20.07.2020

CENTRAL REAL ESTATE WELCOMES OPPORTUNITIES FROM FOREIGN CAPITAL INFLOWS

The transparency of Vietnam’s real estate is increasingly improving in the eyes of foreign investors, increasing opportunities for real estate in the CBD.

According to the Global Real Estate Transparency Index (GRETI) just released by JLL, this year, Vietnam has entered the group of “semi-transparent” countries after a decade, ranking 56th on Global. This is also the second year that Vietnam ranks in terms of transparency in the eyes of foreign investors, mainly thanks to the development of the two cities, Hanoi and Ho Chi Minh City.

The development of Ho Chi Minh City and Hanoi helps Vietnam continue to rank in transparency in the eyes of foreign investors.

Positive signals from industrial property

The Global Real Estate Transparency Index has been implemented by JLL and LaSalle since 1999 to track property transparency and promote raising market standards. This year, there are 99 countries and territories, 163 city areas included in the assessment, based on 210 different transparency factors, including sustainability and resilience, health, proptech and other alternative fields.

The development of Ho Chi Minh City and Hanoi helps Vietnam continue to rank in transparency in the eyes of foreign investors.

“Over the past 10 years, Vietnam has gradually become a leading destination for the manufacturing industry in Southeast Asia and attracts a considerable amount of foreign investment,” said Stephen Wyatt – General Director of JLL Vietnam identify.

This index is also particularly important in the context of Covid-19 for global real estate investors wishing to deploy more than $ 40 billion of investment capital into the Asia-Pacific region.

JLL’s previously released report also pointed out that Vietnam in particular and Southeast Asia in general become an attractive destination for international businesses looking to expand or move out of China.

“Vietnam has remained a promising destination since the wave of factory relocation began. Although Covid-19 is causing certain difficulties in decisions as well as relocation activities, the investor is still confident to increase land prices in the first quarter of 2020 as this is an investment trend in the long term ”, Mr. Stephen emphasized.

In fact, a number of multinational companies have been planning to expand operations in Vietnam last year, in order to reduce the pressure on new tariff barriers on goods exported from China to the US and seek. market to replace rooms when prices rise. Data from the US Census Bureau shows that the volume of goods imported from Vietnam in 2019 increased by 35.6% over the same period, in contrast to a 16.2% decrease in the volume of goods imported from China. This year’s data will be affected by Covid-19’s impact on global supply chains, but production trends shifting from China to countries in Southeast Asia will continue. In the South of Vietnam, JLL recorded an increase in the number of requests to rent land and developers were more confident in deciding to increase rental rates.

Opportunities for luxury residential real estate

The wave of factory relocation out of China has not only brought joy to industrial real estate developers. The high-end housing market, especially in the central areas of Hanoi and Ho Chi Minh City, has also received positive signals to meet the needs of the group of experts and foreign workers.

According to CBRE Vietnam, the prices of luxury and luxury apartments in Ho Chi Minh City have increased by an average of 10-13% per year over the past 3 years. As for luxury apartments in the CBD, there was an increase of 40% in the period from 2017 to the beginning of the fourth quarter of 2019.

This is the real estate group that saw the strongest impact from the group of foreign investors.

In particular, downtown areas or land banks located near the metro line especially attract investors from Singapore, Japan and South Korea. Investors from Singapore, Hong Kong and Taiwan have also shown special interest in the serviced apartment and apartment market. Foreign customers account for up to 50% of the total transactions of the transfer of housing projects. This shows that foreign investors not only expand operations, but also demonstrate a commitment to a long-term presence in Vietnam.

The price of a new apartment in the central area of Ho Chi Minh City averages $ 5,500-6,500 per square meter, only a fraction of the price of a house in Hong Kong, according to Savills data. These prices are still lower compared to regional hub cities such as Kuala Lumpur and Bangkok despite much higher growth rates.

In addition, the relatively low property tax rate in Vietnam is increasingly attracting both domestic and foreign buyers. However, there are not many choices for investors as the land fund is increasingly scarce, the restriction on licensing high-rise housing construction is also the reason that the supply of this segment is very limited.

The Grand Manhattan – a rare project under construction in the heart of District 1, Ho Chi Minh City, is just a 5-minute walk from Ben Thanh metro station.

One of the rare luxury apartment projects under construction in District 1, Ho Chi Minh City today, The Grand Manhattan of Novaland is also attracting foreign capital because of its scarcity and sustainable profit potential. . The “rare and hard to find” advantage of this project is that the first residents to buy an apartment will have their own identifiable parking space – a valuable privilege that cannot be bought with money in the central core area.

Now, the market base continues to be added with a new element of opportunity, which is the good control of the Covid-19 epidemic. The wave of luxury real estate investment in the central area of Ho Chi Minh City is forecast to continue to increase strongly, to anticipate the demand for housing for foreign experts to accompany the trend of moving factories out of China

VNEXPRESS

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