Nomura Real Estate acquired Sun Wah Tower in District 1 (File photo) HCM City (VNS/VNA) - Vietnam hasbecome an attractive destination for many foreign investors largely due to thecountry’s friendly policies encouraging FDI, its political stability and strongeconomy, the latest report of US-based John Lang LaSalle (JLL) said.
Foreign direct investment (FDI)disbursements rose 8.4 percent year on year to 8.37 billion USD in the firstsix months of 2018, according to figures from the Foreign Investment Agency.
Vietnam has been taking initiatives toimprove its transparency and the country remains one of the most favorabledestinations for foreign investment in South East Asia, according to JLL’sGlobal Real Estate Transparency Index.
In the first half of this year, the realestate market continued to appeal to foreign investors and witnessed high-valuemerger and acquisition (M&A) deals in a variety of sectors such asresidential, commercial and industrial.
Joint ventures have become popular amongforeign developers who have strong financial capacity and a track record ofjoining forces with local developers who own land and have strong connectionswith the local community.
Foreign investors are from many countries,including Japan, the Republic of Korea and Singapore, with an increasing numberof groups from mainland China.
More local investors are also activelyseeking real estate deals alongside foreign investors, the JLL report said.
The year started off with the acquisitionof the Sun Wah office tower by Nomura Real Estate Development, while theresidential sector continued to be buoyant with five major M&A transactionswithin the first six months.
Investment deals in the first half thisyear were diversified with a good variety of asset and property typestransacted.
As for the market as a whole, JLL expertsexpect continued growth through most asset types.
The hospitality sector has been of interestover the past year, with new funds with foreign capital now specificallytargeting this sector.
“We expect this trend will continue inhospitality and other growing sectors such as industry and education,” said KhanhNguyen, associate director for capital markets at JLL Vietnam.
The affordable housing market is anotherkey growing sector, now drawing specialist capital sources that identify valuein these underlying fundamentals, including the growing middle class.
“We expect foreign investors to continueshowing keen interest and strong commitment in the Vietnamese real estatemarket. The market is still growing,” she added.
Both incumbent and incoming foreigninvestors are actively looking for “clean” and “clear” projects that can meettheir required returns and conditions.
Due to the strong focus on Vietnam fromregional investors, M&A activities are expected to reach new record levelsthis year.-VNS/VNA
VNA
