A better working city keys realty FDI

Ho Chi Minh City’s real estate market saw a robust amount of foreign direct investment in 2017, on the back of improvements in infrastructure and administrative procedures.

A better working city keys realty FDI, vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news

Tetsuo Kida, general director of Maeda-Thien Duc, a joint venture between Japanese civil engineering firm Maeda and domestic firm Thien Duc, told VIR that like in Myanmar, India, and Thailand, the property market in Vietnam starts from the improvement of the infrastructure system and residential areas. “This is really attractive for foreign investors, especially those coming from Japan.”

Maeda brings an expertise displayed in such renowned constructions as the Fukuoka Dome in Japan and the Hong Kong International Airport. The firm’s first foray into the Vietnam property market is the Waterina project in Ho Chi Minh City.

Before entering the property market, Maeda was involved in several infrastructure development projects in Vietnam. Among these were the construction of Damin Power Plant in 1997, Tan Son Nhat Airport in 2004, and the still-in-progress Ho Chi Minh City Metro Line 1.

Waterina Suites has been declared a milestone of Japanese technology and style, reaching for the high-end segment of the Vietnamese property market.

“Japanese customers have favoured high-end apartment units since the 1960s. When the infrastructure system in Vietnam improves, I do believe that apartment units will also become more popular in Vietnam,” Kida said.

Foreign direct investment (FDI) into the property segment of Ho Chi Minh City is reaching record highs, coming just shy of $1 billion in 2017, triple that reported in 2016.

According to Su Ngoc Anh, director of the Ho Chi Minh City Department of Planning and Investment, in the first 11 months, the city’s real estate sector was the biggest FDI recipient at more than $984 million, accounting for over 50 per cent of newly-registered capital investment.

“This is the biggest infusion of FDI into the real estate sector in the last 10 years,” Anh said.

Administrative improvements are also encouraging FDI into Ho Chi Minh City. According to Anh, the city authorities have been active in improving administrative procedures, such as offering e-registration for services like capital investment contribution and stock purchasing. The city has also launched software for online registration of new investment licences.

Ho Chi Minh City has been ranked third out of 50 cities worldwide for property rental growth in the recent survey “Impacts: The future of global real estate”, released by real estate consulting firm Savills.

The survey also ranked Vietnam’s southern metropolis fifth in terms of investment prospects, and second in development prospects.

Resource-rich, young, and fast-growing economic powerhouses at low risk of natural disasters are the ones to watch over the next decade, said the survey. And Ho Chi Minh City ticks all the boxes.

“This is an annual, long-running survey across a multitude of sophisticated property investors that demonstrates the strong sentiment towards Ho Chi Minh City and Vietnam as a highly favourable investment destination,” said Troy Griffiths, deputy managing director of Savills Vietnam.

“This is underwritten by the first position across all surveyed cities as buy options for office, retail, industrial, and residential assets,” he added.

The city is an attractive destination for investors mainly due to the government’s efforts to stabilise the local currency, control inflation, ease property lending regulations, and improve market access for foreigners.

Global investors prefer entering Vietnam’s real estate market through mergers and acquisitions. Many are eyeing beach resorts, serviced apartments, residential buildings, and hotels, mostly in Ho Chi Minh City, Hanoi, and Danang, Savills reported.

Chen Lian Pang, CEO of CapitaLand Vietnam, told VIR, “Investing in property in Vietnam is much better than in Singapore or Hong Kong, where investors hardly find such reasonable prices but have high estimations for both yield and profit.”

Pang said that in 2018, CapitaLand will announce four or five new developments, meeting the increasing demand of high-end apartment projects in Ho Chi Minh City.

Keppel Land, another leading property firm from Singapore, two weeks ago announced that it had acquired two prime residential sites in Ho Chi Minh City which should provide about 1,550 homes to the market, at a total cost of around $297 million.

Keppel Land CEO Ang Wee Gee said that the firm expects Vietnam’s housing demand to continue its upward momentum, supported by the country’s young population, growing middle class, and rising urbanisation. “We are confident that these two developments will be well sought after, given the limited supply of upper mid-range gated landed homes and condominiums close to Ho Chi Minh City’s central business district,” Gee said.

Source: VietNamNet

Related news items:
Newer news items:
Older news items:

Sen 1992