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60 seconds with Don Lam
13 May 2010
60 seconds with Don Lam, Chief Executive Officer and Co-Founder, VinaCapital
Q. What is your biggest challenge this year and how are you meeting it?
The cost of debt is currently high in Vietnam and this has slowed the real estate market both in terms of development and sales. Notwithstanding this, we have secured in excess of USD300 million in financing to develop our projects in the last 12 months, all from Vietnamese banks, so while interest rates have increased, there is still liquidity in the market for established investors and developers.
Q. What do you see as the biggest opportunity on the horizon?
Vietnam is at the beginning stages of a complete transformation of its urban spaces. The residential market is developing quickly, but supply still cannot keep pace with demand. There is an enormous opportunity for developers that can bring quality, affordable projects to market and create a loyal clientele. VinaCapital is attempting this with our newly launched ‘VinaLiving’ lifestyle brand, the first branded residential real estate vehicle in Vietnam.
Q. To what extent do you think regional and international confidence is returning to the real estate market?
Foreign investors are still very cautious, but confidence is slowly returning and over recent months we have seen renewed interest in real estate development in Vietnam, particularly from investors in Asian countries such as Japan, South Korea and Singapore. When the larger institutions begin to invest again, this will help smaller players feel the time is right to join in.
Q. Where in Asia would you invest $100m tomorrow?
Vietnam’s residential market is as strong as any market sector in the region. Much of the housing stock in Vietnam is old, and young Vietnamese want modern residences. Furthermore, Vietnam has 26 million urban dwellers today, which will rise to 45 million by 2020. That is an enormous potential market in terms of new city dwellers and existing urbanites who want upgraded housing. Vietnam’s long-term demand for urban regeneration makes it a market worth exploring.
Source: Cityscape Intelligence