What is the current 'taste' of foreign investors in Vietnam?

TPO - Foreign investors are shifting to industrial park and office projects, which are projects that are in operation, have clear legal status and are ready to conduct mergers and acquisitions (M&A).

TPO - Foreign investors are shifting to industrial park and office projects, which are projects that are in operation, have clear legal status and are ready to conduct mergers and acquisitions (M&A).

Recover

According to Savills Asia Pacific Investment Report for Q3, Vietnam recorded some bright spots in investment activities amid a stable economy. Foreign direct investment (FDI) continued to play an important role, with registered FDI reaching US$20.52 billion by the end of August - up 7% year-on-year. Disbursed FDI was estimated at US$14.15 billion, up 8% year-on-year.

“Vietnam’s economy is expected to grow by 6.1% this year, with inflation forecast at 4.5%. Foreign direct investment increased by 7% year-on-year, supporting industrial real estate, while international tourism and the retail sector show promising signs of recovery,” said Troy Griffiths, deputy managing director of Savills Vietnam.

AEON Mall continuously expands its operations in Vietnam.

Steady annual FDI growth is the main driving force behind Vietnam’s industrial real estate sector. Currently, the country has 33,000 hectares of industrial parks for lease, with an occupancy rate of around 80%.

For the retail and consumer sectors, despite an expected slowdown in domestic spending, the retail market still recorded strong performance due to limited retail space and a growing middle-class consumer class.

In the third quarter, Savills recorded that a Japanese retail giant had acquired a 10.5-hectare land plot in Thanh Hoa to build the largest commercial center in the Central region and had its 1/500 master plan approved in Bien Hoa, Dong Nai .

How does it taste?

Ms. Tran Thi Khanh Linh - Deputy Director of Savills Investment Consulting Department - said that the Vietnamese market has always been a place with high growth opportunities with sustainable FDI flows and strongly developing infrastructure, thereby increasing demand for most real estate segments such as housing, industry, commercial offices... This contributes to the attractiveness of the Vietnamese market to investors.

“The laws related to the real estate market that came into effect last August have created confidence for investors in a stable and transparent legal environment, helping to shorten the time for legal approval, helping investors clearly determine the initial investment costs (land use costs), thereby making real estate investment projects more attractive,” said Ms. Linh.

According to experts, investors now have many opportunities to M&A potential projects or cooperate with local partners to develop large projects. Diverse market demands attract different investment tastes.

“The demand from foreign investors for residential real estate projects is still very large, no less than the demand for industrial park and office projects. For foreign investors, they always require real estate projects to have clear legal status and be ready for development,” Ms. Linh shared.

Most investors require projects to have a detailed 1/500 planning plan, and many investors even require projects to have a notice of land use fee payment. Meanwhile, recently, legal approval of projects has slowed down due to the change of many laws related to the real estate market.

“Recently, the supply of residential real estate projects has been quite limited. Therefore, foreign investors have shifted to industrial park and office projects, which are projects that are in operation, have clear legal status and are ready, making it easier to conduct M&A,” Ms. Linh analyzed.

Duy Quang

Source: https://tienphong.vn/khau-vi-nha-dau-tu-nuoc-ngoai-tai-viet-nam-hien-ra-sao-post1689559.tpo