Many property investors from HCMCity are seeking opportunities in neighbouring provinces like Binh Duong and Dong Nai, where land prices are only 20 to 30 per cent of those in HCMCity.

 

On April 26, more than 700 buyers drew lots for 400 plots of land at the Hoang Gia Urban Residential Area in Binh Duong Province. Many investors from HCM City hope that the lower prices of land in this residential area - VND275 million for a 150-sq.m plot and VND550 million for a 300-sq.m plot - will be a good investment for the future.

Luong Tri Thin, director of the Dat Xanh (Green Land) Co, developer of the Hoang Gia Residential Area project, said total investment in the 65.8ha project in My Phuoc Industrial Park No 3 in Binh Duong's Ben Cat District amounted to VND1.2 billion (US$67 million).

According to the Nguoi Lao Dong (Labourer) newspaper, the property market in Binh Duong's industrial parks like My Phuoc IP No 1, No 2 and No 3 is bustling now because land prices have hit the "bottom."

Land prices in My Phuoc IP No 3 have dropped from VND2.7 million per sq.m in early 2008 to VND1.2 million per sq.m now, making it very attractive to both those who need accommodation and investors aiming to make a profit.

Dong Nai Province is experiencing a similar fall in land prices, down to a fourth or a third of those in HCM City's residential areas, drawing lower-income buyers into Bien Hoa City. In April, many investors from HCM City sought to buy plots in residential areas along National Highway No 21 in Bien Hoa. All the plots of land priced between VND2 million and VND3 million per sq.m have been sold.

Nguyen Thi Thanh Huong, director of the Tin Nghia Property Floor in Bien Hoa City, said in the first four months of 2009, more than 500 plots of land in Thanh Phu Residential Area in Vinh Cuu District were sold at VND110 million to VND185 million for a 90 sq.m plot. However, the news of a new international airport in Dong Nai's Long Thanh District and the HCM City-Long Thanh-Dau Giay Highway has forced land prices up in these areas.

Nguyen Thanh, director of a property firm in Long Thanh District, said price of agricultural land in the district had doubled from last year's VND150,000 per sq. m. But all land trading activities here were not being notarised by authorised agencies.

According to the Foreign Investment Department under the Ministry of Planning and Investment, in the first four months of the year, a whopping 91 per cent of the $6.36 billion FDI inflow into the country targeted the real estate sector.

The department says registered capital for hotel and resort projects amounted to $4.5 billion, followed by urban area projects at $600 million and office building projects at $684 million.

Separation anxiety

While Vietnam Airlines rejects the proposal to split its subsidiary - the Viet Nam Air Petrol Company (Vinapco) - from the parent company, economists feel both may benefit from the separation.

Economist Le Dang Doanh, former head of the Viet Nam's Central Institute for Economic Management (CIEM), says in the long term, the seperation will allow the national carrier to sharpen its focus on expanding its routes and providing better service.

Doanh says Vinapco's monopolised services would make sense if Viet Nam Airlines was the sole carrier in the country's civial aviation market. In fact, there have been disputes between the Vinapco, the country's sole aviation fuel supplier, and other carriers like Jetstar Pacific and Indochina Airlines. Others argue that since Vinapco supplies aviation fuel to both its parent company and its competitors, Vietnam Airlines can use its position to benefit itself and to undermine its rivals.

The nature of the relationship between Vinapco and the newcomers in the local aviation market, such as Vietjet and Mekong Aviation, cannot be predicted, says Doanh.

Vo Tri Thanh, head of CIEM's International Economic Integration Department, says since Vinapco remains the sole aviation fuel supplier, authorities must regulate its activities more strictly.

The proposal to split Vinapco from Vietnam Airlines, made by Jetstar Pacific Airlines, was announced by the Ministry of Industry and Trade's Competition Management Department after a hearing on April 14.

Jetstar Pacific's CEO Luong Hoai Nam says no other airline in the region has its own fuel supply firm.

Vietnam Airlines says the proposal will undermine the national flag carrier by breaking its technical and service systems, which are self-sufficient. Vinapco supplies aviation fuel to over 60 international and domestic airlines in Viet Nam. In 2008, Vinapco supplied 577,300 tonnes of fuel for a turnover of VND10.38 trillion ($530 million).

Promo blues

A major promotion event organised by the Parkson Saigontourist Plaza has left many customers feeling cheated by the company, eliciting an apology from its CEO Tham Tuck Choy.

Choy, who says the shopping festival was held to "honour" the plaza's customers, says the company regrets inconveniences suffered by guests and clients at the April 17 event.

According to VietnamNet, thousands of clients were invited to the shopfest at the Parkson Saigontourist Plaza on Le Thanh Ton Street in HCM City's District 1. The invitation, which said those attending the event would get four bonus coupons each worth VND150,000 and enjoy a discount of 20 to 70 per cent on all products sold at the supermart, attracted a large number of shoppers to the plaza, causing traffic jams on Le Thanh Ton Street.

But the invitation made false promises, say customers. Tran Kim Khanh Tien, a District 2 resident, was disappointed because she came to know that only customers who bought goods worth over VND4 million each would get the coupon.

Nguyen Thi Binh, who works at a commercial bank in District 3, says it made no sense to "take my family to this plaza to buy goods at sky-high prices for getting coupons worth VND600,000".

Nguyen Huu Bao of Phu Nhuan District says such false advertising will make customers turn their back on the plaza's future promotion campaigns.

Choy is quoted by VietnamNet as saying Parkson had sent out 20,000 invitations hoping about 15 per cent would turn up. But the number of customers attending the event far exceeded expectations.

He asserts prices of several items at Parkson Plaza, such as Ice, Mugigae, Puma, and Disney Corner were deducted by up to 70 per cent. He has affirmed Parkson will send gifts and "conditional" bonus coupons to all customers who did not receive them on April 17. - VNS