Will Vietnam's new financial centre go Singapore style?
[HO CHI MINH CITY] Vietnam's decade-long bid to build an international financial centre (IFC) is nearing a key breakthrough, with its Parliament expected to approve special regulatory mechanisms in May.
This has intensified investor interest in real estate tied to projects in Ho Chi Minh City and Da Nang – the two locations that have been identified for the country's new international financial hub s.
Authorities in the two cities have earmarked vacant land parcels to woo billion-dollar projects and sought expert advice to lobby for favourable policies in order to draw global capital.
Observers say that Singapore, as the region's financial hub, is naturally seen as a key source of expertise and inspiration for various players participating in Vietnam's ambitions.
Over the last 10 years, foreign investors have proposed to Vietnamese authorities to have developments similar to those in Singapore, such as Marina Bay Sands (MBS) integrated resort and the Le Freeport asset storage facility.
A consortium of American investors has partnered with Vietnamese tycoon Johnathan Hanh Nguyen – who is chairman of luxury retail conglomerate Imex Pan Pacific Group – to propose the development of an integrated resort similar to MBS.
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The proposal has been backed by prominent figures including former Las Vegas Sands (LVS) president William Weidner, casino architect Paul Steelman and Cantor Fitzgerald chairman Howard Lutnick. Lutnick is the current secretary of commerce in US President Donald Trump's administration.
Their initial plan was to site the IFC at the Thu Thiem urban area in Ho Chi Minh City, and this was later expanded to Da Nang's Son Tra district. They aimed to develop a mega integrated project that would include an office tower, a shopping district, resort complex and casino.
The concept mirrors the Marina Bay Financial Centre in Singapore, which is about 500 m away from MBS.
MBS, owned by LVS, is an iconic Singapore landmark. Situated in the heart of Singapore's Marina Bay district, the property has three hotel towers with a luxury mall, convention centre and Michelin-starred restaurants.
In August 2024, Nguyen told a conference that US investors had committed in 2021 to attracting US$10 billion to establish the financial centres in Da Nang and Ho Chi Minh City.
'I believe investors still want more open and breakthrough mechanisms,' he said. 'They need commitments from the Vietnamese government and a clear national strategy to ensure this plan is sustainable and promising.'
No 'sure wins' for investors
Govinda Singh, executive director at Colliers International, noted that IFCs often follow a similar development pattern, featuring Grade A office spaces complemented by amenities such as restaurants and, in some cases, hotels.
'There are no sure wins (for early investors). The question is, will there be a strong demand and presence of multinationals together with larger local conglomerates that will take up the space quickly? If not, vacant IFCs are a risk and will work against their attractiveness,' he said.
He noted that the growing interest in incorporating commercial and hospitality developments in these hubs is driven by uncertainty surrounding the viability of a standalone IFC focused solely on office space.
'Adding an integrated resort could make the proposition more compelling, especially if locals are allowed entry, but Vietnam still lacks the presence of multinational corporations and regional headquarters that underpin Singapore's success,' he said.
Eyes on Da Nang
Some investors from Singapore, meanwhile, are said to be actively exploring opportunities in the planned IFC in Da Nang, a popular tourist spot in Vietnam known for its picturesque beaches.
Da Nang has designated six land parcels for the development of the city's IFC: a 9.7-hectare site overlooking the estuary of Da Nang's iconic Han River (pictured), and five other lots covering 6.17 hectares along a street that connects the city centre to My Khe Beach. PHOTO: JAMILLE TRAN, BT
A proposal by Terne Holdings, a sustainable real estate advisory and investment group headquartered in Singapore, suggested the establishment of a Singapore-like Le Freeport – a facility intended for the super-rich to store their assets in Da Nang.
'As a differentiator, by introducing Le Freeport for secure storage of gold bullion, art and collectibles, Da Nang can attract high-net-worth individuals and banks looking for asset-backed financing,' said Andy Khoo, managing director of Terne Holdings, at a conference in Da Nang earlier this year.
Last November, the group finalised its investment in The One Destination, a local developer specialising in environmental, social and governance real estate in Vietnam, with the first venture being a US$68 million complex in Vietnam's highland city of Da Lat.
Khoo said the potential of Da Nang lies in its cost-competitiveness and strategic geographic location. The city is home to the Tien Sa and Lien Chieu seaports, which are situated near the trade routes of the Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
'(No region) has higher potential in Vietnam than Da Nang to position itself as a trade finance hub with the emergence of the two ports, a decentralised free trade zone planned in nine locations, and now an IFC,' he told The Business Times.
Terne Holdings signed a memorandum of understanding with the Da Nang People's Committee in January to provide assistance for the planning of the city's IFC, especially in terms of talent development in the financial sector.
Makara Capital Partners, a global financial services firm that jointly launched a S$1 billion fund with the Intellectual Property Office of Singapore, also pledged to provide 'significant resources', including sending top experts to help Da Nang realise its IFC dream.
Neither provided details of their proposals, but they suggested that Da Nang needs to plan, invest and build not just physical infrastructure but also a legal framework to facilitate the influx of international companies and capital.
'Da Nang has the space, the scale, the people Singapore doesn't have,' Khoo said, 'because of that, it can attract new monies, new industry players. That's why it can differentiate itself from Singapore.'
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