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Foreign investment in real estate sector in HCMC spikes after years of dormancy

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New World, Diamond Plaza and other imposing construction works are considered symbols of a dynamic HCM City.

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They were all all developed by foreign investors.

According to the Foreign Investment Agency (FIA), in the first four months of 2018 alone, Vietnam licensed 883 foreign invested projects with total investment capital of $3.55 billion. Of this, $807.5 million worth of capital was registered to develop real estate projects. 

To date, the real estate sector had attracted $51.3 billion worth of FDI.

In mid-April, at a working session with HCMC Mayor Nguyen Thanh Phong, CEO of Lotte Asset Development Lee Kwang Young showed Lotte’s determination to develop Thu Thiem Eco Smart City in Thu Thiem new urban area in district 2.

Thu Thiem Eco Smart City is a smart complex covering an area of 7.45 hectares which has estimated investment capital of VND20.1 trillion, which doesn’t include expenses on site clearance. 

Also in Thu Thiem, another huge project is under implementation – an observatory tower, Empire City, with the investment capital of $1.2 billion. 

The project is developed by a 50/50 joint venture between two Vietnamese companies - Tien Phuoc Real Estate JSC and Tran Thai Real Estate Co Ltd, and one foreign partner – Denver Power Ltd.

VRG Riverview, a project of the Vietnam Rubber Group, which was frozen for a long time, is expected to have a new face as it has been taken over by CapitaLand at the price of $51.9 million. 

The new owner has been accelerating construction and the shape of a sizeable complex has become more visible.

Prior to that, in late 2017, Jimiro Construction from South Korea and Dai Tan Phu from Vietnam announced the investment in the triangle land plot of Tran Hung Dao, Pham Ngu Lao and Nguyen Thai Hoc streets in district 1. 

It is expected that three multi-storey buildings, one 5-star 30-storey hotel and an A-class 10-storey shopping mall, capitalized $500 million will rise in the area. 

Analysts say that Vietnam’s and HCMC’s real estate markets have been developing in a stable way in recent years, especially after the real estate crash in 2007.  

The stable development of the market is partially attributed to the presence of FDI capital.

In the last two years, in the context of the strong discovery of the real estate market, many projects kicked off again after a long period of hibernation. 

Su Ngoc Khuong from Savills Vietnam commented that unlike previous years, when foreign capital flowed to Vietnam under FDI, the capital now enters Vietnam through M&A deals. 

The new capital flow goes directly to projects, and the projects are implemented soon after the M&A deals.

 

 

Source: VietNamNet

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