BizLIVE - Many foreign investors are looking to enter and increase their presence in Vietnam’s real estate market, according to Jones Lang LaSalle Vietnam.
Foreign Groups Try to Gain Foothold in Vietnam Realty Market: JLL
Stephen Wyatt, country head of Jones Lang LaSalle (JLL) Vietnam.
Foreign players have been circling Vietnam for some time with many groups kicking the tyres and trying to understand how to gain a foothold in the real estate market, said Stephen Wyatt, country head of Jones Lang LaSalle (JLL) Vietnam.
Activity within the industrial sector has improved with many companies looking to enter Vietnam, due to low labor costs and improving infrastructure. This sector will have a further boost when a number of trade agreements take effect, he noted.
More transactions are now being registered, with Japanese groups leading the way, he said in a note released Thursday.
With the economy back on track, the property market has gathered momentum over the past 18 months, predominantly focused around the residential sectors in the major cities, such as Ho Chi Minh City and Hanoi.
Residential sales in each city recorded all-time highs in the first quarter of 2016 (Q1/2016) reaching some 9,000 units and 8,000 units, respectively. Grade A office rents in HCM City are increasing due to lack of supply and increased demand, vacancy rates across all grades are down to 6%, last achieved in Q4/2008.
The retail market remains a mixed bag with some centers performing well, notably Vivocity, Crescent, Lotte and AEON. Many new international brands are looking to enter the market including Zara and H&M.
The hotels and hospitality sector is also experiencing a resurgence with many hotels in CBD locations reporting strong occupancy rates and a large number of new operators entering the market, especially in coastal areas such as Da Nang, Nha Trang and Phu Quoc.
The economy has improved significantly over the past 24 months with GDP growth for 2016 projected at 6.8%. If achieved, this would be the second fastest growing economy in the world, behind India, the executive stressed.