Foreign direct investment remains strong with the Japanese remaining big players.
Foreign direct investment remains robust. With a particularly strong appetite from the Japanese. The first six months of this year saw an increase of 54.8 percent if compared to 2016. Much of this FDI is being injected into the manufacturing sector that boasts the industrial sector. However, other sectors of property are also benefitting as as trickle down effect occurs. The manufacturing sector fuels the economy. Brings in more business that need space to operate from. Plus more employment is generated. Employees need to be housed whether that it short term in the form of hotels and serviced apartments or for long term rents.
Consequently Savills can reveal that high occupancy rates have been recorded for both office space and for the hospitality trade. Office rents are increasing with some healthy yields being achieved. But many developers appear reluctant to consider areas out of prime locations that include Hanoi and Ho Chi Minh City.
The Japanese are continuing to shape the market being involved in some big joint ventures. One example being Nishi Nippon Railroad and Hankyu Realty who are developing Mizuki Park alongside Nam Long. The 26-hectare residential project in Binh Chanh District, Ho Chi Minh City, totals an investment pot of USD 351 million. It will provide a range of housing options, in addition to sports facilities, international schools, hospitals and retail.
Another Japanese venture is that of retail giant Aeon Mall who plan to develop a mall in Hanoi with BIM Group. The second in their Hanoi portfolio that spans 16.7-hectare site and is expected to involve investment of USD 200 million. Plus local developer, SonKimLand, has achieved USD 100 million funding for their projects directly from the Japanese.
The supply of residential projects does not appear to be slowing down anytime soon. Savills have noted that the second quarter of 2017 continued to see strong interest in residential development projects. This includes actions by China Fortune Land Development Group who acquired the stake of VinaCapital in Dai Phuoc Lotus project for USD 65.3 million. This residential township project of 198.5 hectares in Dong Nai Province is adjacent to Ho Chi Minh City. Plus Vietnam’s big player VinaCapital’s 65 percent stake in the Times Square project, a mixed-use development site in Hanoi, has also been transferred to Elite Capital Resources Limited for a total consideration of approximately USD 41 million.
