PROPERTY

by IeFand's

What are the specifics of the e-town2 project?
E-town2 is a large commercial building under development on the well-established e-town business campus in Tan Binh district, near Tan Son Nhat international airport. The new building is comprised of 11 floors and two basement parking levels, with total net office space of 27,000 square metres. Construction of the building has been proceeding according to plan, and the target date for the grand opening is Christmas Day (December 25), 2006. Since the building is currently 58% pre-leased, we expect it be 70% pre-leased by the opening date.
How will the services and marketing programmes to be tailored to promote this project and attract tenants?
The marketing has been targeted at two main segments of the office space market. The first group consists of foreign multinational companies, both those which already have established businesses here in Vietnam and are seeking to expand and those who are currently entering the Vietnamese market in anticipation of Vietnam accession to the WTO. These companies are restricted either by the lack of available space in the CBD and/or the price of this space at the current time, and have decided that they do not necessarily need to be located in the CBD in order to succeed in this market.
For these companies, etown2 is an excellent option, a large floor plan to accommodate ever-increasing space requirements, reasonable rental rates, professional management by Colliers International to ensure a headache free safe and secure work environment; and extensive international-grade business facilities and services available on-site.
The second group consists of Vietnamese companies who are doing increasing amounts of business with foreign companies and are in need of a professional office environment in which to grow. For these companies, etown2 is an ideal location.
The professional office environment will help them make the best possible impression when dealing with foreign and local clients alike, and reasonable rental rates ensure that the price of this improved impression is much more affordable than it would be in the CBD. Since we are targeting two separate groups of businesses, we have had to tailor our marketing efforts to reach each of them. Colliers marketing campaign for etown2 has consisted of building awareness, communicating the potential benefits of locating an office here at e-town; and reinforcing the professional image of e-town which has been established since the original building opened in 2002 and is fully leased.
Do you find it difficult to persuade businesses to move to e-town2, which is not located in a CBD?
In most cases, we do not need to persuade businesses to locate their operations at e-town2. The e-town business campus has a well established reputation for quality, value, and professional management.
As a result, in response to our marketing efforts, we are often contacted by companies who are excited to move to etown2 because they understand the importance of quality, value, and professional management by Colliers International over simply a CBD location.
As per your experiences, marketing efforts and market situation, how long do you expect until the building will be fully occupied?
Given the lack of comparable office space in the current market and the huge amount of awareness and interest being generated by our marketing campaign, we expect the II-storey e-town2 building, with total net office space of 27,000 square metres, to be fully occupied by mid-2007.
REE is also planning to develop more e-towns such as e-town3 and e-town, along with e-town2. Do you feel that REE executives are over optimistic about the future of Vietnam's property market? Did they ask for Colliers' advice on their plans?
We do advise REE on the future developments. The property market in HCM City is driven by pure demand and supply fundamentals. Currently, [it has] little supply and very high demand. REE management is on right track on investing in commercial space to cater a high demand market.


A lake and urban centre covering a total area of 45.3 hectares will be built in Phan Dinh Phung ward, northern Thai Nguyen province, at a cost of US$100 million by the Intra Group from Japan, the People's Committee of Thai Nguyen city announced on November 17.
The Xuong Rong Urban Area will areas for villas, high-rise apartments and offices and a commercial centre and a green park, an entertainment area, a sports club and a lakeside hotel.


The third-largest property project in Hanoi has finally re-started after three-years on ice.
The Northbridge Development joint-venture was set up between Thai Northbridge Communities and Vietnam's Construction Corp No.9 in 1997 with total pledged investment of US$236 million over 45 years, 60% of that coming from Thailand.
Nguyen Van Huong, general director of the joint-venture, told Vietnam Investment Review that Hanoi Mayor Nguyen Quoc Trieu recently issued an order to municipal agencies to resurrect the project and develop new plans.
"This assignment is very crucial for our joint venture, permitting us to continue the project, which has been delayed for too long," Huong said.
The project made sporadic progress until 2003 but since then it has been held up, awaiting an official letter from the Hanoi People's Committee to continue. City officials cite several unspecified reasons for the delay.
"We also have studied the project site and finished the initial plan for land clearance and compensation already. The company will need a land use right certificate before implementing the compensation," Huong said.
The project is located in Dong Anh district on the outskirts of Hanoi, beside Kim Chung commune's Van Tri Pond, north of the Thang Long Bridge. It was first delayed in 1998 during the Asian financial crisis and was then resumed in 2002 when Northbridge reaffirmed its commitment.
Based on Huong's research, in 1998 the joint venture would have had to pay about 40 billion dong (US$2.5 million) for land compensation, and now it must pay 200 billion dong. However, he said that the two partners strongly believe in the potential of the current property market.
"We were permitted to recover expenses through other commercial constructions, such as residencies, offices and trading sites," he added. The project is now expected to be complete in three-years.
With US$236 million in investment capital, the joint venture will develop an area of 86 hectares involving construction of residential units, medical facilities and a commercial centre. Based on a feasibility study, it plans to offer 220,000 square metres of villas, 13,000 square metres of semi-detached houses and 52,000 square metres of apartments.
Northbridge Communities operates international schools and other property developments in Thailand and Cambodia. Other large real estate projects in Hanoi are Ciputra International, International Exchange City and the West Lake City. Of those, only the Indonesian-backed Ciputra is underway.