Investment in real estate in Vietnam is forecast to surge thanks to global players, who have plans to boost their foothold here, said Alex Crane, general director of Cushman & Wakefield (C&W) Vietnam.
The Vietnamese government has been supporting foreign companies to settle down their operations here, Mr. Crane added.
C&W has said in its “Asia Pacific Outlook 2056” that Vietnam will share the spotlight with the Philippines as GDP growth leaders in Southeast Asia this year.
“The combination of rapid investment growth buoyed by positive business sentiment and FDI, consumption growth fueled by solid labor markets, and a booming export sector will cause GDP to expand in the 6% range this year,” says the report.
This expected improvement has further upside potential. Vietnam will be a major beneficiary of the Trans-Pacific Partnership (TPP), which is expected to boost its economy by $33.5 billion during the next decade, roughly a fifth of the country’s current GDP.
For real estate, the implications could be profound as the country offers a very competitive manufacturing base for multinational companies (MNCs).
These positive economic developments will have a meaningful impact on the office sector, especially in Ho Chi Minh City, with the number of manufacturing MNCs and in turn business support services setting up operations here set to grow.
Source: Cushman & Wakefield.
Grade A vacancy has tightened considerably since 2013, when it hit double digits, to less than 7%. With office completions taking a breather this year, we expect Grade A occupancies to improve and rates to stabilize.
“Real estate investment has also grown and notable foreign investors, such as Gaw Capital, have increased their presence in the country,” says the report.