Real estate was the most attractive sector for foreign direct investment (FDI) in Ho Chi Minh City in the first four months of the year. (Photo: cafef.vn)
In Jan-Apr 2019, the total newly-registered and supplemented capital of domestic enterprises reached VND 270.963 trillion, equaling 96.1% over the same period last year.
Real estate is the industry that accounts for the highest proportion of registered capital, with 32.7%, followed by wholesale and retail, automobile & motorbike repair with 17%.
Foreign capital registered and supplemented into HCMC’s real estate sector also made up the highest proportion, with 46.8% of 363 projects granted investment certificates by the city government, with a total capital of $351.66 million. Meanwhile, processing and manufacturing only accounted for 6.7%, equal to one tenth of real estate.
According to the municipal Department of Planning and Investment, the British Virgin Islands was the largest investor by pouring 71.59 million USD into the sector, accounting for 43.5 percent of realty investment. The Republic of Korea came second with 19.5 percent, followed by Japan (10 percent), Singapore (5.7 percent) and China’s Hong Kong (3.4 percent).
In the four-month period, real estate business also accounted for the highest percentage of 1,320 foreign investors contributing capital, buying shares, and acquiring capital of domestic enterprises with a total value of $1.83 billion, up 30.6 percent year on year. The realty sector was the largest recipient at 24 percent of the total, while processing and manufacturing industry accounted for only 13.2%.
Experts said foreign cash flow to the sector will increase in the near future, especially after Chairman of the municipal People’s Committee Nguyen Thanh Phong said at the recent investment promotion forum that the city is seeking foreign investment in 29 urban development projects, including several condominium projects.
Commenting on the situation, Mr. Nguyen Thanh Phong, Chairman of Ho Chi Minh City People's Committee said the city needs to think about the quality of growth as well as the goal of sustainable growth.
He said: "In terms of capital, real estate business is accounting for a high proportion. In order to promote sustainable growth, the capital structure must focus on processing and manufacturing. Even at the recent conference for investment promotion, there is no project on processing and manufacturing, but real estate and service.”
Chairman of the HCM City Real Estate Association Le Hoang Chau said foreign investment in infrastructure and urban area development improves the local transport system and speeds up urbanisation rate.
However, local authorities should work to put forth investment procedures and shorten time for land clearance so the projects can be carried out soon.
Meanwhile, Director of the municipal Department of Planning and Investment Le Thi Huynh Mai said administrative reform is a key to facilitate investments of foreigners.
