Global Investors Look for Opportunities in Vietnam’s Real Estate Market: JLL

 Investors are looking at Southeast Asia for 2017, in particular Vietnam, according to JLL.


                                      A view of the center of HCM City. Photo: Internet

International are looking at the real estate in Southeast Asia for investment opportunities next year, particularly Vietnam, Stuart Crow, head of Asia Pacific Capital Markets at Jones Lang LaSalle (JLL), has said in a release. 

The country’s real estate sector saw a 12% year-on-year increase in investment. “It is forecast to grow with favorable conditions such as greater market transparency and a projected GDP growth of about 6%, in keeping with growth rates this year,” Crow noted.

Reviewing the investment landscape in 2016, Crow observed that new investors including large sovereign funds, pension funds or Chinese insurance companies have been attracted to Asia and are allocating capital to real estate.

“The overall commercial real estate investment market should remain stable in 2017, as we expect continued institutional appetite for real estate in the region but an ongoing shortage of stock,” he forecast.

Regina Lim from JLL Capital Markets Singapore Advisory & Research team said in a note last month that Vietnam’s residential real estate market was heading for further expansion thanks to robust foreign investment, positive local demand and relaxed regulations on overseas home ownership.

In addition, several developers in Ho Chi Minh City tipped that they were making earnings before interest, taxes, depreciation and amortization (EBITDA) margins of 25-30% on prime and mid-end residential projects.

“As confidence in the Vietnamese economy has grown, interest in property investment has gradually been revived since 2013,” said Lim.

Lim expected overall apartment prices in the Southeast Asian country to rise by 5-7% per annum in the next three years, supported by strong absorption and affordability levels with mid-tier and affordable apartment prices likely to rise by up to 10% per annum.

A recent report by the Hanoi-based Central Institute for Economic Management (CIEM) showed that foreign direct investment (FDI) into the real estate sector was slowing down this year.

FDI into this industry totaled $741 million in the 11 months through November, down 44% year-on-year and accounting for just 4.1% of total FDI in the country in the period, according to the Foreign Investment Agency under the Ministry of Planning and Investment.

Tuan Minh / BizLIVE