Please note: This transcript has been automatically generated by AI and may contain errors.

06:14
Mark Dickens
All right. I think we are ready to rock and roll here. So thank you all for attending. I'm excited to have you guys here for the key considerations in real estate and construction projects. We've got three experts with us here in the call today. David, Olive and Alex, who you'll get to know more shortly. They're all going to run you over a few different areas in terms of legal, the market sentiment coming from commercial real estate as well as insurance. My name is Mark Dickens. I am the host for today and I am representing Tencent Pacific, a broker here in Vietnam who has three core focuses on the personal insurance side, health, life and travel. Under Tenzing Pacific, the main brand, EB Asia and GI Asia are our business lines which are tailored towards group benefits as well as general insurance for businesses.

07:03
Mark Dickens
So property liability. So we work quite closely with Baobin in terms of your hosts or your speakers for the day and our experts that are coming in. As I mentioned, we have David, Olive and Alex. David is the Chief Executive Officer at Avis and Young. He's practiced commercial real estate for almost 20 years now over Southeast Asia. He's currently holding the CEO position at Avison Young in Vietnam as well as Cambodia and David manages operational aspects of the company along with setting the strategic vision and goals. Maintains a portfolio of rich and major or portfolio of major clients through high level of service, attention to detail and consulting expertise. David previously held the positions at Colliers Vietnam as CEO and Deputy General Director and Chief Information Officer and Property Director for Asset Services and Sales Director.

08:01
Mark Dickens
Alice or Alex is a partner and head of litigation and dispute resolution, real estate and construction at Indochin Council. He leads the litigation and dispute resolution across those departments with extensive experience in real estate and construction, dispute resolution and arbitration. He also advises on mergers acquisitions, joint ventures, international commerce and corporate matters and practice spans both domestically and internationally. He's also listed arbitrator at the Vietnam Traders Arbitration center and a member of the Chartered Institute of Arbitrators. Before joining Indochine Council he served as an in house counsel for major property developers and construction firms gaining industry insights and experience in complex legal issues. So this background has given him an in depth industry knowledge which he's here to share with us today. Last but Certainly not least is Olive, joining us from Bao Minh.

09:01
Mark Dickens
She's their head of business development and comes with over five years of experience in the non life insurance sector. She has a very strong background insurance operations and specializes in strategic planning, risk management and developing key partnerships. Olive also focuses on providing tailored insurance solutions to address the needs of commercial real estate developers, investors and property owners, helping them navigate and drive business growth. So excited to have all three of them here today and I think we are ready to kick things off with our first speaker which is Dave, who's going to cover a range of topics. So Dave is going to cover market trends and opportunities. So he's going to talk about some of the demand shifts in the market, leasing rates, investment hotspots, key considerations for tenants and investors, as well as how to navigate some market uncertainty.

09:55
Mark Dickens
So that's going to include economic conditions, interest rates and really how they'll impact real estate decisions. So with that being said, I'm excited to welcome Dave and yeah, I'm looking forward to his presentation today.

10:10
David Jackson
Lovely Mark, look, thank you so much. I really appreciate tensing putting this together. It's great to be in discussion and talk with people that are interested about real estate and the marketing opportunities they are here and great to be with some fellow professionals as well. Really, really nice to be talking with Indochine Council and Alex and also Oliver Bin. Often real estate gets talked about as an asset, but really there's lots of asset classes that people can invest in, whether publicly or privately, whether it be gold or securities or real estate or other things. So it's good to have people from different backgrounds to maybe shed some light on what the opportunities might be. So I really appreciate that. Thank you for the time and for anybody joining us today. Also thank you for the time. I appreciate everyone's very busy.

11:01
David Jackson
We're in the middle of the week, we're just after lunch. So thanks very much for joining the call. For me, just as a bit of background, as Mark mentioned, I've been operating in Asia for quite some time. I have a diverse set of clients. We have a company here of about 100 individuals that consult across every market sector in real estate from identifying the land to valuing the land to developing the land to construction, build selling the land. So we're basically involved in every aspect of property and real estate. Today though, just because of the topic of the conversation, key considerations in real estate and construction projects. I'm just going to do a very high level discussion in terms of the region.

11:48
David Jackson
First of all, why the ASEAN region is something that globally people are looking at and in particular for investment and return on investment. Then I'm also going touch on Vietnam. I know lots of people on the call are obviously very familiar with Vietnam, but I'm just going to go on a high level demographics and also the legal structure really to key up for Alex later on at Indigenous Council. But realize why these things about demographics and the law structure really determine about what you're going to invest in real estate. I think if there's any questions you can raise your hand. I think Mark, at the end of this call we'll go through a Q A with everyone you know and open to discussing any part of real estate assets. So I'm looking forward to it.

12:37
David Jackson
Thanks very much for the time and I'm going to share my screen now. So if you bear with me for a few minutes, I'll just share my screen and then we'll start the presentation and I look forward to having questions later, so bear with me.

12:49
Mark Dickens
And yeah, Dave's doing that. As he mentioned, if you guys have questions throughout, just put them in the chat. There was a series of questions that came in through registration so there's already a good number of questions to answer afterwards. But if you have any or think of them throughout the presentation, just drop them in the chat.

13:06
David Jackson
So I'm hopeful that you can see my title screen here. Vietnam Real Estate Outlook prepared by Avison Young. Just for those that don't know Avison Young, we're the only ones in Southeast Asia at the moment, but as Mark mentioned before, you know, I've been here operating regionally under Colliers International for some time. We changed Abson Young 2 years ago because they're very much focused on the Asia Pacific market as opposed to lots of the other consultants that are focused, you know, in terms of their more secure markets like Hong Kong, you know, or you know, Europe or America. And I'll just discuss. And that's the base, basically a good way to start the presentation. So basically over the next 20 minutes or so I'm going to talk a bit about Asia Pacific at a glance.

13:56
David Jackson
I won't spend too much time on that but basically to show why people around the world after Covid are looking at Asia Pacific in particular for investment and return on investment and then followed by, you know, moving on to Vietnam where obviously the focus is on at the moment and why Vietnam might be even one of the best opportunities for real estate, you know, and construction projects and foreign direct investment and then just moving on to a brief touch on some of the markets and to give a few key takeaways in the contents. Here we've got about Avis and Young and also appendix on our services. But basically I won't go into those, I won't spend time because time is precious.

14:39
David Jackson
But the presentation I guess will be available to anyone after this talk if they want to find any further details along with our contact details. So firstly moving ahead, Asia Pacific at a glance. Well, look, the key things on that is the ASEAN region, Vietnam out of this has massive appeal in attracting foreign investment to various industries and real estate across key beneficiaries. Now the first thing to discuss is just where are we at in terms of the world? You know, we are in a very difficult time at the moment. We still have had the COVID years and the world has not been immune to the global pandemic and the money spent on that.

15:22
David Jackson
And basically along with wars that are happening at the moment, along with last year was an election super year around the world, you know, with I think it's like 60 or 70% of the demographic countries going up for elections. And so there's disruption with that. There's a movement from global business around the world, there's an increase of technology. All of these things affect investor confidence and the markets have slowed down as a result. Now, if you're looking at regionally around the world, you know, markets like the USA obviously the last four years have been quite a difficult time for the States and the elections with Trump coming in have started to push movement but affecting investor confidence. Talking about trade in Europe, things are also very difficult. They're worried about the war in Russia and the ability, you know, globally.

16:27
David Jackson
Basically people are unsure about what the future has. And if people are unsure about the investment, one of the things that they do is rather than have more volatile investment like stocks and shares, they move into real estate assets that are in some cases physically there. They can touch and feel these buildings that they have intrinsic value as land is a scarce resource. Now what you can see here is GDP growth. Now what a lot of the people are doing is that they need return on investment. Real estate is not liquid. It means that the transactions of which take a lot of paperwork and time. But people are seeing where markets have plateaued or declined, such as the residential market in America or property in the UK in certain areas have slowed down.

17:20
David Jackson
People are looking to invest in assets where they can get a good return on investment, you know, or. And they're looking at more perceived Riskier markets that they maybe would not have invested in before now. One of these is Asia Pacific. Basically those that are looking to get a good return on investment that they might not have considered before. I'm talking about the big funds or even personal managed money are now starting to look to Asia for opportunities that have been underutilized. So a lot of these funds are looking into Asia for their growth and to pull them out of these travel times. So you can see this in some of the newspapers that are around at the moment.

18:03
David Jackson
A lot of people are looking at Asia in particular Indonesia, in particular Vietnam, where there's good language, a good structure and good demographics that I'll go into. Apologies for moving fast, I've only got 20 minutes. So you know what are people interested in? Well, the first one's industrial and logistics. You know, we're doing a lot of work as a company up by the Chinese border. People are contingency planning by buying land, worried or concerned about maybe Trump's influence on economic trade with China. So we're doing a lot of industrial logistics. Also the demographics Here, you know, 100 million people, increased rising middle class and expenditure, which I'll talk about in a minute, also mean that people want to be base their factories here.

18:51
David Jackson
It doesn't mean that people are manufacturing here, it means that the components are still done in China, they're shipped over here, they're put together over here. Companies like Foxconn, you know, even Lego that are over here, Samsung in particular, they're putting the components together and then shipping it out of Vietnam. Office market is quite simple. Again there's a high demand there, residential, more growth, hotel and resorts issues and retail. So I'll touch on all these. But really people are looking at Asia because their current markets abroad are stagnant or declining now. So what bracely means, why is Asian high growth potential market? Well, I guess the first thing to talk about is the regional issues. Basically land here is one party, one state owned by the Socialist Republic of Vietnam.

19:45
David Jackson
And the land here is given on a 50 year LURC or land use rights certificate of which there's two documents, basically a red and pink book. The red book is the land and the pink books what you build on the land and they get issued out to the people here for a 50 year land use. Right. Obviously in Thailand it's not the government, it's the king that owns the land. You know, in the UK it's the queen that owns the land. But there are issues. Indonesia, while having massive growth, has Some political unrest. Cambodia also has some issues with Chinese infrastructure and development. And again, Trump came out last week putting restrictions on travel and trade for Cambodian nationals.

20:26
David Jackson
Thailand, the king came out a couple of years ago saying that he didn't want foreign people building, you know, factories and stuff in there as well. Myamar Minamar, Burma they also have political instability. So Vietnam, right next to China, right next to the mainland, right next to coastal ports, physically speaking, is a very attractive market to go in just because of its location. It's stabilized growth and it's stabilized structure. In addition, which I'll talk about later, basically is Vietnam's policies as well the government are doing to increase FDI trade. Now, if you look in the region, you basically see that United States, China, Hong Kong, Japan, Korea, essence are investing into asean. The main thing is the biggest investors combined are the ones that are based in Asia, investing in Asia. Most funds in America and Europe are underutilized over here.

21:27
David Jackson
And now they're reaching out to kind of see how they can develop and make sure that they get good properties and investment. In addition, one of the things to look at is that Vietnam, basically, because of the way they handled Covid, the way they handled the structure, they have been told in the press that they are the rising star of the ASEAN region. You can see this by the fact that they are not only to some reports, still nominated as frontier market, classified as a frontier market, but it's slowly growing into an emerging market. In fact, once that happens, it means more funds can invest here, there's more money invested here. It has grown and stabilized growth year on year growth for a number of years now.

22:19
David Jackson
So directing yourself just to the 2023 FDI net inflow, foreign direct net inflow, you can see that Vietnam at the end there has 18.5% in terms of growth. Now, when you put this in perspective, basically foreign direct investment is improving year on year, but it's got a low baseline to it in terms of what it's investing in. But people want to invest in the third largest and third most populous country in Southeast Asia. This is the fourth largest growing population in the world. People want to be based here to do that. Now, ABC in comparison to Singapore, 175, you know, or basically Indonesia, 2020, US$22 billion. You can see basically the scale of where it's going and what Vietnam is going. Just to direct you, for those people that have been here a long time, to the inflation rate as well, 2.94%.

23:15
David Jackson
The Vietnamese are very Good. Since those people have been here since 2008 on controlling inflation, they want the people to have more money to develop and spend. In comparison, as you see Laos 15.5%. So when you look at the FDI inflows, you look at the inflation rate and then you look at the population down the bottom, you can see that it's a very good place and why it's been called the rising Star. Now the, one of the reasons that it's grown so quickly, especially after Covid, it was the third largest after Covid to develop after the Middle East. A lot of people go to Dubai and also parts of Europe where people were growing. It opened its borders quickly after Covid.

24:03
David Jackson
And I guess the one thing to talk about in terms of fdi, which I'll talk about on the next slide is who's actually investing. Obviously those people that have been here. You can see a lot of industrial development going on. You've got Samsung as I mentioned, Lego, you got Foxconn. Basically it's tech industries that are on the growth here. Vietnam is 24 hours around the world from San Francisco. So a lot of the games that are for your phone are also developed over here. If you look at the top 10 on your phones at the moment, five of which are probably Vinnie Games or Game Loft that are in the world are made here. Again, 65% of the population is under 35. You know, in terms of the last consensus, which is some time ago, so maybe that's a little bit different now.

24:53
David Jackson
Who are the biggest investors? Well, as I said into Vietnam, basically if you look at reports it changes each year between Japan and South Korea. At the moment it's Japan mainly investing on infrastructure and roads. South Korea is a bit stagnant because of their property market and economic station status at the moment. The third biggest, if you look at the Vietnam statistics reports is Singapore. But in effect if you look at it, that might be a lot of Chinese money going through Singapore, you know, into here. So it depends where the money is. But the main thing is a country overview. It's a middle income country that's war torn not so long ago, 1976 is when land started trading here. So not barely just 50 years or four decades and it's on a massive growth. So what are the key regions here?

25:45
David Jackson
Well, the first thing to talk about obviously for those that have been here a while is Hanoi, obviously the political capital, Ho Chi Minh City or previously known as Saigon, obviously the economic heartland and Da Nang, which most People would say was where the country was divided during the American war, not the Vietnamese war. Actually at the moment, if you're looking industrial and development near Hanoi, this is an fdi. In recent years a lot of FDI is growing. But where's the investment going? If you look at fdi, most of it is in the north of the UK Projects are getting approval. In the south, projects are under investigation. Da Nang is focused and putting it as an economic heartland. A lot of factories that are going there are looking at 10% tax free for 10 years to attract that trade.

26:35
David Jackson
And more infrastructure and development is happening. The other thing to note is the urbanization rate. Currently it's 36% of the people moving to 50% by 2030, which basically means there'll be more people living in the city over the next five years or so. There's just simply forget all the newspaper articles, forget what you hear. There's just not enough real estate products to meet the demand. Infrastructure needs to be invested in and labor as well as looking at the law and the stability of that. So just looking at this, you know the 46% of the population, 53 million are in working age. They call that the golden age. That means they're producing money. The demographics mean that this will happen for a long period of time, develop the workforce. In addition to that the productivity. Looking at the cost of it.

27:26
David Jackson
For those that are looking at regional basically the cost to hire workers in Vietnam is one third the price cheaper than China. So it's got massive potential in terms of expenditure. So looking at this, the key thing I want to talk about here is that it's one of the 20th fastest growing economies. If you just look at the 2024 snapshot, all of them have year on year positive growth, whether it be consumer price index, imports, exports. The only one that might have a little bit of is the international arrivals at the moment. This is still five times lower than pre Covid at 2019 and also the one. But the tourism expenditure is actually the same because it's been survived by domestic tourist travelers after Covid are moving to see families.

28:15
David Jackson
The issue is it's a lot harder to develop those internal travelers in Vietnam because the domestic Travelers basically spend US$51 a day and last 3.5 days when they see family. International travelers spend US$124 a day and are here for about eight days on average. So you want to increase international travelers. That's still not happening just because of technology. With Skype calls costs and Also people are going to destinations that are easier to travel to, that are less experimental travel. So in terms of the hospitality market, that's changing. But anyway it's positive GDP growth. In fact, it was the only country, Vietnam that had GDP growth coming out. Covid so again, where are we at with Vietnam now? The best thing to look at here is it's connected global trade basically because of its location and its lateral agreements and it's right next to China.

29:10
David Jackson
The two things I want to point out about this is people recording registered capital is projects that are being recorded to development. And FDI realized capital is the money that's coming out. So if you look at this, the disabear disbursement, you'll see that the year on increase is down from dispersed capital. People are not putting money into projects over the last year. If you look at the other slide from 9:10, it means that people are registering the money. So people are actively putting money into this. It's just taking a long time for the paperwork and the effects to knock on. Which basically is to do with the decree legal system here and also the changes in the political situation over the last couple of years. The transport system. One of the things that people look at here is Vietnam.

29:56
David Jackson
It needs to develop its infrastructure. We are developing more deep water ports, we are developing more roads. The government has incentives for private public partnerships which are opening up regions. The more opening up regions you get land prices go up because they're easily accessible and people make success in their properties. One of the things to look at here in Vietnam, although they're not utilized, has in their country landmass more ability for airports that have international travel. Because the Americans built these, you know, long tracks for their bombers during the American war here. So they have the ability to grow. They're doing at the moment, they just need the finance. And that's why we talk about infrastructure projects.

30:39
David Jackson
These ring roads are coming in Hanoi and Ho Chi Minh City that are pulling away people because they realize that the urbanization is happening so quick that these areas around that are becoming more accessible are good places to invest and develop residential projects or buy land or buy retail in terms of what they're doing. Basically the government here has land plans for lots of different things. If you follow these, it's a good avenue to success in terms of projects. So where we are quickly, look, real estate is one of the most attractive sectors M and a basis 2015 here, decree law of enterprise meant that pre2015 you needed a joint Venture with a local partner to business over here.

31:21
David Jackson
Since then the enterprise has changed and so people are looking at coming in and buying mergers and acquisitions with local parties that understand the law, understand the structure, understand the landscape here rather than coming independently. So they're looking at real estate to do that. And often you'll see companies like Mapletree working with local partners or developers here in terms of to put real estate deals and move ahead where they need the local experience. This is why calls like this is quite good because you've got three other consultants on here that have been here a long time and you definitely need to have consulting advice to enter into the real estate market. So these are some of the notable real estate transactions here. I won't go too much of them. Just pointing out that there are a lot of industrial transactions here and development transactions.

32:11
David Jackson
So the industrial real estate market, well the first thing to realize because it's the economic heartland in Vietnam, a lot of the industrial parks are based in the south. In fact, I think it's about one third of all the industrial parks are based in the south. And a lot of them are key marks as well to be developed in the future. We've got a lot of industrial real estate markets and enterprise zones in the north at the moment planned and underway near Hanoi and around the borders between China. Also industrial real estate, we're seeing a rise of people. When we consult to a lot of companies, they're looking at changing the industrial products that they got. Basically if you're Adidas or if you're Nike, you want green building in your supply chain and wellness certification.

33:00
David Jackson
So we're doing a lot on site selection, location and also wellness and developing them. In terms of the sectors to watch, you're looking at data centers, cold storage, ready built factories and warehousing. So where we got is an opportunity. Housing is basically under supplied, urbanization is happening, prices are rising up. You know, the average property price here culturally has changed. We are moving from a townhouse with three generations in it to apartment living. The cost of prices going up per square meter, year on year. Developments that are earmarked and have good facilities, are commanding good values and the rates are happening just because and it needs to build more. There is a problem in the residential real estate market where everything is high end or marketed at high end or mid end. Nothing is really in the affordable sector.

33:51
David Jackson
You know, in terms of the products, mid range need to have competitive advantage. For example, a lot of products by Novoland that are similar to Vincom. So there Needs to be diversification on market. But there's good potential here for development. Retail massively problems during the world. Covid's changed everything. The way that people buy the old retail shopping mall of perfume counter on the lower floor, fashion toys and then, and then a cinema or whatever, pulling or food court at the top are kind of done. People are looking at going to shops, experiencing the product and then buying online. You can see this by the amount of people that are doing E commerce picking up stuff from office buildings. We're coming to the end of our presentation now in a minute.

34:39
David Jackson
I'm just seeing my time, but just the office market again we're looking at people. There's a growth here for, you know, good values and wellness in buildings that are done and done well. The issue here, grade A, grade B. You hear all this kind of supply in Vietnam there's no government grading. So it's down to the broker on what they classify as grade A and grade B realistically. For example, in Ho Chi Minh City there's probably two grade A buildings. That's Deutsches House where I'm talking from you today and Saigon Center Phase 2. If you compare those two office buildings to other markets like Hong Kong where there's 210 grade A buildings, basically it's massively under supplied at the moment.

35:22
David Jackson
And there is a need for good developed properties that can command security and rents for international tenants that are moving here to take advantage of the good products ahead. So here's a quick overview of some of the investment opportunities and happy to take questions on them later on. Industrial and logistics. There's a shift in terms of management and location. And there's also a shift in terms of green building and construction. Residential, there's a movement from townhouse to apartment living. There needs to be more on social or affordable housing. There's limited student or senior housing facilities available. Massive opportunities there again, office and retail. Retail needs to change to be either a place where you go for food and beverage innovation or looking at the products, technology and selling them and growth of omni channels if people know them. And E commerce.

36:23
David Jackson
Office, again massively under supply. Good return on investment, stabilized growth. Healthcare is another growing opportunity with a rising population. There's basically needs to be more hospitals, more training facilities. There needs to be more based hospital care to the community care. At the moment there's not a connection between them. Hotels and resorts again massively need to improve on the infrastructure, the locations of how you move to the coastal resorts, how you develop them. The ease of Travel with them, the touch points in customers. After Covid there is basically a limited supply of branding and branded residences and that's going to be helped by the next slide, the final slide, which is basically the housing laws. There's lots of laws coming into place that maybe we'll talk about later.

37:12
David Jackson
But basically these are to make sure that there's more supply of affordable social housing, to make sure that the transactions are safety more transparent for the buyers, to increase purchaser confidence and make sure that things like the laws coming up with shareholders rights and timeshares that they're covered in terms of ownership structure. So the government is basically making this a country to invest in. They want investment, they want it now. And so these are the key takeaways. Vietnam is alluring because of its people for investment. Mid to long term people are moving away the other markets and into Vietnam. There is a huge high demand. We have a massive demand for people going in here. When is the time to invest? The time is now to invest, but just do it clever and do it with good consulting advice.

38:01
David Jackson
People are looking now at good green building office buildings and structures here with electricity prices growing up around the world, you know, if you have a well defined and built building that's saving on long term costing, it's better for the consumer legal effects. The government wants foreign investor, they want transparency. You can see this in the way that they're developing now. You can see this with Tolam, the way he's changing the government and he's merging stuff and improving the efficiencies basically to make sure it's a safe investment regionally. This also helps because they are changing rapidly. They've got stabilized growth and they're making it easier to invest. And so you know ESG as well, massively on the rise. Before when you look at developers or investors, their biggest criteria will be return investment. But now actually it's social responsibility, care, location and reputational risk.

38:59
David Jackson
So that's the end of my talk. Sorry, it's very quick. If everyone wants to know about Abson Young or anything like that, please feel free to ask. I'm going to turn back to Mark now. I'm going to stop sharing my screen and thank you very much for the time and thank you very much for listening to me. Thank you.

39:17
Mark Dickens
Thank you, David. I think that was very insightful. I'm sure there's going to be lots of questions for you afterwards, especially on the esg. That was one thing that came to my mind throughout the presentation and I want to say that you strategically planned that presentation, so it was a nice segue into Alex with your last slide being about some of the laws in Vietnam. So Alex, feel free to share your screen. Excited to have you on Alex is going touch on the legal framework in Vietnam as well as how to mitigate some of your risk talk, contracts, negotiation, best practices, dispute resolution and a handful of other things. So I'm happy to pass it over to Alex to start his presentation.

39:56
Tuấn Phạm Việt
So thank you Mark and David. So and good afternoon everyone. I will be discussing a topic that many individuals and business faces in Vietnam and it is how to navigate legal risk in property transaction for buyers in Vietnam. I totally agree with David that Vietnam has the attracting real estate market to foreign investor. However, the legal framework governing the property transactions in Vietnam is quite complex with many potential risks that could lead to financial loss or legal disputes. So as a buyer or an investor, understand the risk and know how to mitigate them. Good beneficial your business to ensure a safe and secure transactions. In this talk I will highlight key risks that the buyer may face such as the issue related to land use rights, foreign ownership restriction, contract performance and regulatory compliance.

41:10
Tuấn Phạm Việt
I will also provide practical guidance on how to navigate these challenges. And before we go to the details, I want to make it clear that this talk is not legal advice and only for experience sharing purpose only. So if you need legal advice to your situation, I recommend you to consult with a lawyer or qualified professional attorney. And so next slide please. So as you can see on the slide it shows the key laws and all the relevant regulations that play a crucial role in the property transactions. The P laws that directly regulate the real estate transaction in Vietnam include the Civil Court, the Land Law, the Law on real estate business and Housing law and this law together provide the fundamental legal principle for contracts, ownership rights and obligation for property transactions.

42:17
Tuấn Phạm Việt
In particular, the civil Court provides general regulation on contracts, contractual rights and obligation of the parties, the ownership of the property, the landlord regulates the ownership rights related to the property like the land use right, the rights and obligation of the land user including companies and individual the law on real estate business govern the real estate trading and business operation within the property sector and the rights and obligation of the property developers and the housing. Now housing law regulates the ownership, development and management of housing such as the area social housing, the foreign ownership related to houses and apartment and beside these main law there are several other legal frameworks. It include the law on Enterprise, the investment law, the construction law, the marriage family law and other laws.

43:27
Tuấn Phạm Việt
For example, the Civil Procedure Code regulates The still resolution, the law on enterprises provide company laws. The investment law regulates foreign and domestic investment in the real estate sector. The family law stipulates property ownership within family and marriage relation. So to sum up, depending on specific performance. Sorry, specific circumstances of the transaction, Many laws in Vietnam might involve the transaction between the parties. Next slide please. And when we talk about real estate transaction in Vietnam, the scope is actually very broad. It can cover various types of transactions such as purchase, lease, purchase, subleasing, both short term or long term lease. So the types of real estate in the transaction are also diverse. So they can include commercial housing, shop, house, apartments, luxury factory, existing building and even future property assets.

44:47
Tuấn Phạm Việt
And on top of that there are all the type of real estate related transaction such as business, corporation agreements and capital contribution using real estate and property. However, because our time is limited, so I will only focus on purchase and repurchase and of residential properties like houses and apartments, long term leases between buyers and developer or secondary sellers, including off brand property and sublease or transfer of land just right and factory or ready to use property between corporate or infrastructure developer and sellers or leases industrial zones. Next slide please. So the slide before. So who can be considered a buyer of the legisl? Basically there are two main groups, individuals and legal entities. The first is individual or persons including both locals and foreigners or non Vietnamese citizens.

46:13
Tuấn Phạm Việt
The second is the legal entity including corporates, company and other kinds of legal entity, but mostly and many companies. And what kind of property of the privilege transactions that we are talking about. They are residential homes, apartments, building and factory. One important point to note that is the property in my discussion does not include poor land or land use dry. Because under Vietnamese law in general, land is owned by the state and individual or business can obtain land use dry by several way. But it depends on the time and the using purposes of the land. Whether it is residential or commercial, agriculture or misused purpose and specific land user. Like individuals, local and foreign companies, each type of land user has their own rights and obligations. So it is a bit complicated with regulation and requires more details. Next slide please.

47:30
Tuấn Phạm Việt
And I assume that most of the audience are working in the real estate sector and some of you are lawyer, legal counsel or consultant in Vietnam. However, in case you are not a lawyer and how do you do and you do not have much expertise or experience related to property transaction. So how do you identify the legal risk when you sign contracts or buy a property? From my view, the easiest and safest ways to do that is to console a lawyer. And as a lawyer Practicing in real estate industry, I noticed that there are several common legal risks that the buyer is trying usually faced in the property transaction. And the first and foremost is about the title and ownership issues. We have the issues of unclear legal status.

48:35
Tuấn Phạm Việt
This happens when property doesn't have an ownership certificate, commonly known as the red book or the land use right certificate or the housing certificate. Or even if there is a certificate, the property information might not be fully updated or recorded in the certificate, which can cause legal complication to the buyers. And another issue is that the property might be involved in a dispute. If a dispute. If a property is subject to legal proceedings or enforcement actions, it can be difficult or even impossible to transfer the ownership until the dispute is resolved. And finally, the property might be pledged or mortgage to a third party or a bank. If a property is used as a collateral assessor or loan or is tied to third party, this can restrict the buyer's ability to have the full ownership rights.

49:47
Tuấn Phạm Việt
And from the legal point of view, understanding the risk before purchasing will help you to avoid firstly the risk related to the ownership and title of the property down the line. Next slide please. And many of the audience might come from different countries and regions like Europe, mainland China, Korea, India or even Taiwan. So the second level is I want to discuss is about the foreign ownership restriction. Under Vietnamese law, foreigners are not allowed to directly buy land or land use dry in Vietnam. However, foreign buyers can purchase or enter into sublease purchase agreements for residential properties within the property projects developed by real estate developer in Vietnam. While land ownership is restricted, foreign buyers can still engage in residential property transaction in certain development and certain area.

51:12
Tuấn Phạm Việt
And under the housing law, foreign individual buyer can own a maximum of 30% of the total apartments in a project or 10% of the total number of houses online in a specific residential area or in the urban area project. And you know, in my practice I have seen many cases where foreign clients purchase land in Vietnam foreign investment to Vietnamese individual or companies registering ownership on paper. But I have to say that this kind of structure is very risky foreigners and also for the foreign company. Next slide please. And another major risk, it relates to the property contract agreement. One of the biggest issue buyers might be is unclear or ambiguous contract language. If a contract isn't written clearly, it can lead to misunderstanding and legal dispute. And one of them is unfavorable contract terms.

52:43
Tuấn Phạm Việt
Some contract might include clauses that overly benefit the developer or the sellers, suggest fraud liability assumptions and put the buyers at disadvantages. Under Vietnamese law, there are formal requirements for a valid Contract. In certain cases, property contracts or agreements must be notarized, such as the sale and purchase of apartments from the previous buyer to subsequent buyers. If a contract is not properly notarized or documented in writing as required by law, or lacks of essential clauses, it might be deemed invalid and enforceable. And another concern for buyers is that payment method and installment schedule might not comply with law. The risk is that making payments for off plan properties think these properties are not yet completed. There's always the possibility of construction delays, project cancellation or even scams or fraud from the developers which the buyer can suffer financial significant financial losses.

54:17
Tuấn Phạm Việt
For some example, some developers might require a deposit or advanced payments that exceed the legal limit. And Vietnamese law regulates that payments in offline property transaction developer are limited to collecting deposit up to 5% of the contract price for the sale or lease purchase of the off plan property. And also the first installment including the deposit must not exceed 30% of the contract price. For lease purchase contract, the total upfront payment before the handover of the property must not exceed 50% of the contract price. Next slide please. And there are also some other key risks that buyers should be aware of. Because before entering the transaction. The first is about the change in law and local regulations. Now, once in a conversation with foreign investor, I was asked about the primary risk of real estate investment in Vietnam.

55:37
Tuấn Phạm Việt
And without hesitation I answered that legal changes as the foremost concern. So as the lawyer, I have witnessed the success of investor bold domestic and foreign in the real estate sector more than any other industry in Vietnam. Both cases also involves the change of the legal regulations. And second, there might be differences in the quality and the size of the property compared to what was written in the contract. This could mean that the actual usable area is smaller than planet in terms off plan property construction. All the materials and finishes does not fit with the agreement. And lastly, the developers might delay the handover of the property. And in some cases even the property is handed over. The quality might not meet the standard agreed in the contract. This issue is from my view is common in Vietnam when purchasing off plan properties.

57:00
Tuấn Phạm Việt
So that's concluding common legal risk for buyers or tenants in the property transaction in Vietnam. And we have discussed the risk. So now we can talk about how buyers can protect themselves before signing the contract. To manage risk easier, you can break it into two main stages. The first is before signing the contract and the second is after signing the contract. There are several ways to do that. The first, the buyer or the leases should conduct legal due diligence on the property this means verifying the ownership, checking for any dispute, ensuring that all necessary permits and approval are in place. Through the duty diligence, we can check the original of the property and how the land use rights certificates were granted. This is important because the land history can create legal problems.

58:10
Tuấn Phạm Việt
In Vietnam, for example, if the land was previously related to land or military property, the transaction could be challenged in court. And in Vietnam because the land registration system isn't fully developed. So conducting legal religion is really important to avoid risk and it is especially true for properties that will have the long history like 20 to 30 years back. Second, you should take your time to focus on the contract grafting. A lot of legal problems happen just because buyer miss certain details or don't clarify key terms before signing. And the third is to negotiate as we usually do. If something in the contract doesn't seem fair, just try to adjust it before signing or closing the deal and the contract should be fair and balanced for both sides. So it is some of the things that you can make from yourself.

59:35
Tuấn Phạm Việt
And lastly is only wanted to get an advice from lawyer or expert. They can help you to avoid the legal troubles and make sure on the rights are protected. And the second part is once the contract is signed, buyers still need to protect their rights during contract performance. If you are buying an off plan property, keep track of the payment schedule and the handover progress. This helps you to catch the potential issue early and deal with the developers before the dispute might turn into a bigger problem. However, if the dispute arise and you first need to consult with your lawyer or your expert advisor before taking any action and whenever possible try to resolve dispute through negotiation or mediation. And from my view handling many cases, it is usually faster and less expensive and even have to maintain a good relationship with both sides.

01:00:55
Tuấn Phạm Việt
But if that doesn't work, you might have to bring the case to court or through arbitration. However, litigation and arbitration should be the last resort for this dispute resolution. So that concludes my main part of the presentation. Next slide please. And just let me take a moment to introduce my firm Indo Chin Council. We are a leading law firm in Vietnam with over 45 lawyers and staff. We operate from two offices, one in Ho Chi Minh City and another in Hanoi. We provide a wide range of legal services across multiple practice areas and offering legal support to business at every stage of your journey. Next slide please. And also we are recognized by leading legal publication including WHO Legal Jumper rankings Asian legal business for expertise in multiple practice area.

01:02:16
Tuấn Phạm Việt
Our lawyers has also been featured in the top 100 and ranked among 50 lawyers for many years, super lawyer for. So I think that brings the to the end of our presentation. So. And I will turn back to Mark for the moderator.

01:02:41
Mark Dickens
Excellent. Thank you very much, Alex. I appreciate it. And so now that we've had a chance to kind of give a or get an overview of the market and the opportunities there, we've been able to understand how to navigate some of those contracts as well with some of the legal considerations and what to watch for. I guess the last piece of that puzzle is now that you've potentially identified an opportunity, you've navigated the contract and you've purchased an asset, how do you go about protecting that asset? So I'm excited to introduce Olive from Baomin. She's going to talk about the insurance component in terms of how you can protect your new investment. So Olive, welcome and we're excited to have you here today.

01:03:18
Olive Nguyen
Thanks Tamar for the introduction. Let me put on my screen first so everyone can see my screen, right?

01:03:30
Olive Nguyen
Yeah.

01:03:31
David Jackson
Yeah.

01:03:31
Mark Dickens
Okay.

01:03:35
Olive Nguyen
Okay.

01:03:35
Olive Nguyen
So good afternoon everyone. Thank you for taking the time for today sessions. Olive represent for Ba Minh Insurance Corporation, one of the top three insurance company in Vietnam. And as we go through with David and Alice we have covered all for the real estate market and then legal aspect. But one major risk still remain is the uncertainties. So that's why the insurance is very important and it mitigate the loss and the protect assets sustainable. So for today's session I'm very excited to discuss with you one key topic about the risk management and insurance solution in the real estate industry. So this one pictures before we start we will go back to September 2024 when Vietnam were hit really hard by the Yagi typhoon, one of the most severe storm in the recent years.

01:04:35
Olive Nguyen
And according to the report the Yagi typhoon cost around 3.3 billion USD in the total damage. And mostly it comes to the property damage and for property damage is reaching to 1.6 billion USD for the loss and it affect about 26 province in cities. So the huge damage but for the total PR in the market we only pay out around 400 million USD for the total loss that from the insurance and which is only 25% of the total loss. So we can see that over the past few years within the insurance market and also for the reinsurance market we record and then we research and then we consider that climate change had made the extreme weather event become more unpredictable and severe and it posed significant changes for the risk assessment and mitigation and for the real estate and development and construction.

01:05:45
Olive Nguyen
Those Projects with high stakes industry involving in sustainable financial investment, regulatory complexity and unpredictable risk. So the question here is that how well have you prepared to protect your asset from enforcing risk and disaster? So for my part today I will cover for three key area. The first part will be understanding the major risk in the real estate and construction project. The second part will be going to see what type of the essential insurance policy that can safeguard your business. And then the last part will be update some new trends shaping the future of real estate insurance. Okay, let's dive in. Now let's take a look into this graphic. So the risk in the real estate and construction projects risk come in many form. But they can generally be categorized in three main group. The first group will be property and assessed risk.

01:06:52
Olive Nguyen
Where all the risk come from the natural disaster like earthquake, flood, storms, any coming from the natural disaster that can cause damage to your building or infrastructure. And will have risk come from fire hazard and risk come from unexpected incident into the machinery or assess structure. And also we have the risk coming from erection equipment breakdown during the cornerstone, the construction and installation. And then we will have the business risk come after the property risk when the property damage that leads to the operational interruption so it caused the loss of income. And then we will have the third one risk is the risk of liability. So any risk coming from the third party body injury or third party property damage that result in the legal claim and then compensation payout it could belong to the liability risk.

01:07:54
Olive Nguyen
So we can see that without the rights management strategy, these challenges can escalate into financial district and legal battle. That is where insurance plays a crucial role. So in this part I will brief through some key insurance products that can apply and must have for your construction and real estate project. The first one we will have property insurance. So for property insurance is a fundamental safeguard for your real estate and construction project. Because it will provide the protection for before, during and after the operational phase. And so for the before operation. So when the project is in the development phase, there are two type of insurance policy that it requires.

01:08:47
Olive Nguyen
The first one is the construction on risk, which is the policy where it will cover for the damage to the building and the construction, including the risk from fire, storm, flooding, theft of material. And the second one would be the erosion or risk where the policy is designed for industrial and mechanical project, covering damage from to covering the damage to the machinery and installation during the erection and the testing phase. So these two policies is a compulsory and requirement by the Ministry of Finance, the local regulator in Vietnam. So any investor in Vietnam must purchase this construction insurance policy for any project that have a high potential public safety impact.

01:09:40
Olive Nguyen
Like private house that taller than seven floors, condominium, mall, factory own and project that in the post high environmental risk project in the industrial park, high tech park, industrial cluster, commercial zone and project that involving in complex technical requirement. So once the project in operation new risk emerge so it will require additional insurance covered. We have the property own risk insurance combined with the compulsory fire explosion insurance. So for the property own risk insurance, this policy will help to protect your building equipment inventory from fire explosion, flood pipes, storm, theft, vandalism. So this coverage will ensure the business continue to run even the face of unexpected disaster. And the second part that come alongside with the property own risk policies is the compulsory fire explosion insurance. So this one so the premium only count one but it has two part.

01:10:53
Olive Nguyen
So this one is very is a requirement by the local regulation and the insurance. This insurance is required for the property with high 5 risk like factory, commercial building, residential, high rise. So once the policy is purchased U.S. The insurer will issue out a certificate of insurance. So this one will help you to serve for any fire safety inspection in Vietnam for any business. And then we will go into the third type of policy is the business insurance, business interruption insurance. So this one will come which we go only when the financial loss is arising from the property damage that cover under the property policy.

01:11:48
Olive Nguyen
So this one will come together with the property policy so it will cover for the loss of profit any increasing cost like cost for the relocate operation, random temporary office space, any additional cost that will because of the property damage. So I have some case study of our client in the north regions. They have been purchased the BDBI property damage and busy interruption together for many years. But later on they decide to drop off the business interruption because they want to cut off more than financial expense or they underestimate the long term benefit of this coverage. And then the Yagi typhoon happened, their factory were damaged and they have to shut down for months. And they couldn't get the reimbursement from the insurer because they have canceled the busy interruption.

01:12:47
Olive Nguyen
So we find out that the loss due to the business suspend in more than the loss to the property damage. So depend on the assessed location business type. So I encourage you to have the basic interruption policy because it will help you to maintain the cash flow, meet the financial obligation and can recover faster without facing any financial strain. And last but not least, we will have the public liability insurance. So this policy type will protect the business against any legal compensation cost Arising from the accident that affect to the third party. Because you know for construction and real estate activity involving a lot of public interaction. So if it's for construction project, any construction activity that impact to the neighbor property like vibration from the excavation causing the crack in a chaden building or water leaking damage nearby the structure.

01:13:54
Olive Nguyen
And if it like real estate, a commercial real estate any visitor, contractor passerby get injured on site due to falling object uneven survey hazardous equipment. So that could be held for Libor and this policy will cover for it. So as my part is going a little bit fast because we will have the Q and A session. So the last part we will introduce a little bit about the some of the new emerging chain of the real estate insurance in the market like for the green insurance and green insurance policy and also we have the cyber risk. So for the ring insurance this is the new solution that developed for eco building, eco friendly building and renewal energy project because you know in the couple recent years a lot of investment coming to Vietnam for the renewable energy.

01:14:57
Olive Nguyen
We have a lot of project coming for the wind farm, the solar system, the solar and we also have the government support for any renewal energy project. So this type of green insurance like the warranty insurance for EV battery or the warranty insurance for the solar rooftop electric. So that would be some of the things that will emerge into the insurance market in Vietnam. And also we have the cyber risk where we insurance policy that will give the solution to the corporate management system from the cyber attacks and also the data breaches. So we can see that for real estate development involves significant risk that can impact to your finance and reputation.

01:15:51
Olive Nguyen
So I encourage you to stay ahead of knowing the what is the type of knowledge and what is the protection that you should have for your business so it can be a long term success and that's it. The part for my insurance session. If you have any questions related to the insurance please put in the chat box. We will get back for the Q and A session and if you have any question related to the insurance solution feel free to reach out Pass on to Mike because we will have the last 15 minutes for today's session.

01:16:27
Mark Dickens
Yes, thank you so much Olive and very informative presentation. I think we're going to have a number of questions. As I said before I started today, there was a few that came in prior to the presentation so we'll start with those. If you have other questions as well, feel free to drop those in the chat or there's a raise hand so you can do that. If you'd prefer to engage with one of our industry experts directly. But I'll get started with the first question. We're going to bounce back and forth and I think a little bit. David mentioned earlier on in his presentation there's a hot topic right now around some of the trade tension.

01:17:06
Mark Dickens
There was a question that came in that said which real estate product, residential, commercial or industrial, is Vietnam or, sorry, in Vietnam will be in danger from the US China trade war.

01:17:22
David Jackson
Mark. Is that for me, I take it, or.

01:17:25
Mark Dickens
Yes, that one is for you, Dave.

01:17:27
David Jackson
Okay, well, look, I guess everything that you invest in, I guess the key part and one of the key reasons why we're on a call today is just to stay informed, I guess is the first thing, you know, having professionals that advise you on the legal structure, the insurance, protecting your asset or the real estate just going forward is the key. I see a lot of clients globally that come to Vietnam, but it depends wherever you go, you know, everyone has a different investor's profile. It's very difficult to lump them all together. You know, when some people are talking about industrial, some people talk about residential. Obviously if you're investing in residential, your investment profile might be that it's located to a nearby school. It might not be money's your focus.

01:18:17
David Jackson
If it's an industrial, it might be to develop your supply chain, you know, so I guess the first thing to look at is why people are investing and what they're investing for because each person is specific why it's good to have consulting for us. I can tell you that with the trade wars and things going on, you know, the first thing, and one of the key things is logistics and infrastructure. I think economies and trade. You just see the disruption from Trump even next door to Canada with 50% tariffs. One day market goes a bit wild and then, you know, he changes his mind the next day and basically this doesn't bode well for investor confidence.

01:19:06
David Jackson
I guess one of the things to look at and like any business is that it's not a knee jerk reaction to anything more volatile markets like stocks and shares will do that. But if people are investing in real estate assets where investing in property, purchasing land, going through the legal structure, going through the valuations, developing the building or even lease agreements and contracts, they all take time and assets are less liquid. So I think most people are on the trade looking for long term planning. For example, for me, you know, working in real estate, do I worry about every year in Vietnam, the government changing Every four years. Bit of disruption. Yeah, I do when I'm in the transformative years. But really I'm looking at what's my investor's profile. Are they engaged in the Vietnamese market for 10, 15 years?

01:20:04
David Jackson
What would be a good return on asset for them? What is why? The why is the reason they're investing. It could be the site location for their supply chain. It's not necessarily to make money on the property transaction. So I think to answer your question, what would people invest in? How would it change? I think it's down to the investor. The most obvious one with trade is Trump China and people are contingency planning in places like Quang Ninh near the border. And Vietnam is even changing policy so that you can transfer a certain number of kilometers between China and Vietnam without going and getting visas for movement and things like that to help with stock. So I think anyone investing industrial real estate, great, that's definitely going to happen. Anybody with a long term view, again, it's individual based. Fair. Fair.

01:21:03
Mark Dickens
Thank you, David, I appreciate that. Jumping over to Olive had a question that came in about liability insurance. They're wondering if that includes legal fees, if there's a case in or a situation, sorry. In which there's a lawsuit and you actually might have to engage services from Alex maybe.

01:21:27
David Jackson
I think you're on mute, Olive.

01:21:33
Olive Nguyen
Okay. Okay, so. Pardon me, can you repeat the question again?

01:21:40
Mark Dickens
Yeah, the question's around liability insurance. So in a situation where somebody is potentially sued and needs to leverage their liability insurance, does the liability insurance include legal fees?

01:21:52
Olive Nguyen
Okay. So yes, technically, yes. Liability insurance can pay on behalf of the insured for the cost that the insured legally obligate to pay for the third party due to unexpected injury or property damage. And we also pay for any legal cost, including the defense cost that in combined with in the process of having the to pay out for the third party obligation.

01:22:31
Mark Dickens
Okay, thank you. Thank you very much. Alex, have a question around legal. It's really tailored towards foreign investors. I know you covered it in your presentation today, I think, but maybe just a recap would help here for the individual that asked the question, what are the most common legal pitfalls foreign investors encounter when acquiring commercial property in Vietnam and how can they avoid them?

01:22:56
Tuấn Phạm Việt
Thank you, Matt. I think from my experience when buying commercial property in Vietnam, buyers often face risk related to the legal status and the ownership rights of the property or the land use rights. Because in reality the commercial property or the land use rights, they might come from various origin. For example, it was an exit of the stay or it has been transferred many times. So it has many hidden risks that the buyer may not know at the time they decided to enter into the transactions. And also the land use purpose may not fit with the investor brands and changing it requires approval from the authorities and foreign investor. When they invest in Vietnam, they can only own land just right or have the own the property for a limited time based on the investment project.

01:24:15
Tuấn Phạm Việt
And to avoid this risk, I think the most efficient way is to conduct the legal due diligence as I have present. And so the buyer can check the legal background, review the ownership documents and get advice from real estate lawyer before making a deal. So that's my short answer to your questions.

01:24:43
Mark Dickens
Short answer to a long question probably. Thank you very much, I appreciate it. David, got a question around I guess the effectiveness of negotiation tactics. What is the best way to reduce deposits on commercial lease agreements?

01:25:01
David Jackson
Wow. Okay. Well I guess before I answer that, just to go back on what Olive just mentioned in terms of, you know, just are various things covered in your policy? And also what Alex is saying in terms of how do you mitigate risks? The first thing that I would do, I guess when I discuss to investor, apart from talk about the market as I, as I rush through in our presentation, you know, is to advise people to do their homework on both cases. Is it included in the policy for insurance you check the paperwork and the document because each paperwork is going to be different depending on the provider and you know, it's open to human error. And the same goes with Alex.

01:25:52
David Jackson
What Alex is saying is you do your homework, you look at the land use rights certificate, you see what the use is from the government and how it's influenced in terms of whatever it's doing. So it's no different here in terms of how do you first negotiate? Well, the first thing you do is you do your homework and you look at the documents and what they're trying to put in you to see if they are market norms, you know, to see if there is here in Vietnam, you know, the market, it doesn't matter what sector you're in. And it's a good thing in terms of opportunities. Every market is under supplied and over demanded at the moment. So if you're looking at residential, there's not enough. If you're looking at industrial, there's not enough. If you're looking at retail, there's not enough.

01:26:39
David Jackson
And so the contracts are very much government and landlord or developer focused. What I mean by this is a lot of them have penalty clauses in. A lot of them have restrictions in terms of the tenant because from the landlord they spent a long time dealing with the government purchasing the land. A lot of time, a lot of cost developing building. Whereas a tenant or somebody purchasing apartment has personal risk, but probably a lot less risk financially. So a lot of the contracts are landlord focused. Now, as a consultant, we operate on behalf of the developers, but we also operate on behalf of the individuals looking and focusing.

01:27:22
David Jackson
So I think the first thing to do is look at the documents to see what's on offer, to see their market norm, and then, you know, talk to professionals that can maybe even through influence or maybe even through negotiations that have been through it before, direct the customer or the consumer into the right way for them to mitigate as much risk as possible, if that helps.

01:27:48
Mark Dickens
Excellent. Yes, thank you very much. Going to go over to Alex. Got another question for you on lease agreements. This one is really between landlord and tenant. How enforceable are lease agreements in Vietnam if there's a dispute between landlord and tenant? And what mechanisms exist to resolve those disputes efficiently?

01:28:16
Tuấn Phạm Việt
I think this agreement in general and possible in Vietnam is the contract follows the requirements by the law and it contains like clauses regulated by the civil court or the resting law. And but the funny thing is that when we're talking about a dispute between landlord and tenant, I think it's kind of something undeniable in Vietnam for some reasons. Mostly, you know, my family also has some properties and we put it in land transactions. And also even me as a lawyer or my friend or my colleagues as a legal counsel, they also engage in the dispute with tenants. So to answer this question, I think the most easiest way is to set things clear on the contract so when the dispute arise, you can have the rise and also the mechanism that provided in the contract.

01:29:47
Tuấn Phạm Việt
So you can handle it in a more effective way before you have to. But if the dispute cannot be negotiated or the negotiation fails, the only thing is that you have to bring the dispute to court or to arbitrations. That's it.

01:30:16
Mark Dickens
Sounds good. Thank you very much. I appreciate it. All of this one is around construction. Interesting question here. If a construction actually.

01:30:23
David Jackson
Sorry, sorry, can I just add to that? Look, you know, I guess one of the problems about people coming to Vietnam, the first one is that its decree law issued a decree or a statement by the government. And that decree is not like America or Australia or the uk, which is law of precedent, which is case history, you know, Kramer versus Kramer, where there's incidences that you can go back to. It's down to the discretion of the judge if it goes to court and often the judge is based on relationship, you know, of those parties. Very difficult to sue. The Vietnamese government, for example, you that be very unwise to do so. You know, I guess one of the issues, lease agreements for example. I wrote a lease agreement a long time ago.

01:31:12
David Jackson
Most commercial office buildings have a version of my lease agreement that's been copied and pasted over the years that I'm very familiar with. And like Alex says there's, you know, there should be cases in that agreement that are to rectify if the contract is frustrated, I. E Can't be enacted properly, you know, or there is a party at fault and there's generally a clause for that. I think by the time it gets to legal issue and working in the courts, it's probably too late. As Alex said in his talk, it's down to negotiation and discussion. In Vietnam. I saw, I can't remember who while were talking earlier on popped up in the messages and said, you know, there's no straight contract in Vietnam or something on the notes.

01:32:03
David Jackson
But the honest and short of it is Vietnam and Asia is a relationship based business where you're dealing with people on face, you're dealing with them on trust. The contract is a framework for people to behave properly and you know, to utilize discussion for negotiation. If you, by the time you're going to court, you know, most landlords don't want that either because if you start pulling back the premise from some people, you have to go through the process of surrendering the unit, getting the police to come down and measure the assets in it. You can't get income from it. You can't do lots of things in terms of pulling back the property between.

01:32:46
David Jackson
So you come to negotiation and that's why they hold leverage, that's why they hold deposit agreements and money from them to make sure that there are ways where people can exit hopefully with a bit of grace.

01:33:01
Tuấn Phạm Việt
Thank you. I, I totally agree with you.

01:33:05
Mark Dickens
Definitely makes sense. Thank you both. Olive, I have a question for you. Actually we've got a live question. We'll take that one first. Go ahead. Whenever you're ready.

01:33:18
Thanh Ho
So actually because David mentioned the message in the chat, I just want to repeat the question that we had that Jacob, I think he, he was asking about an agent that work on the buyer commission. Is that possible in Vietnam? And also I believe, but maybe my belief is not Correct. I believe the contract for the, the contract, especially the contract for the apartment and for the new apartment, the contract is fixed. I don't think you can change it. But maybe my belief is wrong. So I was hoping that David can help me to clarify on the belief.

01:34:11
David Jackson
Yeah, sure. So just to answer your questions, hopefully one by one. Look like any business, it depends on the practice in that country. So I'm an international advisor to companies and real estate transactions. In a market like Vietnam where as I mentioned, the product or the real estate is under supplied, you know, it means there's not enough in the market to match the demand. Often there are contract restrictions on how to pay for that. So for example, the brokerage here, if you know, land has only been transacted since 1976. So it's very early. The legal framework isn't around to do that and to hold on to it. And the government issues it only for a certain period of time. And the decree laws change.

01:35:05
David Jackson
Whether Viet Q or Vietnamese overseas can buy land or not buy land, whether foreigners can buy properties, don't know land, whether people put it under power of attorney. There's a lot of intricacies to the market. Residential is one of those that is one of the most difficult to look at because there are so many different types of people buying the property. And it's an emotional transaction because you're often buying it for family or you're buying it for investment and to flip it and move it forward, I guess. So the broker question is, you know, who pays the broker? Who's the broker acting on behalf of? Now, in markets where there's an equal balance, the supply equals demand, like let's say Japan or the uk the broker can act on either party and get a fee from either party as long as it's declared.

01:35:57
David Jackson
So dealing with compliance, I can act on for somebody to buy an apartment and they can pay me for a fee to act on them, or I can act on the landlord trying to sell or lease the space and I can act on them as long as it's declared and I'm working for that party. In some cases. Large M and A transactions you can take from either side. Often this might happen on M and A and commercial property properties as long as it's declared ethically, it's called double dipping. If you go into both and you try and get a fee and you don't declare it, which is very bad because who are you representing?

01:36:33
David Jackson
But in Vietnam, it's normally the seller that buys the Property in residential, it's even more complicated because a lot of the people selling it, especially up in the north or in Hanoi, they also want. They pay the broker to represent the seller, but they also might want a percentage back for the opportunity to represent their property. Again, as long as the government, as long as there's tax paid on it and it's declared and it's put back in, then there should be no issue when it's under the table. Money slightly different. But commercial properties, it's normally because of Vietnam, the history and the scarcity of property, it's normally the seller that pays. And it's down to the broker to act ethically and declare their side. What I see on commercial property a lot is that the.

01:37:24
David Jackson
The person is a tenant representative looking at putting an office tenant in a building. They receive a fee from the landlord. And when I look at the contract after I know that the broker hasn't cared about the tenant because they haven't push back on some of the contract terms in there because they're just worried about their fee and that. And that happens a lot here with bad brokers that don't know how to represent their client properly. They just care about the fee.

01:37:56
Mark Dickens
Thank you very much for that one. And there was one question for Olive they wanted to get to, I thought was an interesting one around construction sites. So if a construction site causes damage to a neighboring property, how does the policy cover the costs?

01:38:14
Olive Nguyen
So the construction is damaged to the neighbor property and what type of the policy will be covering for the cost? Or the question?

01:38:26
Mark Dickens
I think it says if a construction site causes damage to neighboring properties, how does the policy cover the cost? So I think they're alluding to that they have liability in place in this case. But yeah, that would be my assumption.

01:38:44
Olive Nguyen
So for this one, if like construction site that cost damage to the neighbor, the next building, that has become an legal request coming from the third party because the construction activity, then the policy will be trigger to pay out for the loss to the third party and also for the legal fee if it necessary. So the coverage for the public library will be up to the. Some insurer that they gonna. The insurance have paid, have purchased for the policies. So yes, it would trigger the public liability insurance, as I mentioned.

01:39:35
Mark Dickens
Okay, thank you, Olive. And then I know we're a little bit over time here. We'll wrap it up with one last question today. Dave, there was another one that came in through the chat. I see the market has risen in condotels, hotel villas sold on Commercially zoned land for David, how are the foreign investors interest. Sorry, how are the foreign investors interest on these projects? Bertuan? Sorry, a double question. Bertuan. Alex, how are these projects attractive on the legal standpoint foreign buyers? So let's start with Dave on this one and then we'll pass it over to Alex.

01:40:07
David Jackson
Yeah, I think this is, you know, obviously there's, I just touched on it briefly. There's been recent changes in the real estate law. You know, for me one of the reasons that you invest in real estate for a long term development is you get a good return on investment and that you are secure and legal in your ownership of that property and benefiting from that property. Because real estate has only been traded since 1976. Here a lot of the decreed laws are still unclear on new methods of real estate. You know, even you know, timeshares as well. Even things like fractional ownership of properties, which is, you know, where people might own sort of, you know, bitcoins worth of property as well. But actually if there is a problem with the property and you know, who actually owns that and who's responsible for that.

01:41:04
David Jackson
So I think that's the key and where the government's trying to address condo tells and things like that. You know, they are popular in emerging markets, they're less popular in developing markets because there is normally a better legal structure and framework around them and they're not cheating the customer. I'm not saying that they're a bad product, but basically for those people that don't know a condotel is where you would purchase, you know, maybe I'll just keep it very simple but maybe you know, a room in a hotel and you join the hotel group in a shared consortium and they rent that room out on the hotel minus management costs. And then depending on the amount of rooms in that rental pool, you get an income back. Now the question is in Vietnam it's very clear, red book the land ownership, pink book apartment.

01:42:05
David Jackson
But condotel is different because you've also got the management fees for that. So what you generally get is they're a lot cheaper, more cost effective to purchase the property. And then you get maybe like a timeshare, you get a certain amount of days stay there per year plus you get the income of that property. But the reason they're not properly in mature markets is because people are, they understand rental yields, not capital appreciation, I. E. The land going up in value and we what it's worth at the end of the product. And so what happens generally is People manage these properties, they. They promise the sales price for these properties. It's going to be a great house for your family. It's cheaper to buy.

01:42:51
David Jackson
They selling the experience of the property but in terms of return on investment often the management cost goes up each year, the profitability goes down. People are not left with owning the right structure and when they come to exit it's very difficult to exit. A lot of people invest on the dream but they don't know their exit strategy. You know Alex will know more about this but there were recent changes in. In. In Vietnamese law to structure and stabilize this. But still it's a very gray area. It's very risky. I would look at the developments, make sure that the developer was good, make sure the management company was good, make sure that the rental yield and the maintenance were done to get long term stabilize growth. If you're going to invest in that.

01:43:35
David Jackson
There are some horror stories along the coast, you know where people have been promised footballers have bought properties and you know it just didn't happen. It was all fantasy. So over to Alex on that. But I. I'd say very risky.

01:43:56
Tuấn Phạm Việt
Yeah, I. I totally agree with David about the conversation hotels and also for all the kinds of the property. So and I think from. From the legal point of view the. I mean the residential houses are more stable than the. In terms of legal standpoint because as David has said the. It's still the gray area in the products like connote and hotel villa that built on the commercial zoned land. And as we are and we have to find the appropriate structure for the transactions between the developers and the buyers in terms of the condotel and the hotel villa. So I think it is better for the foreign buyers if they prefer the need more legal side project in the residential commercial products then we. Then they look for the investment in the color tails because it.

01:45:38
Tuấn Phạm Việt
It has more risks than the like the apartment or the building. So that's just my quick answer to that question because I think it is very good question and it direct to the point about the legal standpoint of the real estate market in Vietnam right now. So David, do you have any add on?

01:46:08
David Jackson
No, look, I think you're right. I mean again I know we're kind of coming to closing time and closing statements and things like that but just really just it's great to be on. On a panel and discussion and thanks very much for attending Pacific to put this together. You know insurance, liability, legal purchasing property working massively passionate and. And that people want to know about and. And complicated Processes, depending on whatever it is, you know, I can't tell you enough. When I talk to international consultants, you know, it's amazing. A lot of them that are American, English, European, they come over here trying to invest, and they don't seek advice from people like Olive or Alex and myself. They just think they're going to do it American way or a European way, you know, and they lose their.

01:47:02
David Jackson
Not just their shirt, but their trousers, everything. And they go with a complete misunderstanding of the market and what it's about. When I'm dealing with investors that are more localized, focused, Japanese, Korean, you know, Singaporean, they reach out to not only consultants, but also the Chamber of Commerce. They get the trade groups, they get a network internally of people who to talk to. They have information to make it clear, understanding, you know, and they're actually successful, which is why the foreigners, as I mentioned in the first part of my talk from the States in Europe have difficulty understanding the market. So, you know, having people talking and going through the different products or whatever it is and making their knowledge other people's property basically is, you know, the key.

01:47:56
David Jackson
And so anyone who's listening today, I'll just say, you know, it's great to had these in talk and I'm, you know, always happy to take part because, you know, I want people to be. Feel comfortable and invest in a place that I love and also a place that I think over the next 10 to 15 years is gonna absolutely be part of the world stage and invest in Vietnam, you know. So that's all really. My final comment.

01:48:22
Mark Dickens
Definitely, definitely. Thanks so much, David and Alex and Olive. I don't know if either of you guys have any closing comments for the group today before we wrap up. All right, well, I'll conclude for today we've got our four speakers on the screen there with their contact information. So if you guys do have additional questions after the webinar today, don't be shy to reach out. We're here to support and thank you again for coming out. And as David said, it's always a. Always a treat to get complimentary experts in the same room together and have a panel discussion because like you said, without experts like these individuals, it's very tough space to navigate in terms of doing it successfully. So thank you again for your time today, David, Alex and. Wow, losing my train of thought here at the end, all of.

01:49:20
Mark Dickens
And yes, we'll be in touch. And thank you again, everyone.

01:49:25
Tuấn Phạm Việt
Thank you so much, Mark.

01:49:28
David Jackson
Thank you for the opportunity. Thanks. Bye bye.