Vietnam Real Estate Market Appeals to Foreign Players

Tuan Minh

17:19 21/12/2015

BizLIVE - A wide array of foreign investors have been seeking to invest in Vietnam’s real estate market to capitalize on the country’s fast growing economy.

Vietnam Real Estate Market Appeals to Foreign Players

A view of housing along the Saigon river in HCM City. (Photo:

The country’s vibrant economy and the recovery of the local property market have encouraged players from around the globe such as Keppel Land, Amata Corp, Mitsubishi, Lotte and CapitaLand to expand in the Southeast Asian country’s property market, is recovering from a bubble that burst a few years ago.
Foreign investors have set footprint in the Vietnamese property market through either direct investment, joint venture or mergers and acquisitions (M&A).
Creed Group, a Japanese investment fund, has joined hands with NBB Investment Corp. and An Gia Investment to carry out some projects. The fund has pledged to buy a 20% stake at An Gia Investment, contribute capital on an equal footing and provide credit for An Gia to acquire new projects.
Denver Power, a subsidiary of Gaw Capital Partners, has partnered with Tien Phuoc Real Estate JSC and Tran Thai Lands to develop the Empire City complex with an estimated cost of $1.2 billion in Ho Chi Minh City.
Gaw Capital Partners earlier acquired four projects of Indochina Land in Vietnam, including Indochina Plaza Hanoi, Hyatt Regency Danang and two other projects underway in the central province of Quang Nam and HCM City.
U.S. investment fund Harbinger Capital, the majority investor of Asian Coast Development Ltd., has committed to invest an additional $50 million in The Grand Ho Tram Strip project, which has an estimated investment of $4.2 billion, in the southern province of Ba Ria-Vung Tau.
Singapore’s CapitaLand Ltd is looking to invest in Vietnam’s office property segment, adding to its current portfolio of residential and serviced apartments. The firm is seeking to buy completed office buildings and upgrade them, besides land, said Chen Lian Pang, chief executive officer of CapitaLand Vietnam.
The Singaporean has affirmed that Vietnam is one of CapitaLand’s key markets in Asia. The real estate market in Vietnam is supported by the country’s strong economic growth, rapid urbanization and a young and growing population.
CapitaLand is currently present in Vietnam’s four major cities namely Ho Chi Minh City, Hanoi, Hai Phong and Danang, in the residential and serviced residences sectors.
CapitaLand’s new strategy is comprehensible as the office markets in both Hanoi and Ho Chi Minh City saw stable rent price and high occupancy rates in Grade A & B in the third quarter of 2015, up to 81% and 93%, respectively, according to Savills Vietnam.
Both cities witnessed increasing demands and high supply of Grade A & B entering the market till the end of 2017, mainly in the central business district (CBD). While the office floor areas of Grade A & B in HCM City’s CBD will take up to 77% of the total supply, this number in Hanoi will be 56% in the CBD and 41% in the Western district.
Amata Corporation Plc, a leading Thai developer and manager of factory estates that has been present in Vietnam for 20 years, has announced that it will develop two mega industrial estate complexes in Vietnam, following a success with the Amata industrial park in the southern province of Dong Nai.
More foreign property investors are coming to Vietnam thanks to the steady recovery of the local economy and the liberal new laws that allow foreigners and overseas Vietnamese to buy homes in the country, property experts have said.
Vietnam’s economy is forecast to grow 6.5%-6.6% this year and projected to expand at a faster rate in the coming two years.
The recently-concluded Trans-Pacific Partnership (TPP) will give a boost to Vietnam’s real estate sector, particular the segments of office, industrial estate and high-end apartments targeting expats, experts have said.
Vietnam is deepening regional and international integration via the ASEAN Economic Community, the EU-Vietnam FTA and the TPP. Vietnam is moving to perfect its investment climate, which creates a big opportunity for the country and Amata to lure foreign investors, said Somhatai Panichewa, chief executive of Amata VN Plc.
Foreign players registered a total of $2.32 billion for 29 new and 10 operational property projects nationwide between January and November, $1 billion higher than the same period last year, data of the Foreign Investment Agency under the Ministry of Planning and Investment.


Từ khóa: HCMC, M&A, Savills Vietnam, TPP, FTA

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