Troy Griffiths, Deputy Managing Director of Savills Vietnam. (Source: savills)
EVFTA is a landmark deal and strongly promotes industrial and export sectors in Vietnam by removing 99 percent of tariffs on goods from both sides, with local industrial parks and zones to become even more under the investment spotlight, according to Savills Vietnam.
Previous reports showed Vietnam's industrial clusters and zones have been attracting attention from investors, especially those from Europe.
All real estate sectors are expected to be lucrative for investors, while industrial real estate will likely receive the most attention thanks to the relocation of factories from China and Vietnam’s recent signing of multinational trade agreements.
EU investors are showing extensive interest and the move towards a more transparent investment environment will further amplify Vietnam’s reputation. However, recent US steel tariffs against Vietnam-based producers from South Korea and Taiwan show export provenance is under increasing international scrutiny.
“More good news for Vietnam’s real estate market”. Troy Griffiths, Deputy Managing Director of Savills Vietnam, said the trade deal shows the Vietnamese Government's commitment to turning the country into a leading destination in manufacturing in Asia.
According to Griffiths, bilateral trade activities between Vietnam and the EU will certainly rise, resulting in an increase in foreign direct investment and jobs and offering more opportunities in all real estate segments.
Mr. John Campbell, who leads Savills Industrial, confirmed that EU enquiries had increased in anticipation of the deal being ratified. “By enabling the latest production technologies to be set up here and increasing workforce training, the government is actively easing business fears of viability, labor shortages, and rising costs,” he said. “Moving to a more transparent business environment will help mitigate investor concerns and improve quality standards.”
Another recent report from CBRE Vietnam also found that industrial parks will continue to thrive. Occupancy rates of between 70 and 90 per cent will remain standard, as infrastructure connectivity will play a larger role in occupiers’ location decisions.
The good times are expected to continue with the right governmental support, business incentives, and corporate interest. For the remainder of 2019 and all of 2020, industrial property supply across Vietnam is seen to benefit from production shifts from China, CBRE’s report noted.
