What makes “eagles” invest in Vietnamese real estate?
In the first 4 months of the year, the amount of FDI capital registered in the real estate business increased 4 times compared to the same period last year. Among them, investors from Asia and the Middle East are the ones “spending money” the most heavily.
1.6 billion USD poured into real estate
In March 2024, Investment Newspaper reflected on the situation of foreign real estate businesses struggling to find opportunities to “invest capital”, through the article “Thai businesses ‘shudder’ at land prices in Vietnam” . However, up to now, the above problem has been resolved.
According to insiders, the business from the land of the Golden Temple mentioned in the article has decided to invest in a resort project in Khanh Hoa province, instead of Da Nang as expected. However, the negotiation process is not simple. Both the buyer and seller had to lower their expectations about the selling price in order to sign a contract.
In the case of the above Thai enterprise, although the process of finding investment opportunities did not go smoothly, the results were still “sweet fruit”. This story shows that Vietnam’s real estate market still has its own attraction in the eyes of foreign investors. This trend is even more clearly demonstrated when data on foreign investment (FDI) flows into the real estate industry are extremely positive.
According to a recent report from the General Statistics Office, as of April 20, 2024, total foreign investment capital (FDI) registered in Vietnam, including newly registered capital, registered adjustment and capital contribution share purchases, reaching nearly 9.27 billion USD, an increase of 4.5% over the same period in 2023.
The registered capital for 966 projects alone reached 7.11 billion USD, an increase of nearly 29% in number of projects and more than 83% in value. Of which, registered capital in the real estate business sector accounted for 1.6 billion USD, an increase of 4 times compared to the same period last year.
According to the Ministry of Planning and Investment, in the past 35 years, about 66.4 billion USD of foreign capital has been poured into more than 1,100 real estate projects in Vietnam. Among them, investors from Singapore, Korea, Japan… are investing “heavily” the most.
The reason why the “eagle” flew back to Vietnam
Sharing about foreign “customers” of the Vietnamese real estate market, Ms. Pham Thi Mien, Deputy Head of the Market Research and Consulting and Investment Promotion Department of the Vietnam Association of Real Estate Brokers (VARS), said that M&A (mergers and acquisitions) activities are being boosted by capital flows from Asian and Middle Eastern investors. In addition, many large investment funds are also actively approaching Vietnamese real estate businesses to seek cooperation opportunities.
“In addition to the industrial and residential real estate segments, in the first quarter of 2024, the office and resort commercial real estate segments have also begun to attract attention from investors,” Ms. Pham Thi Mien disclosure.
Talking to a reporter from the Investment Newspaper, Mr. Sopon Pornchokchai, Chairman of Thailand’s Real Estate Agents and Valuation Organization, acknowledged that Vietnam’s real estate market is relatively prominent in Southeast Asia. . This advantage is compounded by the stability and impressive growth rate of the economy . In addition, a population of up to 100 million people and not yet facing a serious aging period are also plus points, showing that the potential customer base is still very large.
“Besides, Vietnam also owns many large cities and has room for development. This is in contrast to Thailand, when almost all key projects and works are concentrated only in Bangkok. Notably, despite possessing many such advantages, Vietnam’s real estate prices have not yet reached their peak. This is an opportunity for investors who know how to seize the opportunity,” said Mr. Sopon Pornchokchai.
The Thai expert also appreciated Vietnam’s strong anti-corruption moves. This will be a factor that strengthens investors’ confidence in a safe, healthy and transparent real estate market. In addition, shortcomings in the transportation infrastructure system are also being actively completed with a series of new projects, typically the North-South expressway.
According to Dr. Nguyen Minh Phong, Former Head of Economic Research Department, Hanoi Institute for Socio-Economic Development Research, the big challenge of foreign real estate investors today is the obstacles in administrative procedures. These are painful “problems” for businesses, causing many investors to become hesitant in approaching the project. In addition, taxes, land use fees and 1/500 planning approval will also be issues that need to be adjusted to increase the attraction of “eagles” in the real estate sector.
Baodautu.vn
