Vietnam attractive destination for foreign investors: JLL real estate firm
Vietnam has become an attractive destination for foreign investors largely due to the country's policies encouraging foreign direct investment (FDI), its political stability and strong economic growth, according to the latest report of JLL real estate services firm.
Workers at a foreign-invested firm manufacturing mobile phone spare parts in Vietnam (Photo: VNA)
Vietnam remains one of the top destinations for foreign investment in Southeast Asia, said the report.
For Vietnam's real estate market, 2018 began with the acquisition of Sun Wah office tower by Nomura Real Estate Development. Nomura acquired a 24 percent stake in the Grade A office building located in southern Ho Chi Minh City.
As for the residential sector, in March 2018, CapitaLand announced the acquisition of a 0.9 ha development site in Tay Ho district, Hanoi, for approximately 685 billion VND (29.78 million USD).
Later, in the third quarter of 2018, CapitaLand bought a 6 ha development site in Binh Trung Dong ward, District 2, Ho Chi Minh City for 1.38 trillion VND (about 60 million USD). The development is expected to yield more than 100 landed residential units by 2021.
Another property giant Frasers Property publicly announced that they entered into a conditional share purchase agreement with Tran Thai Lands Company Limited to acquire 75 percent of the issued share capital of each Phu An Khang Real Estate JSC (PAK) and Phu An Dien Real Estate JSC (PAD).
PAK and PAD are expected to undertake the development of residential-cum-commercial projects in District 2 and Thu Duc district of HCM City, respectively.
In December 2018, Berjaya Vietnam International University Town announced that it divested its entire stake of 75 percent in T.P.C Nghi Tam Village Ltd. ("TPC Village") to Hanoi Hotel Tourism Development Limited Liability Company for 1.245 trillion VND (54.13 million USD).
Real estate transactions in 2018 wera diversified with a good variety of asset and property types.
JLL expected continued growth through most asset types, including industrial and other growing sectors like education.
The industrial market will be the hottest sector in 2019, backed by the positive impact of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA), it forecast.
JLL said it expects foreign investors to continue showing keen interest in the Vietnamese real estate market.
2019 will be a reforming year for the market with more reforms of regulations taking place, though the prolonged building approval process may impact new developments this year, it added.
Therefore, sourcing "clean" and "clear" projects that are ready for development would be a challenge for investors, it said.
However, the firm believes the reform of regulations will help improve transparency, making the Vietnamese real estate market even more attractive to foreign investors, it added.
