European investors keen on Central Region of Vietnam

The central city of Da Nang and its neighbouring provinces of Thua Thien-Hue and Quang Nam will offer optimal conditions to lure investment from European countries in hi-tech, tourism, logistics, health care and advanced farming.

The three localities, which connect to the East-West Economic Corridor linking Laos, Thailand, Myanmar and Vietnam, are considered to have good investment potential with long coastal lines, world heritage sites, preferential policies, cheap land prices and abundant labour force.

They are also situated on National Highway 1, as well as having railway, sea port and airport systems and large areas for industrial zone development. A series of administrative reforms easing investment have been cleared by local administrations.

Le Canh Duong, Director of Da Nang’s Investment Promotion Centre, said tourist real estate remains a favourite investment magnet in the city with 25 foreign direct investment (FDI) projects worth 1.8 billion USD. He said tourist real estate made up 54 percent of total 3.68 billion USD of FDI capital in the city. Duong also said 57 percent of FDI projects were in the service sector as the city eyes on developing in Information Technology, hi-tech parks and coastal property, and environment-friendly projects. The city has so far developed 16 tourist property projects consisting of 749 villas, of which 609 are for sale and 140 for lease, according to him. EuroCham Vietnam will start operating an office for central Vietnam in Da Nang in January 2017.

Quang Nam is developing the 30,000ha Chu Lai Open Economic Zone – one of five key zones for investors in Vietnam – with competitive land prices of between 10 USD and 30 USD per sq.m for 50 years, said Director of the provincial Investment Promotion Centre, Vo Van Hung. The province has attracted 128 foreign direct investment projects worth 5.5 billion USD, of which the Nam Hoi An Integrated Resort Project, invested by VinaCapital and Gold Yield Enterprises Corporations, is the biggest at 4 billion USD. It is seeking investment in automobile supportive industries, food processing industries and industrial park infrastructure.

Earlier this year, the province and the Truong Hai Automobile Joint-Stock Company, or Thaco – started expanding the Chu Lai-Truong Hai Mechanical Automobile Industrial Zone with a total investment of 35.3 million USD. The project is planned to produce 215,000 vehicles, including touring cars, trucks, buses and vans starting in 2018. Hung said land costs only half or one-third compared to Hanoi and HCM City, respectively. He said Quang Nam has reserved 10,000ha of coast for tourism and service projects.

Le Van Thu, director of Investment Promotion Centre of Thua Thien-Hue, said Hue city has 128 km of coast and 22,000ha of lagoon for tourism development in connection with UNESCO-recognised world heritage sites. “The province hosted 3.2 million tourists, among them 1.2 million foreigners, in 2015. We are offering investors competitive low cost, including labour cost and land,” Thu said. “Our land costs around 80 percent of what it costs to rent in Da Nang, 70 percent of Hanoi land, 60 percent of HCM City, 30 percent of Shanghai and 25 percent of Bangkok land,” Thu said. He added labour costs for manual workers and managers range from 130 USD to 320 USD per month. The province has attracted 23 foreign direct investment projects with a total capital of 2.3 billion USD. One of the largest is an 875 million USD tourism complex being financed by the Banyan Tree Group of Singapore.