Establishing real estate investment trust in Vietnam
Abstract
Since 2008, Vietnamese real estate market has been in frozen and this
stagnation has caused many severe consequent to the Vietnam. Although there are
large unsold inventories and huge bad debt; the investors‟ confidence in this market
keeps declining, tightened the credit lending policy along which the shortage in
investment capital has made the situation difficult than ever.
This thesis is the suggested solution for Vietnam real estate market which
is Real Estate Investment Trust - REIT - is a type of real estate companies modeled
after mutual funds; own and manage properties. It has been applied successfully in
many countries around the world and other developing markets are researching to
apply this model to their countries. It has to meet with requirements which make it
unique as well as attractive to be qualified as a REIT.
The thesis also introduces the Singapore REIT – one of the most
successful REIT in Asia: the second largest market capitalization and the leader in
cross-border REITs. These achievements were thanked to the prudential and
supportive regulations and effective management. As an ideal REIT, this thesis
analyzes and compares the performances of REITs and non-REITs in Singapore, then
infers the result into Vietnamese market as the expected return may be earned when
establishing Vietnam-REIT. After the calculation and analysis, the result comes out as
investing in “future Vietnam-REIT” which earn higher return then just investing in
Vietnamese non-REIT real estate stocks.
Nevertheless, with just the current available regulations and tax imposition
policy, it would be hard for Vietnam-REIT to operate and attract both of the real
estate companies and the investors. Therefore, this thesis also suggests the regulation
“lessons”, rules and procedure to convert into REIT from the two neighbor countries:
Singapore and Thailand.
In conclusion, this thesis expects REIT will give more opportunities for
both investors and the sector to invest, revive and grow in the liquid, stable,
transparent, effective and healthy manner.