Magazine article Journal of Property Management

Rethinking Residential Properties in Vietnam

Magazine article Journal of Property Management

Rethinking Residential Properties in Vietnam

Article excerpt

Ever since it loosened its planned economy and started embracing capitalism in the 80s and 90s, the economy of Vietnam has been booming. Today, Vietnam is named among the "next eleven" countries to watch and also part of the CIVETS group of countries with the highest growth potential in the world. Nevertheless, Vietnam was not able to escape the worldwide global downturn of late. In recent years, high interest rates and inflation have hindered growth, and property management has become ever more vital for success during harsh market times.

Real estate business was one of the key drivers of growth before we witnessed the present economic slowdown. In 2010, the erection of Bitexco Financial Tower in Ho Chi Minh City, Vietnam's tallest at 68 stories, was just one of numerous development projects signaling a new era for the country. The building, boasting a helipad at the 50th floor, can be seen from almost every part of the city. However, real estate owners and developers have suffered from the recession and many of these promising developments remain undersold and in debt.

With companies trying to consolidate their positions and finding effective means of sustaining growth, the management of real estate has emerged as one of the key resources for owners and developers looking to cut costs by reducing expenditures in the real estate segment.

In the face of a dipping office demand, developers have decided to convert their high-rise office buildings into serviced apartments. We see this trend in the residential sector, too, as poor-selling condominiums are also turned into serviced apartments. These dwellings often Come furnished and provide the comfort of apartment living with the added benefits of services and amenities you would find in a hotel. This living situation is popular among international travelers, business people and the affluent classes of the city.

Serviced apartments require property managers who use skills and technologies in a more hands-on way to add value to their managed

portfolio. The management company, NAI Vietnam, continues to apply IREM management techniques and advanced technologies, such as management software and green energy methods to reduce operating expenses and increase customer services for clients' portfolios. They also market LEED-certified buildings as a selling point for potential tenants.

A second trend in Vietnam and other developing Asian countries is the continuing development and regulation of the condominium living model. Countries like China, Indonesia, India and Vietnam are seeing very rapid development--with thousands of condo apartments in new development coming to market weekly. …

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