Residential, office sectors stay upbeat

VOV.VN - Residential players remained active in the fourth quarter of 2018 while office continued to be one of the most exciting property sectors across the region, as reported by real estate services provider Savills Vietnam.

residential, office sectors stay upbeat hinh 0
A simulation of VinCity Ocean Park township in Gia Lam district, Hanoi
As stated in its newly-released Vietnam real estate investment report for the fourth quarter of 2018, Savills Vietnam highlighted a number of thriving developments in the domestic market.

In particular, VinaCapital Opportunity Fund Limited (VOF) transferred 34.18 per cent interest in Green Park Estate, a 15.7-ha mixed-use development project in Tan Phu district, Ho Chi Minh City. Another VinaCapital fund – Vinaland – owns 63.47 per cent interest in the project but it plans to divest in the near future.

Meanwhile, Vinhomes, a subsidiary of the conglomerate Vingroup and a reputable local developer, announced plans for two new township projects in Hanoi, including Vincity Ocean Park in Gia Lam district and Vincity Sportia in Nam Tu Liem district. These major projects will provide a comprehensive range of facilities and parks for health, education, entertainment, leisure, and outdoor sports.

Office continued to be one of the most exciting property sectors across the region. Ho Chi Minh City enjoyed the best performance in the past five years, with average rents surging by 8 per cent on year and a very high occupancy rate of 97 per cent.

Seeing great potential in the market, WeWork, a US-based co-working space provider, entered Vietnam with its first flagship site at E-Town Central in Ho Chi Minh City.

Hanoi recorded a year on year hike of 3 per cent in average gross rent with improved Grade A performance in non-central business district (CBD) areas.

“There is massive interest from foreign investors at the moment. At the Savills Hanoi, Danang, and Ho Chi Minh offices, we are seeing many investor groups each day, mostly new entrants, who are keen to explore opportunities”, said Matthew Powell, Director of Savills Hanoi.

He revealed this interest is mainly coming from the region, including Japan, the Republic of Korea, China, Hong Kong (China), Singapore while US and European investors, and global funds are investigating heavily.

All the commercial and residential sectors are targets, said Powell, adding that most of the investor interest comes from funds who are not looking to develop, but are looking to acquire operating cash-generating assets – office properties, retail malls, 4 and 5 – star hotels.

“Looking into the future, we expect more deals in 2019 on asset, portfolio, and corporate investment level. The large number of initial public offering (IPO) valuation projects on which Savills Vietnam is working demonstrates investors’ interest in the property market.”

With many promising real estate sectors in the Vietnamese market, it is expected that investment flows will be directed to a wider variety of sectors, including opportunity assets like industrial and logistics properties, the Savills analyst said.

In 2018, Vietnam proved it was one of the world’s fastest growing economies, recording its highest GDP growth in the last ten years at 7.08 per cent year on year.

Foreign direct investment remains a key element helping to spur local economic development, with over 50 percent of newly-registered capital coming from the processing and manufacturing sector, boosting industrial real estate.

Hong Quang

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