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FDI inflow promises bright prospect for property sector

The flow of foreign direct investment (FDI) into property in the first months of 2019 promises to bring many new opportunities for the real estate market.

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fdi inflow promises bright prospect for property sector hinh 0
The D’Capitale apartment blocks on Tran Duy Hung street in Hanoi (Photo: VNA)

In January and February, foreign investors poured money into 18 fields, with processing and manufacturing attracting 6.93 billion USD, or 81.8 percent of total registered capital. Property ranked second with 478 million USD, 5.6 percent of the total.

The Ho Chi Minh City Real Estate Association said in recent years, property has been among the top magnets for FDI, which has become a very important source of funding as capital flow from domestic banks has slowed in recent years.

Chairman of the association Le Hoang Chau said FDI is not only an additional source of funding for the real estate market, it also creates many opportunities and value for property firms.

Economist Nguyen Tri Hieu said over the last three years, FDI inflow into Vietnamese real estate has been increasing. Investors from Singapore, Japan and the Republic of Korea have paid attention to downtown areas of big cities or areas near important transport facilities like metros or elevated railways.

Several bottlenecks in terms of legal procedures have been removed, boosting the market’s investment attraction. Additionally, many businesses have reformed to be listed on the stock market and partner with foreign investment funds to carry out projects.

Insiders said foreign investors in Vietnam’s property market can be divided into two groups. The first one is interested in money-making real estate like office buildings, shopping malls, serviced apartments and hotels in downtown areas, while the second focuses on housing.

Jones Lang LaSalle (JLL) Vietnam said there is an FDI wave worth hundreds of millions of USD ready to flow into the country’s property sector.

The real estate services firm said the country welcomed 15.5 million foreign visitors in 2018 and targets the number at 20 million in 2020. Additionally, Vietnam is also stepping up infrastructure development, including 2,000km of new expressways, metro systems in Hanoi and HCM City and airports.

Therefore, it is not a surprising thing investors and property developers are ready to pour money into this fast-growing market, JLL noted.

Experts expect the local property sector will continue recording growth in almost all segments, with industrial real estate the hottest in 2019, driven by the relocation of factories from China and the positive impacts of trade agreements.

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VNA

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