Diamond island Getting through the difficult time of real estate market in Vietnam

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
ACKNOWLEDGEMENT

It is a pleasure to thank all of those who gave us the possibility to complete this project.
First, we owe our deeply gratitude to all the professors who gave us invaluable
encouragement and knowledge during two years at Solvay Brussels School and HCMC
Open University.
Then, we would like to express our best gratitude to our tutor, Mr Serge Bywalski and
Prof. Alain Van Den Eynde for all their support; inspiration and encouragement as well as
discerning advices, during the months it took us to complete this project.
We are really appreciate the great support of Ms. Nguyen Thanh Thuy – Marketing
Manager of Diamond Island in providing us many valuable information that help us fulfill
this project with real statistic value and information.
We would like to express our best gratitude to our family for all the love, encouragement
and sacrifices they made for us.
Lastly, we offer our regards and blessings to all of those who supported us in any respect
during the completion of the project.

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
CONTENT
PART 1: DESCRIPTION OF THE DIAMOND ISLAND AND THE MARKETING
& ADVERTISING STRATEGIES 6

I A
BOUT DIAMOND ISLAND PROJECT & THE INVESTOR 6
1. Di
amond Island Project 6
2. B
TA 8

II M
ARKETING & ADVERTISING STRATEGIES IN THE PAST 9
1. Pr
e-launch Period : 2008 – early 2009 9
a Th
e Objectives 9
b. P
R Strategy 9
c P
R Campaign 9
2. La
unching: June 2009 – 2010 9
a Th
e Objectives: 9
b. Ta
rget Audience – Demographic: 10
c M
essage to Deliver 10
d. P
R & Marketing Strategy 11
e M
arketing Campaign 11
3. Af
ter Launch: 2011 -2012 14
a Th
e Objectives 14
b. M
essage to Deliver 14
c M

arketing Campaign 14

III. DI
AMOND ISLAND PROJECT – THE PUBLIC RELATIONS CRISIS 21

PART 2: ANALYSIS OF THE CURRENT POSITION AND SITUATION 22

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
I IN
DUSTRY ANALYSIS 22
1. Re
al Estate Market in Vietnam 22
 Fo
recastoftheEconomyandRealEstateMarketin 

II C
USTOMER ANALYSIS 26
 W
hoarethecustomers
 W
hatdocustomersdowiththeproduct 
 W
heredotheybuytheproduct
 W
hydodonttheybuy

III. C
OMPETITIOR ANALYSIS 29

 Th
eUniqueSellingPropositionsofDiamond)sland 
 Co
mpetitivePowers

IV. B
RAND ANALYSIS 35
 Br
and)dentityPrism
 Cu
rrentBrandAwareness


V. DI
AMOND ISLAND PROJECT ANALYSIS – SWOT 39
1. St
rength 39
2. W
eakness 39
3. O
pportunities 39
4. Th
reats 39

PART 3: NEW MARKETING AND ADVERTISING PLAN FOR YEAR
2013 – 2015 41

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I Pr

oblem summary 41

II N
ew marketing and advertising plan for year 2013-2015 41
1. O
bjective: 2013-2015 42
2. M
arketing Campaign 42
a. C
RM system developing 42
b. Di
stribution system developing 43
c. Cr
isis management 44
d. A
dvertising 45
e. Di
gital marketing 50
f M
arketing Schedule 53
g. C
onclusion 54

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TABLE
Table 1: The rates of USPs of each project: 30
Table 2: Diamond Island – SWOT Analysis: 40
Table 3: Marketing schedule: 53
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DIAMOND ISLAND
GETTING THROUGH THE DIFFICULT TIME OF REAL ESTATE MARKET
IN VIETNAM

EXECUTIVE SUMMARY

Diamond Island is an only island located at District 2, next to the new strategic urban area,
Thu Thiem, a new finance and administration center, taking 7 minutes to the center of Ho
Chi Minh City. The projects will include approximately 1076 apartments, 24 sky villas ad
144 hotel rooms. Diamond Island was developed and excuted by Binh Thien An Property
Joint Stock Company. The company was established under business license issued by Ho
Chi Minh City Department of Planning and Investment on December 12, 2005.
Diamond Island’s mission is to bring every of its resident to the most amazing experiences
with a top living style in an ideal living environment, where outstanding architecture and
top luxurious facilities are blended with romantic landscape, prosperous fengshui, and
humane resident community. It was launched in June 2009 and become an impression
point of urban architecture with the international stature within Ho Chi Minh City
particularly and in Vietnam.
Diamond Island generally has a good marketing strategy and campaign. They have created
a strong and recognizable brand identity with Diamond Island as the project with luxury
apartments and sky villas and BTA as the Reputable developer and manager. They’ve also
built up awareness and adorability of a high-class community at Diamond Island in near
future. With luxury events, the message to deliver is that Diamond Island is a thriving
place for living with the ideal community for intellectual and successful people. It also has
the privilege to have an elite community of being successful and top notch in society.
However, from 2011 to 2012, after PR crisis happened and the real estate value started the
downward trend, Diamond Island had to face to a lot of difficulties and challenges to get
through and reach proposed target business.
Recommended marketing strategy in 2013 will focus on great location with fresh air and
green environment as well as increase Diamond Island brand value by environment
responsibilities and activities. In 2014, strategy will focus on ideal and unique fengshui
location of Diamond Island to attract effectively target customers. Improving crisis

management process and developing CRM and distribution systems may increase
opportunities to explore the huge potential market, and then enrich target customer data
and support sale team and brokers could reach successfully to prospect.
With this recommended marketing campaign using suitable marketing strategy and
effective marketing tools such as events, social media, E-news…would help Diamond
Island overcome through the difficult time of real estate market in Vietnam.
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

PART 1: DESCRIPTION OF THE DIAMOND ISLAND AND THE MARKETING
& ADVERTISING STRATEGIES

I. ABOUT DIAMOND ISLAND PROJECT & THE INVESTOR

1. Diamond Island Project
Diamond Islands is a high quality residential apartment development with river access and
view. The projects will include approximately 1076 apartments, 24 sky villas ad 144 hotel
rooms. Total build space is approximately 300,000 sqm (Construction Floor Area CFA).

Diamond Islands also consists of high class commercial and service center (including
restaurant, supermarkets, retail stores, cinemas, swimming pools, marina, etc.) and a
kindergarten, which is targeted to provide the best facilities for residents of Diamond
Islands.

It comprises of 5 zones name Zone A, Zone B, Zone C, Zone D and Zone E. Each zone
will be built once after another, starting with Zone B in 2008. Total construction floor area
of this Zone B is 67038 sqm.

Some development data of Diamond Islands:
• Site Area: 79944 m2

• Area within setback lines: 48032 m2
• Allowable Gross Floor Area: 215600 m2 (does not include car parks, etc)
• Maximum number of floor per tower: 29 floors
• Car park requirements: 1.1 covered car parks/dwelling units (minimum 1094 lots)

Diamond Islands is bounded by Thanh My Loi quarter in the East, the Giong Ong To River
and Thu Thiem quarter in the West, the Sai Gon River and Tan Thuan Export Processing
Zone in the South and An Phu Quarter in the North. With this unique location, Diamond
Islands can be easily accessed via water traffic such as water taxies and river ferries to and
from the city.

It is located of a 8 hectare island with a beautiful landscape setting, the island provides a
natural exclusivity and yet is still very close to the center of Ho Chi Minh City. Being
surrounded by Sai Gon and Giong Ong To Rivers in district 2, the green forest and clean
water here make the location highly desirable with regards to Feng Shui. The island is just
like a diamond inside a dragon due to Saigon River shape is just like the Dragon outline.
Geomancer appreciate such location is the most unique and rare to find, and supposed to
provide wealth and growth for people living in. This hence gives the Feng Shui to the
whole project in particular, unlike the competitors' when buyers can only create Feng Shui
inside their apartments.

Additionally, the island is located among important traffic systems such as Thu Thiem
Tunnel and the
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East West Highway, Thu Thiem Bridge, District 1 Bridge, District 4 Bridge, Phu My
Bridge, Ho Chi Minh
- Long Thanh - Giau Day highway. Therefore transportation access to and from the island
is extremely easy.

The architect approach for this project is based on the following concepts:
• Porosity: Creating a porous atmosphere in all scales of the project, and open facade for
natural ventilation and taking advantage of the river breeze. With voids, double height
living rooms, terraces and louvers the concept of porosity is achieved. Each residential
cluster is made of 6 towers which are pulled apart, creating open corridors and maximizing
the exterior views and privacy.
• Elevated Green Mound: A two stories high structure with sloped edges creates the
appearance of a green mound and at the same time hides all parking, MEP and
infrastructure areas.
• Urban concept of an archipelago: The entire island is treated as an urban island within the
context of a larger development of additional islands.
• Mountain shaped skyline: With the tallest towers at the south side the towers' height
descents towards the north side on a two - to four floor modules.
• Sky villas: Because of the lack of ground area, the villas are located at the top of the
towers with one villa at each individual tower. Each villa is to have maximum river views
and a private swimming pool.
• Green belt: At the perimeter of the island with the aim of preserving the natural
vegetation.

Riverside leisure facilities: Small yacht harbor along the west side of the island on the
Giong Ong To River.
Diamond Island also aims to create a luxury living condition for its inhabitants. Before the
zoning of the project, the wind was studied with NASA equipment for a year to segment
the wind before allocating buildings. Careful studies have also been done from the style
studies and product concept test to make sure Diamond Island is a luxury resident project
in term of iconic architecture and interior design, and with exclusive community for top
notch Vietnamese people who value the new luxury living style concept. Customers have
the choice and the opportunity to actively participate in the design, look and feel of their
home. They desire their home to be personal, unique and tasteful as well as communicate a
message about what is important to them.

The project has all facilities and services from the finishing of the home for customers to
daily living needs such as free secretarial service, highest security, community style
development programs such as regular meetings, training for adult and children as classy
behaviors, etc. This enables customers to benefit from living in a community of both
wealthy and classy people, and daily networking for both life and work.
The project combines a range of finest quality apartments in the guise of a city resort, and
provides excellent living conditions to enrich the life essence of its most fortunate
residents. Combined with the calming riverside environment and relaxing lush
landscaping, that underlines the natural beauty of the island, the Diamond Island
development is positioned as the safest of investments readied to appreciate in value
through time.
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

The exquisite living conditions have been carefully considered to ensure all needs are
satisfied for the privilege residents. The premium facilities include those to support leisure
activities such as the unique Princess Marina Yacht Club, a professional standard
gymnasium, and the 5 star Health and Beauty Spa. Support facilities include the
international standard kindergarten, general and specialist shopping, dental and healthcare
clinics, secretarial services, and international property management to ensure the seamless
integration of state of the art back of house activities, and highest security assurance.

The external environments are as equally inviting as the luxurious apartments themselves.
The landscapes have been carefully crafted as a living green belt that envelops and
welcome all to visit in peace and relax. For the business and social minds there are intimate
spaces within the landscape for entertaining and to create special community activities and
networking opportunities. The lucky children will enjoy the excellent living conditions,
with ample space for play inside and out within the gardens and fresh air, plus benefit from
growing and developing among this privilege and elite community.

2. BTA
Binh Thien An Property Joint Stock Company is the investor of Diamond Island Project.
The company was established under business license issued by Ho Chi Minh City
Department of Planning and Investment on December 12, 2005. To develop and execute
the project, the company has set up a new legal entity which is Diamond Island
Development one member limited company on March 25, 2008.

It is planned that once BTA obtains Land use Rights it will contribute it into charter capital
of Diamond Island Development. The cost related to the project will accordingly be
transferred to DID. BTA Investment Management Vietnam Co. Ltd, a professional project
management company shall provide general management services, administrative support
and sales & marketing services for the project.
The number of employees of BTA Property at December 31, 2006 and 2007 and August
31, 2008 was 3, and 11 respectively.

The number of employees of BTA Investment Management at December 31, 2006 and
2007 and August 31, 2008 was 1, 11 and 37 respectively.


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

II. MARKETING & ADVERTISING STRATEGIES IN THE PAST

1. Pre-launch Period : 2008 – early 2009
a. The Objectives:
The objective in this period of pre-launch is to create the brand awareness for
Diamond Island.
b. PR Strategy:

Focus on the unique location of Diamond Island and the special investment on the
project to create the most luxury apartments in Ho Chi Minh City
c. PR Campaign:
HO CHI MINH CITY WILL HAVE DIAMOND ISLAND
Diamond Island - a luxury housing project - will be built on an 8 hectare island near the
Sai Gon River. This project is invested and managed by Binh Thien An Co with the
capital of 300 million USD.
ARCHITECTURE COMPETITION FOR DIAMOND ISLAND

(Source: vnexpress - Excitement grows about Diamond Island project in Sai Gon)
To find the most efficient solution for Diamond Project, BTA invested 1 million USD
in the International Architect Contest with contestants come from famous architecture
firms around the world including Arata Isozaki, Wood Head, AS&P and PTW. The
winner finally awarded to a German architecture, Arata Isozaki only came second place
however he was chosen for the project because BTA thought his style is fit for this
particular project (Asian style with Fengshui).

2. Launching: June 2009 – 2010
a. The Objectives:
 Create a strong and recognizable brand identity: The objective is creating a
strong and recognizable brand identity with Diamond Island as the project with
luxury apartments and sky villas and BTA as the reputable developer and manager.
The goal of this stage is to reach minimum 80% of target customer's awareness in
the time of 3 month after this communications stage was launched.
 Build credibility: Show off all superiorities of Diamond Island compared to
competitions such as the Lancaster, Southern Palace, Raffles Residence, Sailing
Tower
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
 Drive brand preference: Give the impression that Diamond Island is the dream

home of fortunate residents. They will have benefits of living in a wealthy and
classy community, having chance of networking, living in a healthy environment
with good Fengshui and the ability to customize their home to make it unique and
fit their personalities.
 Stimulate interest and desire: Drive inquiry and generate sales leads with the
target of successfully sell 95 units by the end of the complete sales of Zone B in
2010.
b. Target Audience – Demographic:
The key target market is high-net income individuals who have liquid assets of
USD 1,000,000 or net income over US$200,000 - US$500,000 per year who are
purchasing Diamond Island units as an end user rather than an investment.
The secondary market are real estate business, investors, they are local or expatriate
who wants to invest in Diamond Island for mid & long term to resell, serviced
apartment or the boutique hotel.

(Source: Ms. Nguyen Thanh Thuy – Marketing Manager of Diamond Island)
c. Message to Deliver:
Diamond Island Sky Resort is the supreme residential project with luxury and
exclusive settings for premium class only.
Superior Living Condition:
 A well-planned and designated project for top class people only. This well-
plan strategy and clear segmentation also satisfy the needs of wealthy people when
they desire a better environment with clearer brand mark that embodies their social
status and esteem.
Superior Interior Design:
 With the interior design in Minimalist style with efficient space usage, less
partitions and give an open-up feel for relaxation, the buyer can participate in the


finishing of the apartment with stylish decoration through the available options

and personal consultancy, and expressing their lifestyle and status, and minimizing
the cost to compare with the self-decoration status.
Superior Customer Design Facilities & Services:
 The project has all facilities and services from the finishing of the home for
the customer to the daily living needs such as free secretarial service, highest
security, community style development programs such as regular meetings,
training for adults and children as classy behaviour, etc. This enables customers to
benefit from living in a community of both wealthy and classy people, and daily
networking for both life and work.
 Being unique in location and the resort-comfort designated lifestyle, DI
provides the tenants with not only the best living conditions but also a firm
assurance of investment return!
d. PR & Marketing Strategy:
The PR& Marketing Strategy has three main core implementations:
 Outside-in: to use international media as the source of information and
platform to attract attention, and localize the content for local media to add more
credibility and word-of-mouth.
 Co-Branding: to capture opportunities with the world famous Brands (both
commercial, and people Brand such as Celebrities) to quickly create the
association with Diamond Island Brand.
 Quantified messages: because Diamond Island has so many superior facts,
figures, and features than the competitors, we need to use them as indicators for
direct comparison and immediately classifying Diamond Island as the top-class
project.
e. Marketing Campaign:
 Advertising: via Communications materials, print ads, TV programs:
The project has great location with the island is just like a diamond inside the
Dragon due to Saigon River shape. Geomancer appreciate such location as the
most unique and rare to find, and supposed to provide wealth and growth to people
living in. This hence gives the Feng Shui to the whole project in particular, unlike

the competitors’ when the buyers can only create Feng Shui inside their
apartments.
It also great as a long term investment as well as offer residents a unique luxurious
architecture & lifestyles.




THE DIAMOND STORIES - PRINT ADS -
on lifestyle magazines such as Heritage,
Doanh Nhân Cui Tun(Weekly Entrepreneur)


(Source: Ms. Nguyen Thanh Thuy – Marketing Manager of Diamond Island)
 Public Relations: Editorial about the projects/ corporate &
Advertorials / media releases weekly.
‘Interview the main contractor’ (Coteccons), primarily Mr. Duong - CEO of
Cotteccons in terms of reasons why he and his company join DI construction, and
Coteccons' preperations of equipments and techniques to finish phase 1 within 20
months

‘Interview Turner International’ (US) - DI management relating to manage and
keep the construction site clean and effective via the most advanced management
technique

‘The Big Names guarantee the quality of the project’

‘Arata Isozaki - his typical works over the world, especially AIA masterpiece
in VN - Diamond Island’: His design concept thanks to deep study of water and
wind flows, the island is covered by rivers and protective forest which is an ideal

natural environment rights at the heart of the city. Arata Isozaki has a very strict
vision about this project including 14% construction density which helps more
breathing spaces between structures.

‘Portrait building the new citizens of Diamond Island Sky Resort’
+ With endorsement of some famous, intellectual couple (like My Linh & Anh
Quan - Singer and composer)
+ Portrait of some successful businessmen/women



'Top-notch community’: the unique, exclusive community for DISR citizens only

'Luxury Apartment – from 1 million USD on the Island in Saigon’: the unique,
exclusive community for Real estate dealer in Ho Chi Minh City are shocked with
million-dollar apartments in Diamond Island, only 10 minutes river way from
district 1. Moreover, these apartments are limited sales only and only celebrities are
chosen to have a unique opportunity to become Diamond Island's resident.

 Event: Launch gala event, special event of Diamond Club
CREATING EXCELENCE TOGETHER – DECEMBER 26
TH
, 2009
Evening of 26/12/2009 at Diamond Island Construction site, the Dong Tam Tao Ky Tich
festival with the attendance of BTA's employees and partners in this project. Images and
information of this event was also published in some online newspapers.

(Source: Website Diamond Island www.daokimcuong.com.vn)

DIAMOND CREATION’S NIGHT- OCTOBER 18

TH
, 2010
This is the 5
th
year Anniversary of BTA Company. This event were organized with large
scale and created strong impression of the luxury and unique community.
Mr. Thomas Kobbegger, Vice CEO of BTA said: "This is not only a birthday party but
also a colorful art festival with international scale. Artists brought here performances
which out of our expectation. When the Diamond Island project finished, it's residents will
have more chances to participate in events like this because our goal is to create a living
environment mixed between nature and culture."

(Source: Website Diamond Island www.daokimcuong.com.vn)
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

 Sponsorship / Co – promotion
Diamond Island project co-branding with international and luxury brands such as
BMW/Audi/Mecerdes, Hennessy It also has a special program with Kohler in designing
a special showroom for Kohler in Diamond Island.

3. After Launch: 2011 -2012
a. The Objectives:
Build up awareness and adorability of a high class community at DI in near future.
b. Message to Deliver:
Diamond Island is a thriving place for living with the ideal community for intellectual
and successful people.
Diamond Island also has the best Feng Shui and perfect environment for living in
district 2.
Diamond Island has the privilege to have an elite community of being successful and

top notch in society.
Diamond Island Luxury is your community.
PR & Marketing Strategy:
 Positioning: Diamond Island Luxury Residence
 360 Degree High Engagement Platform
 Conviction Approach
 High Engagement Platform
 Online Hub for the community – Living Next
c. Marketing Campaign:
 Advertising: via Communications materials, print ads, TV programs
In 2011 and 2012, the concept of a humane community at Diamond Island is built and all
Advertising plan follows this direction strictly. All of the advertorials (The Citizen, The
World of a Few, etc.) were to trigger the need of being a part of the humane community of
luxury and high class people.
THE CITIZENSHIP – PRINTADS SERIES




(Source: Robb Report Magazine)

THE WORLD OF A FEW – PRINT ADS SERIES


(Source: Robb Report Magazine)



PROUD TO BE THE SELECTED RESIDENTS

(Source: Robb Report Magazine)

THE PROSPEROUS FENG SHUI, THE HUMANE COMMUNITY

(Source: Robb Report Magazine)



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
THE BEST IN CLASS SERVICE FOR SELECTED RESIDENTS

(Source: Robb Report Magazine)

 Public Relations: Editorial about the projects/ corporate & Advertorials /
media releases
Diamond Island only published the Editorial in Robb Report magazine because of
the following reasons. First of all, this is the channel to reach the high class and
luxury prospects. This magazine not only well known in Vietnam but also the Asia
area – Hong Kong, Singapore, etc. so Diamond Island can create an international
look and attract more foreign investors. Other than that, all of the editorials on
Robb Report are well written, therefore the content can be used in other sources
(newsletter, brochure, sponsorship statements, etc.).
The main angle that was emphasized in this 2012 year was the specialty of The
Diamond Island community - Diamond Island is not selling the property but the
community.
 Event & Co – Branding Event:
Co-branding Event is one of the best ways for Diamond Island to go with other
famous and luxury brand (Robb Report, Bvlgari, Lua La, etc.) to position the
Diamond Island as a high end property.

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
MIDDLE OF EARTH & HEAVEN’S SONATA- May 14th, 2011
Diamond Island created an event of symphony and concert at the venue of the Diamond
Island construction site.


(Source: Website Diamond Island www.daokimcuong.com.vn)

LUALA CONCERT AUTUMN – WINTER 2011
Diamond Island sponsored for the Lua La Concert in 2011 – a string instrument orchestra
conducted by Xuan Huy. This event is the first anniversary of the fashion stores chain Lua
La.

(Source:

BEST OF THE BEST SNEAK PREVIEW – ROBB REPORT MAGAZINE –
November 30
th
, 2012
At the end of November 2012, Robb Report organized a sneak preview of Best of the Best
Fair in Diamond Island. Best of the Best Fair is based on the concept of Millionaire Fair
from Amsterdam – a fair to exhibit all of the most luxury brands in the world – a legendary
place of the Rich. This cooperation event was to show that Diamond Island is the
destination of the best and luxury world. Besides, this is the first chance to show the
completed building and public area of Diamond Island.



(Source: Robb Report Magazine)

 Sponsorship / Co – promotion
Major Successful Cooperation:
THE ASCOTT & INTERNATIONAL SOS –November 3
rd
, 2011
In order to create the credibility of the Diamond Island brand, the developer decided to
sign contract with the two best services management and concierge lifestyle corporation:
• Signing the contract with the Ascott Limited to manage furnished apartments in
Diamond Island
• Signing the contract with International SOS to provide Concierge & Lifestyle
Service for Diamond Island Citizens

(Source: Website Diamond Island www.daokimcuong.com.vn)
BALLET – THE NUTCRACKER
This is a sponsorship event of Diamond Island for the Ballet Nutcracker in November
2012. This event was organized as a community activity of Diamond Island and to
show the appreciation of the value of art and culture.



(Source: Website Diamond Island www.daokimcuong.com.vn)

• Digital Marketing:
WEBSITE
In 2011, Diamond Island launched its website with the original version in flash. Later,
they changed this flash version into the HTML version which is more flexible and
easier to manage the content with CMS system. Other than that, the 3D images are
replaced by real image of Diamond Island.

Original Launch Version 2011

New Version 2012
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LIVING NEXT APPLICATION
This is an application running on the iOS (for Ipad and Iphone) which is a platform to
connect the community and improve the service values of Diamond Island community.
This application is consider the online social network for the selected community of
Diamond Island:

(Source: Website Diamond Island www.daokimcuong.com.vn)
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III. DIAMOND ISLAND PROJECT – THE PUBLIC RELATIONS CRISIS:

On Monday March 5
th
, 2012, Diamond Island encountered the greatest Public Relations
Crisis when Tuoi Tre newspaper published news that Diamond Island has one or two
stories exceeding what had been approved by the local Department. Due to the violation,
the construction of six apartment blocks at Diamond Island site had been suspended.

This also quoted that during a site inspection on February 21
st
, 2012 – inspectors from the
municipal Department of Construction had asked Diamond Island Investor to stop work on
the entire project but the construction continued until February 28

th
. Besides, Leaders of
Binh Trung Tay Ward’s People’s Committee had said that their inspectors had conducted
regular visits to the site, but due to the insufficient manpower, they had not been able to
spot the violation in time.



(Source: Tuoi Tre Newspaper)

This crisis has created a very bad impression on all investors, current customers and
prospects. This lead to all of the marketing activities in year 2012 was not implemented as
in the old plan. Budgeting for the plan was constrained and dedicated to get over the crisis
such as lobbying the reporters and PR crisis management plan.
Another indirect crisis is that the “BTA” name of the investor was named after a
Kazakhstan bank which was also bankrupted in 2012. Therefore, in order to reduce the
crisis and avoiding another bad impression about an untrustworthy organization, the
investor decided to change the name to Kusto. Kusto is the name of the original
corporation in Kazakhstan – the investor/owner/developer of Diamond Island.
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PART 2: ANALYSIS OF THE CURRENT POSITION AND SITUATION

I. INDUSTRY ANALYSIS

1. Real Estate Market in Vietnam:

The Vietnamese real estate market has been going through cycles of up and down in
the past decade. Its most recently peaked period was between 2006 and 2010. During

that time, many positive indicators encouraged both buyers and sellers jump into the
market. According the data from the Ministry of Construction, there were more than
1000 real estate’s projects in Hanoi alone in that period, Ho Chi Minh City also
reached the record of 1400 projects almost every major city in Vietnam including Da
Nang, Nha Trang, Hai Phong, etc. helped to inflate the bubble in the market.

With all that positive signals, real estate in the period of 2006-2010 was considered by
many investors as the fastest way to make profits. It results in hundreds of real estate
companies were established. Even existing companies from different industries also
invested heavily to the real estate’s gold mine. A lot of these new companies -
especially smaller ones- did not have enough experiences in the new market. They just
went in for short term profits and could not anticipation all the complexity of the
market.

One notable example for this trend is HANIC. Even though HANIC's main business is
exporting steel, it decided to invest in real estate with 324 billion VND (VEF). After a
couple of failed projects including buying the CT1 building from The Pride project,
HANIC is having the debt of 401 billion VND in 2011 and on the edge of bankruptcy.

With a lot of capital pouring into the market, the housing value was increasing rapidly.
The price was pump up based only on some vague predictions and rumors and it soon
surpassed the actual value of a piece of land or a house. The real estate bubble was
ready to bust.

From 2010, the real estate value started the downward trend. Housing values gradually
decreased, investors withdrew money from real estate projects, and when 2011 arrives,
the market completely freezes up. There has been a kind of "stand-off" between sellers
and buyers. Real estate companies refused to reduce the price anymore as it already hit
bottom and they were suffering with great loss; however buyers also believe that the
housing price can still drop further and they decided to wait.

One reason that leads to the real estate market's bubble bust is the over-dependent in
capital borrowed from banks. Therefore as soon as banks adjust their interest rate, it
affected greatly to real estate projects and made a lot of them could not finish. Another
reason is most of the projects targeted the middle-high level of customers, therefore the
price is out of reach of most of Vietnamese customers. These high prices are alright
when the market is new and there were a lot of demands (during the 2006-2010
periods). However as soon as the financial depression hit Vietnam, the demand drop
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rapidly and investor of these projects cannot sell their remaining houses or apartments
without suffered great loss.

This results in many real estates in Vietnam having debt that they cannot pay.
According to vef.vn, STL (Song Da Thang Long company) is having a debt of 4929
billion VND in 2011, HQC (Hoang Quan Real Estate) is having a debt of 1789 billion
VND the price of these projects were dropping average 30% compared to the peak
period but still cannot find enough buyers.

According to Compareal, there are more than 4800 luxury apartments in Ho Chi Minh
City still cannot find customers. They estimate that it needs about 3-5 years to sell
these remained apartments. Mr Le Quoc Duy (CEO of Hoa Binh House) also
commented that investors are losing interest in luxury apartment as they require high
cost to build but target only a small fragment of customers.

The Vietnamese economy is slowing down in the first six months of 2012 does not
help the real estate market. The economy growth rate is only reach 4.38% in the first 6
months, the lowest rate in many years. Loan interest rates also rising creates difficulties
for both investors and buyers in real estate transactions (the loan rating rates of real
estate is currently 16% of the total loaned capital). The increasing interest rate made

real estate’s company cannot find enough money to operate and the debt become
unpaid-able debt. In the peak of the real estate balloon, only 20% money of real estate
comes from banks, 80% remains come from advanced money of buyers. Since 2010,
the percentage has been reversed; companies now need 80% money from banks to
survive.

Reuters also reported that Hoang Anh Gia Lai, one of the biggest co-operations in
Vietnam, was hit so badly by the real estate bubble burst that it had to abort 3 real
estate projects. If in 2010, 90% income of the company came from real estate, right
now it only remains 20%.

With the economy depression, the distrust of real estate buyers and bad debt from
major Vietnamese banks; it seems that the real estate market needs times to recover.
Right now a lot of companies is experiencing with restructuring to solve short term
problems. One of the solution is to increasing the percentage of budget apartments and
decrease the number of luxury ones. The problem with luxury housing in Vietnam is it
does not have an open standard. Each investor decided the price themselves and does
not look at the market. This trend confused buyers and make them do not want to take
risk at buying houses or wait for the price to decrease more.

This solution however is only for short term in the crisis. To have a stable real estate
market, we need a balanced percentage between budget, middle and luxury housing for
customers. However to the economy need to be better with lower interest rate to make
that happen.