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Multinationals may hesitate to enter Vietnam because of rising land rent

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Rising land rent and shortages in industrial zones (IZs) may cause multinationals, which are seeking land near Hanoi and HCMC City, to hesitate to come to Vietnam.

Multinationals may hesitate to enter Vietnam because of rising land rent

Despite the Covid-19 pandemic and policies on restricted travel, more manufacturers are following the China plus 1 model and seeking places in Vietnam to set up their production facilities. This is why industrial real estate continues to see high growth in rental and occupancy rates.

Savills Vietnam reports that in 2020 the occupancy rate was 88 percent in HCM City, 94 percent in Dong Nai, 99 percent in Binh Duong, 84 percent in Long An and 79 percent in Ba Ria – Vung Tau.

In the north, the figures were 90 percent in Hanoi, 95 percent in Bac Ninh, 89 percent in Hung Yen, 82 percent in Hai Duong and 73 percent in Hai Phong.

The land rent was $129 per square meter in Hanoi (up by 13.1 percent), $95 in Bac Ninh (9.2 percent), $83 in Hung Yen (6.4 percent), Hai Duong $76 (15 percent) and Hai Phong $96 (3.2 percent).

As occupancy rates were high in areas around Hanoi, many investors had to move to Thanh Hoa, where the land rent was competitive, $40-$50 per square meter, compared with key industrial provinces in the north and south.

Thanh Hoa attracted $349 million worth of FDI in 2020, the 20th biggest FDI recipient. Foxconn’s development plans in Thanh Hoa have attracted electronic component manufacturers which provide materials to big investors.

Competitive land rent and a big labor force are the two biggest advantages of Thanh Hoa.

In southern provinces, the land rent in IZs in 2020 was $147 per square meter in HCM City, $107 in Binh Duong (+ 4.9 percent), $98 in Dong Nai (+ 6.5 percent), $123 in Long An (7.8 percent) and $65 in Ba Ria – Vung Tau (18.1 percent).

Matthew Powell from Savills Hanoi said the surge in land demand and land rent can also be attributed to improved development of infrastructure and better access to roads, harbors and airports.

However, the land rent escalation is a major concern for businesses, especially ones in industries with low profitability such as textiles and garments and interior furnishings.

If land prices keep rising, Vietnam’s competitiveness in price will be weaker, unless there is more industrial land in key economic zones to satisfy demand and stabilize prices.

As for land supply in the future, the Department of Economic Zone Management is expected to approve 561 IZ projects with a total area of 201,000 hectares. 

D. Anh

Source: https://vietnamnet.vn/en/business/multinationals-may-hesitate-to-enter-vietnam-because-of-rising-land-rent-725873.html

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Vietnam’s Bamboo Airways plans to raise $200 million in U.S. IPO: chairman

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HANOI — Vietnam’s Bamboo Airways plans to raise up to $200 million in an initial public offering in the United States, potentially securing a market capitalisation of up to $4 billion, its chairman Trinh Van Quyet said on Wednesday.

Bamboo Airways, owned by property and leisure company FLC Group, plans to offer a 5%-7% stake in the IPO, which it expects in the third quarter of this year, Quyet told Reuters in an interview.

“The IPO will be part of our efforts to expand our services globally,” Quyet said, adding that Bamboo Airways has been working with an international auditing firm for the potential offering on the New York Stock Exchange.

The company said last month it planned to list its shares on a local stock exchange in the third quarter, but Quyet said on Wednesday that was now “a backup plan, depending on market conditions”.

Quyet said the airline will increase its fleet to 40 aircraft by the end of this year, from the current 30, adding two Boeing 787-9 Dreamliners would be among the new planes.

He said the airline wanted to launch flights to new destinations including the U.S., Australia, Germany, Japan and the United Kingdom this year if the COVID-19 pandemic situation improved.

“We will start conducting chartered flights to the U.S. in July and target the launch of non-stop commercial flights between Ho Chi Minh City and San Francisco in September, with an initial frequency of three flights per week,” Quyet said.

Bamboo Airways, which made its maiden flight in January 2019, is targeting a 25% rise in pretax profit to 500 billion dong this year he added.

Source: https://tuoitrenews.vn/news/business/20210415/exclusive-vietnam-s-bamboo-airways-plans-to-raise-200-million-in-us-ipo-chairman/60370.html

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Efforts to stimulate domestic consumer market continue as pandemic threatens exports

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Consumers shop at Co.opmart supermarket on HCM City’s Nguyễn Đình Chiểu street. Cities and provinces across the country are seeking ways to promote domestic consumption of goods and services. VNA/ Photo Mỹ Phương

HCM CITY – Many provinces and cities have launched programmes this year to promote local consumer demand to support businesses as the COVID-19 pandemic continues to affect exports.

The Ministry of Industry and Trade will organise conferences to connect producers, suppliers and retailers, and events for producers and traders, especially small traders, to help take goods to residential areas, industrial parks and rural and mountainous regions, the Sài Gòn Giải Phóng (Liberated Sài Gòn) newspaper reported.

It will help encourage consumption by fostering the evening economy and holding fairs and exhibitions of products and services. It continues to implement the ‘Vietnamese people give priority to using Vietnamese goods’ programme.

It will also promote the adoption of IT and foster e-commerce.

The Hà Nội Department of Industry and Trade will organise five Vietnamese Goods Weeks this year to stimulate demand.

To be held in the districts of Hà Đông, Hai Bà Trưng, Nam Từ Liêm, Quốc Oai, and Ba Vì, they will have around 100 standard booths each.

Companies and co-operatives will exhibit food products, textiles, footwear, consumer goods from One Product One Commune programmes from Hà Nội and other cities and provinces.

The department will subsidise booth costs by 50 per cent.

The city will also support localities and businesses in Hà Nội and elsewhere in selling agricultural and aquatic produce that face difficulties in selling due to the pandemic.

It will strengthen communications and promotions, create the best conditions for businesses to reach consumers and expand their market.

Products displayed and sold at the events will all be Vietnamese products with quality, food safety and traceability guaranteed.

To effectively implement the programme, the department has called on people’s committees of districts and towns to review all businesses and co-operatives to participate in the 2021 Vietnamese Goods Week of Hà Nội, especially agricultural produce that are difficult to sell and the One Product One Commune programme.

According to the newspaper, the Cần Thơ City Department of Industry and Trade also plans to organise a promotional month programme, possibly from April 10 to May 10.

It will seek the participation of businesses, supermarkets, commercial centers, convenience stores, restaurants, hotels and entertainment venues.

HCM City plans to focus on digitisation of industry and promotion of domestic tourism.

Deputy director of the city Department of Tourism, Bùi Thị Ngọc Hiếu, said her agency is stepping up digitisation, and the sector would continue its efforts to boost domestic tourism to drive the recovery of the industry.

Tourism co-operation and linkages between HCM City and the north-east, north-west and the central regions would also serve to boost domestic travel, she added. –

 

 

Source: https://vietnamnews.vn/economy/926004/efforts-to-stimulate-domestic-consumer-market-continue-as-pandemic-threatens-exports.html

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​Bamboo Airways plans US IPO in Q3

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​Bamboo Airways plans US IPO in Q3

A Bamboo Airways aircraft lands at Da Nang International Airport in March. Photo by Shutterstock/Jeffry Surianto.


Private carrier Bamboo Airways is considering an initial public offering of shares in the U.S. this year to raise $200 million.

The IPO is expected to take place in the third quarter, with the company likely to offer a 5-7 percent stake to secure a market capitalization of up to $4 billion, Reuters quoted its chairman, Trinh Van Quyet, as saying on Wednesday.

It is preparing for the issuance together with an international auditing firm and plans to list on the New York Stock Exchange.

Last month, Quyet had announced the airlines plans to list 105 million shares on either the Ho Chi Minh Stock Exchange or Hanoi Stock Exchange at an initial price of VND60,000 ($2.61), but on Wednesday he said that has now become “a backup plan”.

“The US IPO will be part of our efforts to expand our services globally.”

It expected to operate charter flights to the U.S. from July this year and thrice-weekly commercial flights from HCMC to San Francisco from September.

The airline has received a permit from the U.S. Department of Transportation to carry passengers and cargo to that country.

This year it also plans to expand its fleet from 30 aircraft to 40, and launch flights to other new destinations like Australia, Germany, Japan, and the U.K. if the Covid-19 pandemic is under control.

It currently flies on 60 domestic routes.

Last year, it carried over seven million passengers to account for a 20 percent market share, and hopes to increase it to 30 percent this year.

Source: https://e.vnexpress.net/news/business/companies/bamboo-airways-plans-us-ipo-in-q3-4263154.html

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