Vietnam real estate market, which has been "frozen" in a long time, has led to a series of negative implications for the economy such as manufacturing, stalled business operation, and many seriously affected enterprises in the areas of construction materials, furniture and equipment. However, with more positive adjustment and continuity of the government in the past for a long time, the property market is gradually recovering and increasingly attracting more foreign investment.
Great opportunities
According to the report of the Foreign Investment Agency, Ministry of Planning and Investment, in the first 5 months of 2014, the registered investment of foreign investors in Vietnam is more than US$5.5 billion, given the report of both new and additional capital. Along with the first ranked areas for investment like the processing industries, manufacturing, and construction, the real estate ranks third in attracting foreign investment with 9 newly registered projects.
Japan and Singapore continue to be the top 2 leading countries and territories investing in Vietnam. Accordingly, many of projects have a total investment of up to several hundred million dollars such as Hai Ha Texhong Industrial Zone with total investment of US$215 million and the Ward 22 apartment project at Binh Thanh District, Ho Chi Minh City, contracted by the Sun Wah Vietnam Real Estate Co.,Ltd with total investment of over US$200 million. Most recently, Quang Ninh Province has announced that the Nakheel Group of the United Arab Emirates-UAE will start their investment in the Ha Long Urban and Tourism Area. The Ha Long Star project with an area of approximately 125 hectares has a total estimated investment at US$550 million.
According to the representatives of the Savills Vietnam, the foreign investors tend to focus on a number of offices, hotels and residences. In the hotel segment, the number of domestic and foreign tourists has increased rapidly in recent years as a basis for the FDI inflows focused on the hotel investment in the centers of the large cities or the coastal resorts.
Richard Yit, CEO of the GuocoLand Vietnam (S) Pte. Ltd in Vietnam, said in the recent difficult context, some investors more cautious when pouring capital into the real estate in Vietnam. But with over 20 years of experiences in the field of real estate investment, the GuocoLand still believes that theVietnam's real estate market has still a lot of potentials to grow.
Real estate market is really lucrative
According to Neil MacGregor, Managing Director of Savills Vietnam, Vietnam's real estate market with positive recovery signs is appealing a lot of investors after its bottom line. Notably, the segments of office and houses in Ho Chi Minh City are having signs of more balance between supply and demand. Although the office rents and sale of real estate have not yet increased significantly, the Savills expects this will happen in the last 6 months of 2014 and early 2015. "While Vietnam is in the bottom point of the real estate cycle, many other markets in Asia are located at the top of the cycle and can be reduced in the next few years. Vietnam is attracting investors to take advantage of the market recovery when the markets start to cool down, "said Neil MacGregor.
In view of a number of foreign investors, the reason that makes the Vietnam's real estate more attractive recently is the gradual completion of infrastructure, road connectivity among the cities and provinces. Especially, the draft that allows the foreigners to buy houses in Vietnam also helps increase demand and create incentives for investors to pour capital into the real estate market. Currently, more Singaporean investors are very interested in the real estate market in Vietnam and plan to pour capital in this sector. Only the first 5 months of the year, the total newly registered capital and additional capital from Singapore poured into projects are more than US$513 million.
Marc Towsend, Managing Director of the CBRE Vietnam, commented that the property market is moving and being warmed up. In particular, the foreign investors, especially investors from Asia, tend to pour the capital into Vietnam, which is considered a good sign for the real estate market in the near future. However, to help promote this capital flow and draw attentions of the foreign investors, Vietnam should select the appropriate investment projects for effective investment and sustainable development.
Luong Tuan
Vietnamese
