FDI 'poured' heavily into Hai Phong, which segment benefits?

In recent years, Hai Phong has had the fastest economic growth rate in Vietnam. This locality is also an attractive destination for foreign investors.

Specifically, in the first half of 2023, Hai Phong 's gross regional domestic product (GRDP) increased by 9.9% over the same period last year, higher than the national average of 6.2%.

FDI in Hai Phong, which sector benefits? Image 1 — The increase in FDI and investment projects in Hai Phong will create demand for low-cost housing projects serving workers and experts. (Photo: HPO)

Thus, Hai Phong ranks third in the country and first in the Red River Delta. By 2025, Hai Phong is expected to account for 6.4% of the country's GDP, up from 3.9% in 2022.

In addition, as of the second quarter of 2023, Hai Phong has attracted foreign direct investment (FDI) of 1.98 billion USD, up 80% year-on-year. By the first 6 months of 2023, Hai Phong had 480 FDI projects in industrial parks and economic zones with a total investment capital of 24.85 billion USD.

According to Savills Vietnam, the increase in FDI and investment projects in Hai Phong will create demand for low-cost housing projects serving workers and experts. In addition, the hotel segment will also benefit.

In the hotel segment, the current supply of 3-5 star hotels in Hai Phong has reached more than 3,000 rooms. 5-star hotels account for 58% of the market share with 7 projects. The occupancy rate increased by 7 percentage points year-on-year and the average price reached 1.8 million VND/room/night, stable year-on-year.

In the housing market, the supply of apartments reached nearly 12,000 units from 11 projects, up 5% year-on-year. The average primary asking price was VND45 million/m2, 15% lower than in Hanoi . Since 2019, the primary price of apartments has increased by 8%/year.

From the second half of 2023 onwards, 25,100 new apartments are expected to come online. Thuy Nguyen will account for 56% of future supply thanks to its large land fund and industrial parks including Nam Cau Kien and VSIP Hai Phong.

The supply of townhouses in Hai Phong reached 6,774 units, up 5% year-on-year. Le Chan District had the largest supply, accounting for 33%. The average primary selling price in Hai Phong was VND49 million/m2 of land, much lower than in Hanoi.

Ms. Do Thu Hang, an expert from Savills, assessed that housing demand will continue to increase, greatly influenced by the development of industrial zones along with the recovery of the workforce, the growth of foreign direct investment and infrastructure improvements. As the city expands, demand for the commercial and accommodation markets will also increase.

“This creates favorable conditions for investors and developers to exploit the real estate market in Hai Phong. The fields are very diverse and attract investment participation from logistics service development, ports to investors of housing projects looking for emerging segments such as worker housing,” said Ms. Hang.

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