Southern Binh Duong province attracts foreign investment in affordable housing

Affordable housing refers to properties priced at around VND40 million (US$1,580) per square meter in HCMC and VND25-35 million per square meter in nearby provinces.

A joint venture between Vietnamese developer TT Capital and Japanese firms Cosmos Initia and Koterasu recently announced plans to invest around $150 million over the next five years to build thousands of affordable apartments in Binh Duong and other neighboring provinces near HCMC.

Bcons Group has partnered with Thai enterprise A Asset to develop 11 affordable apartment projects with nearly 9,000 units in Binh Duong.

CapitaLand recently launched a 19-hectare housing project in the province with 3,500 units. It is the Singaporean developer’s largest and cheapest development in Vietnam.

According to the Binh Duong Department of Planning and Investment, around $825 million worth of foreign direct investment came in the first half of 2024 into 96 new ventures and numerous existing projects.

Real estate firm Dat Xanh Services said the FDI primarily focused on large-scale industrial and affordable housing projects.

Trang Bui, real estate services firm Cushman & Wakefield Vietnam’s country head, said foreign investors closely observe trends in the Vietnamese market and the government has been promoting the development of affordable housing, and so it is no surprise that that they are investing in this segment.

Binh Duong has a lot of land available, fewer restrictions on high-rise buildings, streamlined legal procedures, and a transparent business environment, she noted.

So the cost of developing a project there is much lower than in other provinces.

The legal aspects are important because many foreign developers have in the past quit Vietnam due to the lengthy project approval processes that could take five or six years, she added.

Thien Duong, general director of interior designer GroupGSA Vietnam, said major companies like Tokyu, Sembcorp, AEON, and Central Retail have developed several urban, residential, commercial, and industrial properties in the province in recent years and more investors are eager to follow suit.

Foreign investors prefer large-scale projects, but they are difficult to develop in HCMC due to high prices and limited land supply, he said.

Binh Duong has good infrastructure, ample land supply and competitive costs, making it the best location for foreign developers at the moment, he added.

Experts forecast housing demand in Binh Duong, a major manufacturing hub, to remain high due to industrial development. It has 29 industrial zones and 12 industrial clusters.

Every year its population grows by over 100,000, mostly fueled by migration of workers.

A recent report by property consultancy Savills said 80% of the new apartments sold in the province this year were bought by HCMC residents.

Savills forecast that, in the next three years, around 24,000 affordable apartments will be built in Binh Duong and Dong Nai Province, another of HCMC’s neighbors.

As land becomes increasingly scarce in HCMC, it expected nearby provinces, especially Binh Duong, to see more large-scale projects by foreign developers.