Since the beginning of the year, the real estate in Vietnam has attracted a lot of FDI, many trillion projects have been converted into foreign investors. In the first half of 2017, the attraction of investment capital and many commercial transfer of real estate market in Vietnam is quite exciting, showing the market is still very attractive. There are many reasons to invest in Vietnam, let’s take a look on how it has been working.

Many foreign capital packs to occupy market share

Report on the real estate in Vietnam in the first quarter of 2017 by Savills Vietnam has just announced that in recent years, the rapid growth of tourists has created a large development momentum for any segment of coastal resort. In addition, in the first quarter of 2017, the real estate market in Vietnam also witnessed exciting investment activity in many segments.

One of the outstanding deals is the acquisition of a 0.6-hectare commercial land plot in a prime location in the center of Ho Chi Minh City for the purpose of constructing an international complex of type A First in Vietnam of CapitaLand Group. The project will receive a $500 million investment fund aimed at commercial properties in Vietnam, launched by the Singapore developer last November.

During the same period, CapitaLand also announced the acquisition of a 90% stake in a 0.8ha project in Thao Dien, one of the most popular residential areas in Ho Chi Minh City, to further develop 300 apartments. This move shows the strategy to investing in Vietnamese market of this investor.

In March, Hongkong Land officially became a strategic partner of Ho Chi Minh City Infrastructure Investment Joint Stock Company (CII) in buying properties in Vietnam on the land fund received in Thu Thiem new urban area. In another popular residential area of ​​the city, Anagi Investment Group and their Japanese counterpart Creed Group continued toacquire five blocks of the La Casa project in District 7 of the group.

In the segment of resort real estate in Vietnam, following the positive signs in the tourism industry is the Berjaya Land Group (Malaysia) successfully transferred all the 70% of shares held in a resort project. 4 stars on Phu Quoc Island for Sulyna Hospitality with total value of 14.65 million USD.

Vietnam tourism has had a good start this year, with about 3.2 million international visitors in the first quarter, up 29% over the same period last year. This is one of the reasons to invest in Vietnam for the investor. This growth is followed by a record number of 2016, when Vietnam welcomes over 10 million international tourists and is expected to reach 11.5 million by the end of 2017.

Great profit potential when investing in Vietnamese market

The above moves show that the real estate in Vietnam is still very attractive to foreign investors poured capital. According to CBRE’s New Asia-Pacific Investment Prospects Survey in 2017, although Asian-Pacific investors do not intend to invest more in real estate than they did last year, there is still a huge demand for high risk assets due to potential returns. According to CBRE, 37% of respondents said that, “pursuing yield margins” was the main driver of investment in real estate, up from 15% in 2016.

For the Vietnamese market, CBRE said that the interest in the Vietnamese market increased significantly thanks to the support of macro platforms and high initial yields. Typical entry forms are based on joint ventures with domestic investors.

Actual time in the market has partly proved that the above is true. Tom Moffat, Managing Director of Capital Market Division, CBRE Asia, commented: “Although the interest in overseas markets remains strong, policy volatility in the United States and Europe will making many investors in Asia Pacific more focused on intra-regional investment”.

The above moves show that the real estate in Vietnam is still very attractive to foreign investors to invest capital. Along with the large-scale urbanization process together with positive economic prospects create pressure. Developing high-level infrastructure in Vietnam, is creating a great opportunity for the development of the real estate industry.

Thang Tran – RaoXYZ