Selling Luxury Apartments to Frugal Vietnamese

Pham Nhat Vuong, the billionaire chairman and founder of Vietnam’s largest property developer, Vingroup, is spending more than $4 billion to develop luxury apartments in Ho Chi Minh City, Hanoi, and several of Vietnam’s coastal and provincial cities. “If you give me $10 billion now, I would spend it all on construction because there’s so much more to build,” says Vuong, who with his wife owns about 50 percent of Vingroup, the country’s fifth-largest company by market value, $2.6 billion as of Oct. 29. “There is tremendous demand in Vietnam.”

That’s an optimistic take on the country’s urban real estate market, which is currently suffering from a glut of available apartments partly because mortgage financing is rare—most purchases are cash transactions. Vuong says the lure of a better “living experience” is part of his sales pitch to potential buyers. “They just can’t sit on gold bars underneath their beds,” he says of Vietnam’s famously conservative investment culture. “Eventually they will pull out their gold bars and invest.”