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Last updated: Friday, September 21, 2018

 

Capital Flow into Asia Real Estate Surges, Vietnam Having Big Opportunities

Posted: Tuesday, August 14, 2018

According to Savills, cross-border investment in Asia-Pacific countries is reaching a 10-year high, according to data from Real Capital Analytics (RCA). Since 2007, investors have not really made a single breakthrough in the international market, but cross-border investment has changed since the recent peak months, said RCA.

In the past, capital flows came mainly from the Australian and Singapore markets, but now capital flows have also been boosted by investors from China and Hong Kong (China), said Petra Blazkova, Director at RCA.
China has had the largest buyer group in the past 12 months despite Beijing's tightening restrictions on capital flows. The consequence is that Hong Kong, despite its earlier targeting of China, eventually shifted its capital inflows into Singapore and Japan.

Singapore is the convergence of tycoons, cross-border investors in the Asia-Pacific region and its attraction is the ability to improve sustainability over time. Specifically in the past 12 months, Singaporean investors have increased capital in Australia, Japan and India.

Among major cities, Tokyo ranks first as the most active city in the first quarter. In addition, Hong Kong has also seen its biggest upswing, as the completion of its deal to sell US$2.95 billion to shopping centres through the Real Estate Investment Trust (REIT) to boost retail of the city.

Shanghai also recorded the third-highest volume of commercial real estate investment in Asia Pacific after Hong Kong and Tokyo. This result was mainly achieved through office and hotel deals.

Meanwhile, in Vietnam, the first six months of 2018 also recorded economic growth of 7.08 per cent over the same period, marking the highest growth since 2011. Real estate sector continues to receive attention. Foreign investors, with a record high of US$4.971 billion, mainly belong to the smart city project in Hanoi. The project covers 271.82 hectares with joint venture investment between four domestic investors and Sumitomo Corporation of Japan. The first phase is expected to be implemented in the third quarter of this year. Once completed, the smart city is expected to be one of the most advanced smart cities in Southeast Asia, with modern transportation systems.

Real estate market in Ho Chi Minh City also recorded continuous interest from major investors in the last quarter. In April, Frasers Property entered a conditional share purchase agreement to acquire a 75 per cent stake in Phu An Khang Real Estate, a developer of complex project located at District 2 with a value of about US$18 million.

In early June, Berjaya Land Berhad of Malaysia announced plans to transfer Vietnam Financial Centre project to Vinhomes and its affiliates, worth about US$39 million, after Vinhomes finalised nearly US$88 million for this project since March.

If the transaction is completed, Vinhomes and its subsidiaries will hold a total of 6.6 hectares in District 10 to build the complex. In addition, the investor has poured US$522 million to have 99.2 per cent ownership of 925 hectares at the International University Village project in Vietnam, which is also in the process of acquiring the remaining 0.8 percent from Berjaya.

Housing segment continues to attract domestic investors. Specifically, Xuan Mai Group successfully acquired Eco-Green Saigon, a 14 hectare project located in District 7, Ho Chi Minh City. Nam Long Corporation continues to cooperate with Japanese investors - Hankyu Hanshin Properties and Nishi Nippon Railroad to develop Akari City - a residential project of 8.8 hectares in Binh Tan District, Ho Chi Minh City.

Besides, Nam Long also started the key project, Waterpoint Township in Long An province, in June. With approximately 355 hectares, Waterpoint includes townhouses, villas, high rise apartments, hospitals, educational facilities and sports facilities.

Quarter 2/2018 also noted the notable IPO of Vinhomes JSC, the real estate development unit of Vingroup Group, attracting strong interest from local and foreign investors. GIC - Investment Fund has acquired 5.74 per cent stake of Vinhomes.

According to information from Savills, besides positive prospects for the residential segment, M & A activity will continue to be active in the field of industrial and office real estate. The industry is driven by increasing FDI inflows into manufacturing, infrastructure improvements, and competitive prospects when compared to other countries in the region.

Nguyen Hung








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