Vingroup, Vietnam’s largest property developer has announced that its Vinhomes subsidiary will move into the affordable housing segment and develop affordable properties. In its public announcement, the company said that it will create new developments for low-income people, who live in industrial zones across the country.
Vinhomes currently offers both high-end and mid-level homes across Vietnam and was recently listed on the Vietnam stock exchange. With the expansion into the “affordable housing” market, Vingroup covers all three segments of housing real estate.
Its brands include Vinhomes, targeted at the high-end real estate segment; Vincity, for the middle housing market; and Happy Town, its brand for the affordable housing market. Affordable housing is the most promising segment for Vinhomes since the market lacks major developers and almost 80% of Vietnamese say that are interested in purchasing “affordable” units.
Vinhomes listed on the Vietnam stock exchange in May 2018 and immediately became the second most valuable stock, after its parent Vingroup. Vinhomes CEO Nguyen Dieu Linh said that listing on the stock exchange gives the company the ability to raise funds for new projects. Currently the company has 10 projects under construction and the company will be seeking capital to fund 26 new projects by 2021.
Vincity projects have been underway since 2016 and sales for residential units are scheduled to start later this year, providing 200,000 to 300,000 units to the market by 2020. Prices start at approximately $32,000 USD (700 million VND) per unit.
In the first phase, Happy Town projects will be developed Bac Ninh, Binh Duong and Dong Nai provinces since each province has large industrial zones and many migrant workers. Happy Town unit will be 30+ square meters in size and will cost around $8,750 USD (200 million VND). Although the prices are low, Vinhomes has pledged that the residential units will be of “high quality” and that the company is willing to sacrifice profits on these projects in order to help create a stable and secure environment for workers.
Other Vinhomes developments will be located on the outskirts of major cities, reflecting the group’s ambition to form satellite urban areas that reduce population density and congestion in the central areas of established metropolises like Hanoi and Ho Chi Minh City.A spokesperson for Vingroup said that the company’s projects are part of a “makeover of Vietnam’s suburbs” and that apartments projects will be developed as a part of self-sufficient mini-suburbs with integrated hospitals, schools, stadiums, shopping centers, and parks.