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Foreign capital in real estate sector reaches record-high

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One of the six large-scale FDI (foreign direct investment) projects registered in the first 10 months of the year is the smart complex in Thu Thiem Urban Area in district 2, HCM City with investment capital of $885.85 million.

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The Vietnamese real estate market is attractive in the eyes of foreign investors

 

Of the 19 business fields which most attract foreign investment, real estate ranks third with registered capital of $2.04 billion, accounting for 7.4 percent of total FDI capital in Vietnam in the first 10 months of the year.

HCM City is leading the country in foreign investment in the real estate sector. By the end of October, the city had attracted $5 billion worth of FDI, of which capital in real estate projects accounted for 32.9 percent.

In October alone, the market witnessed a series of cooperation deals between Vietnamese developers and foreign investors.

These include the cooperation deal between Nishi Nippon and Hankyu from Japan and Nam Long Investment JSC to build Mizuki Park residential quarter, a $351 million project covering an area of 26 hectares in Binh Chanh district. The deal of Son Kim Land attracting $100 million worth of capital from Japanese investors also caught public attention.

Meanwhile, Dong Nai and Long An provinces have attracted foreign capital in industrial property, mostly from Japan, Taiwan and Singapore.

Commenting about the reported figure of $2 billion funneled into the real estate market in the first 10 months of the year, Su Ngoc Khuong from Savills Vietnam said this shows the attractiveness of the Vietnamese market.

A finance expert said that listed real estate companies only show a part of the real estate market in Vietnam. Foreign investors are interested in real estate shares but don’t have opportunities to buy them because the foreign-ownership ratios at most of the best-known real estate groups such as Vingroup, Novaland and Khang Dien have nearly hit the ceiling.

In a report released in August, Jones Lang Lasalle predicted that foreign capital in the real estate sector may reach a high record in 2017 and 2018. In large urban areas, housing real estate is the lucrative area for investors.

A report by Savills Vietnam shows that HCM City and Hanoi have a relatively high number of new families, 58,000 and 42,000, respectively, thus leading to increased demand for houses.

Some economists think FDI into the real estate sector should not be strongly pursued by Vietnam. In many cases, foreign investors register projects in Vietnam but don’t bring foreign capital to Vietnam.

 

 

Source: VietNamNet

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