Vietnam developer to emulate Singapore social housing models

Vietnam's Kim Oanh Group is in a position to open a “new chapter” in real estate development, building around 40,000 social housing units in southern Vietnam by 2028, utilizing Singaporean standards and expertise.

The developer said its new chapter responds to a scheme approved by the Vietnamese government early this March to construct at least a million units of social housing for low-income people across the country by 2030, with construction to be funded by multiple sources.

The scheme expects to make houses affordable for families with low and average incomes in urban areas, and for workers in industrial zones.

Alongside the approved scheme is a credit package of VND120 trillion ($5.1 billion) for developers and homebuyers that the State Bank of Vietnam was been assigned to implement.

“For our new chapter, we desire to change the established idea that social housing units are cheap and low-quality products. Our business partner for the new outlook is a leading social housing player in Singapore, the government-owned Surbana Jurong,” Kim Oanh Group chairwoman Dang Kim Oanh said at a Saturday press briefing.

“Surbana Jurong is involved in developing around 80% of social housing products in the city state, which is famous all over the world for its high-quality social housing developments for residents,” she said at the press meeting held in Binh Duong province bordering Ho Chi Minh City.

Kim Oanh, which recently moved its headquarters to HCMC from Binh Duong, signed a social housing development partnership with Surbana Jurong on July 14 in Singapore to carry out its new business chapter, which also includes commercial housing products

Surbana Jurong is wholly owned by Singapore state investor Temasek Holdings. The global urban, infrastructure and managed services consulting firm employs architects, designers, planners, engineers and other specialists driven by progressive thinking and creative ideas to help shape a better future for people.

Kim Oanh plans to spend VND31 trillion (over $1.31 billion) on 26 projects to build around 40,000 social housing units in southern Vietnam by 2028. Of these 23 will serve social housing purposes and three will construct budget homes.

“All design work will be performed by Surbana Jurong, based on our requirements and project-site realities,” the chairwoman said.

In addition to Surbana Jurong’s well-known design capability, the Singapore firm is able to offer very low fees in managing and operating budget apartment blocks, she added, specifying these at VND5,000 ($0.21) per square meter per month in Vietnam from her group.

In the first phase, from now until 2026, the developer will introduce to the market 14 projects with 25,000 products, including about 4,800 low-rise and high-rise social housing units in Binh Duong and Dong Nai province this year.

The developer has not disclosed its exact social housing prices, but Oanh said a one-bedroom apartment in Dong Nai province would cost around VND750 million ($31,702).

Since the VND120-trillion credit package is operational, housing loans from Vietnamese banks can be used by eligible citizens to make purchases.

Under the government’s Resolution 33 dated March 11, 2023, the interest rates are about 1.5-2 percentage points lower than the average long-term Vietnamese dong loan interest rates offered by state-run commercial banks, including the Big 4, which are Agribank, BIDV, Vietcombank and Vietinbank.

For all housing developments, Kim Oanh Group has more than 500 hectares available in southern Vietnam, mostly in Binh Duong, Dong Nai and Ba Ria-Vung Tau province, as well as on Phu Quoc Island offshore Kien Giang province.

Other partnerships

Oanh said that before embarking on the partnership with Surbana Jurong, the group had signed a strategic partnership deal with Sumitomo Forestry, part of Japanese conglomerate Sumitomo Group. Sumitomo Forestry produces building and finishing materials made of wood, metal and ceramic.

In Vietnam in 2017, Sumitomo Forestry struck a strategic partnership with An Cuong, a leading woodwork and decorative materials company in the country. This cooperation has helped An Cuong cement its position in the domestic market by expanding a supply chain in housing construction, and reach out to overseas markets.

Oanh said that the partnership with Sumitomo Forestry, together with other partnerships inked with Singapore-based Frasers Property, Canada-headquartered educational services provider Maple Bear and some major Vietnamese companies, will support her group’s real estate growth and ambitions to become a multi-business group. The new business operations will include developing industrial properties as well as education and healthcare projects.