94 points. The total trading volume on the whole market has reached 2.7 million units worth 52.1 billion VND. In sum, after one trading week, HASTC-Index has 2 upward sessions and 3 downward sessions. As compared to the session of last week, HASTC-Index has still lost 1.72 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 trends on the HCMC market

The situation of real estate transactions of apartments, town houses and project ground bases in January 2009 has continued to be gloomy although the prices have slightly decreased as compared to the previous months and some projects have even stopped reducing the prices. According to VietRees, the real estate prices in January have slightly declined because the bank interest rate has dropped and the construction materials prices have gradually become stable. The psychology of the market expects that the low interest rates will stimulate the individual investors to come back and this will somewhat impact on the prices listed on the market However, according to the analysis of VietRees, (1) Currently, most of the investors have lost the confidence in the stability of the market. (2) The prices of some apartment projects have still been very high. (3) Investors have been more experienced in assessing the projects and analyzing the market. (4) The market has had many choices and (5) been more careful in the transactions, as a result, surely, the prices will continue to decrease with the low amplitude in a short time.

Apartment market

The supplies of the apartments belonging to the medium and low market segment have been fairly limited, there is almost no new product and the market has seen almost no changes as compared to the previous month. Most of the successful transactions focus on the customers with the real needs not the investment purposes. The prices of the high-grade apartments has only fallen by 1%, however they have had relatively few customers, especially in the Lunar New Year people take little interest in buying the high-grade apartments in this stage. It is predicted that the prices of the high-grade apartments may continue to slightly decrease in the next few months.

Project ground base market

Although the prices of the ground bases have dropped, they have been so high to the people who have the real housing demand; so, the transactions are very few. If they have the real housing demand, they will choose to buy the apartments or town houses, not ground bases, therefore the transaction of ground bases has still been in dribs and drabs and even visibly stopped.

Real estate agents

Through the survey of the real estate business marketing agents in the past time, VietRees has realized that these agents has cut down on staff and the marketing budget substantially due to the sluggishness of the market. However, at present, according to the latest observations, some agents have actually become aware of the importance of the marketing and the stiff competitions in the market. As a result, in the near future they will focus on strengthening, streamlining the structure and continue to invest in training personnel, improving the customer service, marketing the brand image with the more focused, strategic and methodical plans than before. This is the praiseworthy sign of the market. According to VietRees, the agents that have a tight budget for marketing, they should focus on exploiting online media channels properly to reduce the costs and still reach efficiency as expected. They should not completely stop the activities marketing the brand images and products. This is the trend of the sectors in the current economy.

Forecast in 2009

Under the growing impacts of the financial crisis and economic recession, the real estate market in Vietnam seems to be gloomier. VietRees has judged there is a faint possibility for the recovery of the market in 2009. In 2009 the market will have more difficulties than in 2008. Many real estate investors and speculators will cope with paying the bank debts but the property prices have seen no signs of recovery. According to VietRees, after Lunar New Year 2009, the real estate market will become an attractive playground for the investors with large capital and long-term investment strategies. The downward market will minimize the speculation situation and the market is in the hands of the buyers not the sellers as before. As a result, the potential real estate enterprises need to build long-term development strategies and positively work on the research and development, especially, seriously invest in the market research and research the customers; steadily develop step-by-step and avoid spreading the investment in this current difficult situation.

The coming investment trends for Vietnamese real estate enterprises

The trend of switching to investing in the development of the cheap and common houses to attract the majority of the customers is becoming more perceptible. Many enterprises are planning to promote their investment in the market segment. It is very promising that the people with the low & medium income will have many opportunities to get access to this supply. According to the studies of VietRees, the enterprises should invest in the apartments with the relative sizes of about 40 – 60 m2, good structure, relatively good materials and equipments (not need to be the high-grade ones) and the maximum selling price of 10 million VND/ m2. The apartment’s worth from 400,000 to 600,000 million VND/ unit will be able to attract more customers. The customers should be aimed at newly married couples, students, staff and civil servants who are living and working in HCMC. In fact, some foreign investors have been interested in this market segment. Therefore, the domestic investors should take quicker actions because according to VietRees, Vietnamese enterprises are likely to have more advantages than the foreigners in this market segment. VietRees, in January, 2009

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