Building Vietnam’s Next Urban Growth Engines

Good afternoon, good afternoon ladies and gentlemen. Pleasure to welcome you to this concurrent lunch session. My name is Andy Staples, I'm Editorial Director for Fortune for Asia and I'll be your host for this afternoon. We are here to consider building Vietnam's next urban growth centres and delighted to say that this session is sponsored by Vinhomes as well who've also been supporting the conference as a whole and I thank them very much for that support. So a couple of questions to keep in mind as we go through this conversation. Can urban development do more than just house growth? Can it become the infrastructure that drives it? As Vietnam enters a new urban growth cycle, the stakes extended are far beyond real estate. This discussion explores how large-scale integrated developments can create jobs, unlock commerce and services, attract long-term capital and form resilient new economic poles. I'm delighted to say that we're joined by Ms. Hang, who's the CEO of Vinhomes, who will be examining the execution, investment and multi-sector partnerships needed to bring homes, workplaces, mobility, social infrastructure and nature together into durable urban ecosystems. We're also joined by Jean-Paul De La Fonte. JP, Director of the New Seven Wonders Foundation, and Dr. Antoine Le, Chief Executive Officer of Dragon Capital. Our panel will consider what makes a genuinely future-ready city, globally competitive, climate resilient and regenerative, while delivering greater opportunity and quality of life for generations to come. If I could invite my panel to join me on stage, thank you very much. And please do join me in welcoming the panel. Wonderful. Thank you very much. So, look, we've got about 30 minutes or so for our discussion. We'll be here on stage, but very happy to take questions and comments from the audience as we move towards the end of the discussion. So if these questions come up, do marshal your thoughts, and we'll bring them into the discussion. Okay, sorry, let me get my... Okay, so let me come to you, Ms. Hang. I'd like to start with you. Perhaps you could share your vision on how Vinhomes approaches the development of new cities as engines of economic growth. And for anybody who was in the main stage earlier on, we recently heard from Alex, the CFO, but very much thinking about Vinhomes in a regional context. I'd like to bring the focus on to Vietnam. Sure. Thank you, Andy. Good. Afternoon, everyone, is it? Afternoon, yep, yep, we're there. Well, actually, Vinhomes, we started our, what we call the residential ring estates development about two decades ago, and we evolved during that history. We started with some residential buildings, then we moved into the all-in-one, our 15-minute township, and now we are moving towards what we call the city's model. Hold on. So, our vision is just what Andy mentioned, we want to build the future-ready cities, where the cities that we build would be one of the growth engines for the country. So previously we built our township depending on the planning of the government, the infrastructures, the amenities, but now we are building the city itself. The size or the scale that we are building, we are now looking at 1,000 hectares. per township or even coming to 5,000 or nearly 10,000 hectares, so the scale speaks for itself, right? It can actually become the city in some definitions. So what is the future-ready cities? The future-ready cities are being designed around three columns. The first one definitely will be very human-centric because at the end of the day, we want to be in the city where the people want to live in. So, So for Vinhomes, we are very happy because we have other sisters and brothers within the Vingroup ecosystem. So, So during our planning, we understand that the customers want to feel safe. Convenient, well served. The children can go to school. Their families are being taken care of in terms of medical aspect. So we pretty much we being all in one. So the amenities, the houses, the bus, the infrastructures, the school, the medicals are all being built within one reach. So you can see that the city is not only for people to live, but they can actually walk. And also that the service and the business can grow within our cities as well. So that's why we're saying that our future ready city is also becoming one of the economic growth engines of the country as well. And especially for Vietnam. Our government is quite different from Singapore, actually. Hopefully, they... They usually, that the real estate developers like us, we have to attract people to move into our urbanization townships. So that's why we understand that the people live in our city, they want to be staying connected as the community. It's the culture of Vietnam, and I believe that Southeast Asia is also the same. So we also want to design our cities being convenient enough for people to stay connected. So not only living as the family, but they can live as the community. They can networking, and even they can find business networkers, business matching, just in the city that they actually live in. So the second column that we are building our future ready city is definitely going to be the technology because you see that with the scale of the city that we are building, a thousand hectares, it's very hard to run it efficiently without the help of the technology. So in Vinhomes, we applied smart home and smart city several years ago, but at quite like just 100 hectares scale of the projects. So we believe that we can make the cities being safer. Run more efficiently and we ensure that the infrastructure will be maintained periodically. So we apply AI surveillance camera. We apply the AI or the face ID access control. So that the people can make sure that only authorized person can enter where they live. And the AI technology also help us to forecast. What is the problem with other electric cities, machines, or with our lift within the buildings? So it actually helps the residents to have a better life experience and also help our property management service to run more efficiently. So that's the second aspect of the Future Ready City that we envision and we are now doing. The last thing, pretty much, that we do, and I think that a lot of you talked about, is about making sure that the city is sustainable. Because when you're building real estates, it's not just for the consumptions of two or five years, right? We have to talk about, like, what about 30 years from now, people still feel convenient enough. to live in the products that we actually develop. So for all of the Vinhomes future ready cities, we take the ESG++ approach. So ESG, we all very familiar, right? It's how we will minimize the impact to the environment. But in Vietnam we are talking about the net zero commitment of the government and so for Vinhomes we also not only just minimizing the impact in the environment but rather we really want to pay back to the environment by we win somehow that nurture and regenerate some part of the environment has been damaged and so that the climate adaptation is very important. Because we don't talk about populations, how the heat is rising, so we want to ensure that when we plan for the cities, the nature is actually taking a very central part of it, along with the human centric and the technology driven. Yes, so in short, the Future Ready City is the cities that Helping the people to have a better quality of life because that's what we pursue. To ensure that all the city can run very efficient, very smoothly and also that the environment are happy to be within our cities. So that's basically what I envision. Excellent, thank you very much for giving that overview. I really like the framing there, human-centric, application of technology, sustainable. Not just sustainable, regenerative as well. Yes, yes. There's a couple of things I'd like to come back to as we get through the conversation, but thanks for giving that overview. Thank you. JP, I'm going to come to you. Thank you. Fascinating what you're doing and the relationship with Vinhomes as well. Perhaps you could take us through New Seven Wonders and that relationship. Thank you, Andy, and I'll add to the good afternoon. Bon appetit. I hope you're enjoying the food. It's delicious. Thank you for the hosting. New 7 Wonders is the official global international organization that organizes voting for wonders. It's a concept that's been around now for over 20 years. We've invited the world to vote. We've created the world's first ever and largest global vote. Over 100 million votes chose the New Seven Wonders of the World. You will know the Taj Mahal, you'll know the Great Wall of China and the other five. I will test you later. Later. And then. And then, of course, the New Seven Wonders of Nature. Why is that relevant? Because one of them is Ha Long Bay here in Vietnam. And these campaigns was never, actually this was never part of our original objective, it created something called the wonder effect. Independent research by multiple independent research outfits have identified the socio-economic impact of all these wonders. Those created socio-economic growth more than twice the average rate compared to what they were growing before. Why? Because our campaigns are grassroots, bottom up, They're not advertising campaigns, they are participation campaigns, just like an election. I think there's another election happening today somewhere in the world, world. hopefully with equally positive outcomes. And this relationship that people have with these campaigns then creates an affinity, an emotional bond with these places, which is why you see such incredible growth. We decided, I decided in fact, I thought what an interesting question to ask the world what they consider to be the seven wonders of future cities. And we started putting together this, and we're also speaking to Vingroup. And the criteria that we have, you may not be surprised to hear, are exactly that. Human-centric, smart city, and the way we define sustainability is growing with nature. I like even the vision of, like, buildings and nature growing at the same time. That's kind of the way it should be, not just ticking the box. They're showing each other. Yeah, so that's kind of interesting. And it's not a coincidence, because the reason it says official participant there is that their flagship project... Which is Vinhomes, known as Vinhomes Green Paradise, an hour and a half drive, now an hour and a half drive, soon 13 minute train ride, because they're building the first one of the two. First, Fast Train Services, Vingroup is, here in Vietnam. The second, the other one, by the way, is to Ha Long Bay. Because once again, the wonder effect has impacted Ha Long Bay in such a way that it's become such an investment magnet. So we're partnering with Vingroup and the other 260 participants now. It's a big competition. Voting has started on Saturday. I invite everybody, by the way, to go to 7wondersfc.com and vote for... Green homes, green paradise. Right, she has to say that. I have to remain neutral. She can say that. All right. And get engaged. And that's really what we do. We engage people in these themes and create economic value as a result. Excellent. Thank you very much. Well, hopefully we've secured another 50 or so votes for the weekend. Dr. Hang, if I could come to you. Thank you. All of this costs money. We're talking about financing. We're talking particularly about financing that growth within Vietnam. This is an area where you sit, and I wonder if you could bring some thought and perspective on whether it's private capital, it's foreign capital, it's PPP, it's working with government and so on, how we get the financing right. Thank you, Andy. I think I'm going to give you a long answer for that. First, you know, we have, I'm going to tell you, the great, the good, the bad and ugly. Okay. The great thing about the capital financing is, you know, how much Vietnam private wealth is not in the banking sector. Probably the highest one in the world. The reason people can argue, you know, all the merchant markets are similar. No, no, we don't have, not similar. We have like 100 years war with the French, 30 years war with the American, and then we have a closed door until 1993. So the trust in the banking sector is low. That explains why my estimation, there's at least 200 billion US dollar of gold under the pillow. My mom tell me where she hide her gold, you know. This is important, in the house, you know, for example. And not only the gold, the dollar. The dollar cash. You know, in the last many years, Vietnam error mission, meaning when you do the accounting for the nation, there is like a big chunk of the money. It's not recorded. Got it. Last year, 33 billion US dollar. A year before, 32 billion US dollar. So where's the dollar? Some probably sitting outside Vietnam, but some under the pillow. That's another 150 billion US dollar not in the banking sector. So the hidden wealth, which you don't observe it. It's massive in Vietnam. Massive. That's number one. That's great. The good is, you look at the real economy, and that's the paradox too. The FDI. Oh my god, it keeps coming in. I'm surprised myself. I've been wrong on this five years. I call it a stop already. And now, this year, $50 billion commitment, $20-plus billion disbursed capital. Can you find any country in the world? Have more than 5% GDP from disbursed capital FDI. None. This country have every year. That's the good. That's the real economy. And that part of that capital actually go to property. And I'm going to tell you in a second. The bad is, look at the equity market. $5 billion outflow this year. And not only this year. The ugly is they have been outflow for five years already. That's ugly. So come back to your question, where's the finance coming in? That depends on the scale of the developer, the reputation, the standard. The biggest difference is right now compared to 10, 15 years ago. 15 years ago, every houses, every small city you have developer. And now the market more consolidated. It become a bit more oligopoly structure. That's good, not bad, not bad, not bad, that's good, not bad. Meaning before, when the small developer need finance, they have three source only. Own capital, the bank, and the buyer. But if you are a big developer, there could be actually four sources of capital. The longer-term capital, which is like the big developer from Japan, from Singapore, they buy a big chunk of your project, and that is a sort of finance and a beginning for you. And then probably you do 30% from your own capital, 30% from bank, and probably about 30% from advance payment from customer. So that's a sort of financing. The grade explains why the 30% is massive. Yeah. Yeah. Do I answer your question? Yeah, thank you very much. And it raises another question just to quickly keep on financing because in some of the panels earlier on, we've been hearing about the massive inflow of foreign direct investment, the massive investment needed in infrastructure in general, in energy, in ports, connectivity, and so on. To some degree, you'll need to compete for that capital as well. So I wonder if you could just think about how you position your developments as attractive for investors and finance them. Yeah, I agree that infrastructure is kind of a very hot word right now in Vietnam. And of course, Vinhomes, we are also one of the big supporters for that. I think if you read in the newspapers, then Vinhomes is one of the contractors for the Metro lines. For the Hanoi People's Committee, and also that VinSpeed is one of our members of the group, has also invested their own two SuperSpeed railways. One is connecting Can Gio or Vinhomes Green Paradise to Ben Thanh, which is the CBD of a major city, and the other is connecting from the Co Loa, which is the VAC it's on, to Ha Long Bay. So basically, we understand that urbanization and infrastructure pretty much has to go together, in a sense, because you cannot be in a city while being isolated. People need to stay connected, and we make sure that infrastructures will make the distance become no issue at all. For example, previously we don't think of like you can work in Hanoi and live in Halong Bay because it takes too much time to travel. But if the distance can be only 15 minutes or half an hour travel, then it is possible. So we think that infrastructures have a very important part in playing to reshaping. Reshaping the physical geography, it makes you not feeling like it's quite a distance anymore. So for Vinhomes, we go both the two directions. One is for infrastructures, we do the construction side. For the urbanizations or the what I call the future Breathable City, we ensure that it has to stay very much connected to the infrastructure planning and we ensure that the metros, the super speed railway, will be one of the key factors to make sure that our people can feel very connected, Convenient and very It's easy for them to travel from home to work and work to home. Maybe just to follow up on that as well, because one of the, I think, features of yourselves is your execution capabilities and that broader Vingroup you can sort of marshal together when it comes to mobility, when it comes to all the other aspects of these very liveable urban... Could you talk a little bit about how... Working within a group with other parts of Vingroup is a competitive advantage for you. Well, our ecosystem and execution capabilities is actually one of the advantages of Vinhomes because, well, I'm proud to say that there's no other ring estate developers in Vietnam which are being backed by the ecosystem like Vinhomes because, like I shared before, when we developed the city model, In order to build the city, we need a lot of amenities, not only the residential housing. We need office, we need shopping mall, we need hospitals, we need schools, we even need other like golf course, hotels, theme park. We all have that in-house. So actually we can work together from the very first stage of planning. It's one of the execution capability and the advantage that we have. So that's why when we do at a scale like a thousand hectare projects, we can call all of the members of the group to contribute into the planning. And we ensure that when we execute that planning, we have enough capabilities in-house. So we don't have to rely on other third parties, whether they will open a school. So speed and cost is... Speed is quicker, cost is... Yeah, and it's actually the other way around. For cost, it's more efficient when you can get the planning right in the beginning. And we ensure that all the amenities actually can... Open in pretty much the same time. So if if you observe in the Vinhomes cities Usually when the people come to live then the school will be open already All the hospital or the medical service definitely will have to be ready already So we don't like let the people to live there for three and five years and then we open for school Yeah, so that's what we're trying to do. Can I make a comment on this? Please yeah, go ahead Now Vinhomes has been basically expanded to the south. If I'm not mistaken, 2014 the first project in Central Park, right? Yeah, 13. Yeah, so it's 12 years and this is the first time I bought Vinhomes unit. First time after 12 years. House, house. At the market price, by the way. Ha ha ha ha! First time. You should have believed us and buy it from us. It's tough. The reason is... You know, you look at the property market, there is probably four cycles of it. Number one, the first cycle probably 30 years on Vietnam because of bicycle property market. So you take a CBD and then you take a bicycle, half an hour bicycle, that's called CBD, right? And then you go to the motorcycle market, which is probably about 15, 20 years ago. And then you go to the car market. Then you go to the metro or bullet train market. I think what Vingroup did and why I bought the unit in Can Giờ project, by the way, to be specific, is because of the metro project. In this one? It's because of the metro project. Because of what they promised, is 15 to 20 minutes from Can Giờ to the center of Ho Chi Minh City. I stay in D2 right now, which is a popular town, town home. But it took me 25 to 40 minutes to get to the center. So if this one deliver me 18 to 20 minutes, that's why I'm one of it. So infrastructure is key, guys, key. Well, there's a professional investor. You should listen up. Yeah, because there's something that they're a fantastically successful VinGroup and also naturally modest. Because I look at it from a worldwide perspective. We've got over 260 participants from all around the world. This model of ecosystem does not exist anywhere else in the world. Full stop. So it's something quite unique. And what's really exciting, I think, for them as a group, is they're going to take this to other countries. But we're based, our corporate headquarters is in Dubai. I go around the world all the time. You see lots of fantastic development. Dubai is awesome. But is there a place that has a university, a school, a hospital? No, it's just the real estate or the mall. It looks great, some fantastic architecture. But it's not really thinking about the whole thing, how people live. And that's really also where we come from it, because we're asking people to give their view on this. So it's really interesting. So I think you guys need to be a bit more... I'm a bit more proud of what you've achieved. I'm proud, yeah. Well, I was going to ask you, as you travel around the world, what sort of learnings can come into Vietnam? But you've already answered that. I would say it's the other way around. The other way around, yeah. It's the other way around. Indeed. You know, I literally, when I talk to other people, I talk about all the participants, but when I talk about this one to other people, they're quite astounded. They still need to learn that. And I think now, with the way the group is expanding internationally, I like to call it a Trojan horse, but in a nice way. I'm looking at Alex, because he's always got an eye on me. Which is Green Ascent, my taxi company. I mean, it's fantastic. But what a great way of rolling out around the world. And Vinhomes is going along with that. It's going to be very successful. We are sort of coming towards time. We want to leave some time for some proper networking and building relationships and partnerships. Anybody have a quick question that you want to pose? If not, I'm going to... I've got a couple more to squeeze in. Okay, well, we will have plenty of time for individual conversations. But hearing all of this, hearing about that asset that you have, this model that you've built, we've been focusing on Vietnam. But does this encourage you to take the model elsewhere? And if so, where? Where would you like to go? Actually, this question should be asked to Alex. Yes. Well, yes, we have two decades of successful real estate development in Vietnam. And definitely we've been thinking of going global. But the reason that we are going global is not just for Vinhomes itself, rather we want to go global with the group, with the ecosystems. Because the main purpose of Vinhomes, like I said, is not just purely sell homes. Of course, we have to make profit because at the end of the day, we're still doing business. But we want to make the vision of the founder where he wants to create a better quality of life for people. So previously, our slogan is... It's, um... The quality of life for Vietnamese. But now we change it to the quality of life for people, which means that definitely we will go beyond Vietnam. Excellent. So currently we do study several projects overseas, but like I said, it's not going to be Vinhomes alone, but we will go with other members of the group. I think you might be familiar with Vinfast, maybe familiar with... Green SM, the taxi company, and we're also working with Vinschool, one of our education providers, and Vinmec, the medical centers as well, to ensure that if we go, we will go as a group. And we will Export the ecosystem model that we have learned or we have been quite successful employed in Vietnam to go regional and then global. So to short answer it, yes, we do think of going global, but it will be the ecosystem export rather than just Vinhomes alone. Well, fantastic. I wish you every success in doing that as well from what I picked up from this conversation, particularly that focus on the human-centric, the sustainable nature, the interaction with nature as well. These are all great things to explore. And then, of course, because the people and the environment will be different. So... We will have to adapt to it, it's just like only the model of Vietnam, we don't have to adapt to the lifestyles of the people where we want to bring in and then the environment surrounding it. Excellent. Okay. Thank you. Unfortunately, we're out of time, but everybody is here. We've still got another 30 minutes or so before we start back on the main stage. I would encourage you to come up and say hello to these fascinating people. Please join me in thanking them for their input today. Thank you very much. Thank you. And now you can go back to lunch. Thank you very much. Thank you. Thank you, Andy. Thank you. Thank you.