Since the beginning of the year, foreign capital flows put real estate as the second-most attractive sector after manufacturing and processing.
The country clearly remains an appealing destination for international developers, given the country’s strong economic growth, rising foreign investment, and booming middle class leading to healthy demand in the market over recent years.
According to the Foreign Investment Agency, in Jan-May 2019, foreign capital flows into the real estate sector stood at $1.37 billion. FDI in the sector accounted for 16.7 per cent of the total, behind manufacturing and processing.
The figure has already surpassed the result in 2018 and is the highest ever. According to Linson Lim, President of Keppel Land Vietnam, the government has taken active steps over the past few years to strengthen the country’s economy and support enterprise growth.
He said: “We believe that Vietnam’s property market continues to offer long-term growth potential and opportunities for foreign investors, underpinned by continued urbanization and rising income levels.”
Singapore-based real estate developer Keppel Land now has about 20 licensed projects in the country, with total registered investment capital of over $3 billion. It recorded net profit of around $682.4 million last year and sold 4,440 homes, of which 900 were in Vietnam.
Keppel Land completed the development of the Saigon Centre Phase 2 and opened Estella Place in vibrant District 2 in Ho Chi Minh City, comprising 3.7 ha of gross floor area on five stories, meeting demand for prime office and retail space in the southern hub.
For example, BW Industrial has been able to secure a total of 230 ha of industrial park (IP) space, with nine projects in five key cities to satisfy the ever-increasing demand for modern logistics warehouses as well as build-to-suit and ready-built factories. It will expand by another 170 ha this year to meet rising interest from customers.
Michael Chan, Head of Sales and Marketing at BW Industrial, said: “The trend towards shifting manufacturing from China to Vietnam is presenting many opportunities for industrial real estate developers like us. Our vision in 2020 is to become the number one for-rent industrial developer in Vietnam, with a strong and expanding presence nationwide.”
Mapletree, which is another Singaporean developer, has been steadily expanding its portfolio of assets in Vietnam. It launched the design of the 27- storey V Plaza twin towers in March, construction of which will start in April next year, with the Grade A office development to have a net lettable area of about 6.6 ha when completed. Over in Ho Chi Minh City’s District 2, its high-end residential property One Verandah has been highly sought after by homebuyers and investors.
At present, Mapletree has 16 properties around the country, ranging from industrial, logistics, mixed-use developments, hotel, office, residential, and retail to serviced apartments, and over $1 billion of assets under management. Vietnam remains an attractive destination for foreign investors, said Wendy Koh, Mappletree’s Regional CEO, Southeast Asia.
