A Hong Kong investment adviser is touting the potential of Hai Phong, the fastest growing city in Vietnam and dubbed as the Shenzhen of the Southeast Asian nation.
“Hai Phong is often referred to as ‘the Shenzhen of tomorrow’ because of its transformation into a modern industrial and logistics hub, attracting large amount of foreign investment into the city with the government’s commitment to upgrade transportation infrastructure,” said Kingston Lai, group CEO at Asia Bankers Club.
The company and its two affiliate companies are marketing The Minato Residence, a residential project in the northern Vietnamese port city developed by a Japanese joint venture, to investors in Hong Kong.
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Hai Phong’s rapid development into a manufacturing hub has drawn comparisons with the mainland Chinese city of Shenzhen, which has become a world-leading technology hub from a small fishing village in the space of 40 years. South Korea’s LG Electronics makes phones in Hai Phong, while Google is reportedly considering a production line for its Pixel phones. Apple suppliers are also mulling facilities in the city to supply the iPhone maker.
Last year, Hai Phong’s economy grew 16.7 per cent, more than double the 7.5 per cent of the capital Hanoi, government data shows. Foreign direct investment (FDI) into the city grew for three straight years up to 2018. However, FDI slipped to US$1.5 billion last year, from US$2.5 billion in 2018, according to local media.
As Hai Phong continues to draw foreign capital and the economy develops, the city could replicate Shenzhen’s success, said Lai.
Various new and future infrastructure projects, such as the expansion of the city’s Cat Bi International Airport, the Hanoi-Hai Phong-Halong Highway, and the US$1 billion expansion of the Lach Huyen deep sea port next year, are likely to further boost foreign investment into the city, according to analysts.
“Hai Phong’s attraction lies in its potential for residential development associated with industrial zones,” said Paul Tonkes, director of logistics and industrial services at Cushman & Wakefield Vietnam, noting that the city was attracting a “large number of foreign workers and expats, particularly from Hong Kong and mainland China.
“We believe the demand for residential sector in Hai Phong city exists, particularly in high-end projects but it would be mainly from companies purchasing for their expatriate workforce,” Tonkes said.
With a starting price of HK$1 million (US$129,000) for a two-bedroom unit, Asia Bankers said it has already sold 15 flats at The Minato Residence to investors from Hong Kong. The project, comprising two towers with 462 units each, is being developed by Japanese developers Fujita and Takara Leben. The first tower is due to be completed in December next year.
Rival consultants Colliers, too, were cautious in their assessment of property market in Hai Phong.
While Vietnam’s overall property market will benefit from the country’s successful containment of the coronavirus pandemic and the US-China trade war that drove production out of China, Hanoi and Ho Chi Minh City remain the most preferred locations for foreign homebuyers, said David Jackson, CEO of Colliers International Vietnam.
“Ho Chi Minh City has the most dynamic and highly valued property market,” Jackson said. “Hai Phong would be the most affordable in price or value terms. However, Hanoi would be the preferred residential and commercial location in the north of Vietnam.”
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