Supported by FDI inflows and infrastructure development, residential and industrial real estate will continue to be investment-attracting segments in the coming time.
In the second quarter of 2024, the residential real estate market is still progressing cautiously. In the context of many economic fluctuations and potential buyers are in a wait-and-see mentality. Investors continue to launch new projects to assess market sentiment.
For example, Masterise Homes introduced a 7.2-hectare housing project in Hai Phong, while Ecopark launched a 1.3-hectare project in Nghe An. In Ho Chi Minh City, Gamuda launched The Meadow project with 212 townhouses in the second quarter.
At the same time, Vinhomes has partnered with Japan’s Nomura to co-develop two subdivisions in the Vinhomes Royal Island project, providing 821 low-rise units. In the resort product segment, VCRE has launched 264 luxury apartments in Da Nang, in cooperation with the Nobu Hospitality brand.
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| According to experts, industrial real estate in Vietnam still has a lot of potential for development. |
A recent Savills market report shows that in the commercial real estate rental segment, rising rents and limited space are causing businesses to move out of the city centre.
Of which, Hanoi forecasts 48% of new office space will be located in central areas or emerging new urban areas such as West Lake by 2025. While Ho Chi Minh City is witnessing a shift towards Thu Thiem with new green-certified development projects.
In the second quarter of 2024, the real estate market also recorded a number of large M&A deals. One example is the cooperation between Kim Oanh Group (Vietnam) and NTT Urban Development, Sumitomo Forestry, and Kumagai Gumi Co Ltd (Japan) to develop The One World, a 50-hectare residential area in Binh Duong.
Or the deal in which Nishi Nippon Railroad (Japan) acquired 25% of shares in the 45.5-hectare Paragon Dai Phuoc Project from Nam Long Group (Vietnam) for about 26 million USD.
Next, Tripod Technology Corporation acquired an 18-hectare industrial land plot in Ba Ria - Vung Tau from Sonadezi Chau Duc.
Forecasting the market in the second half of 2024, Mr. Troy Griffiths, Deputy CEO of Savills, commented that economic challenges may continue, in the context of weak global purchasing power, geopolitical tensions and inflationary pressures, but FDI and active domestic infrastructure investment will boost the economy.
Looking ahead, a rate cut is expected later in the year as inflationary pressures ease and economic growth slows, while the regional property market is expected to gradually recover in the coming quarters. The commercial property segment including office, retail and industrial/logistics continues to drive investment volumes.
According to Mr. Troy Griffiths, the industrial real estate sector will see stable demand, supported by FDI inflows and infrastructure development. This will encourage developers to expand their portfolios.
“For example, VSIP is building a 600-hectare industrial park in Lang Son and Gaw NP Industrial is introducing nearly 100,000 square meters of ready-built factories and warehouses in Ha Nam,” he cited.
Previously, presenting at the Industrial Real Estate Forum 2024 organized by Dau Tu Newspaper, Mr. Tom Over, Director of Transportation & Industry, JLL Vietnam & Asia - Pacific also said that the industrial real estate market in Vietnam still has a lot of potential for development.
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| Mr. Tom Over, Director of Transportation & Industrial, JLL Vietnam & Asia Pacific. |
Mr. Tom Over said that in 2023, when GDP growth was low and exports decreased by 13%, power outages still occurred... affecting some industrial zones. However, at present, Vietnam's GDP has grown again, with exports increasing by 15% in the first 6 months of 2024. In terms of foreign investment, Vietnam is still one of the outstanding countries in the region.
Specifically, Vietnam, Thailand, and Malaysia are the three countries chosen by many investors. Of these, Vietnam is the country that offers the most opportunities. However, some investors choose Thailand and Malaysia because they have clarity about incentives for investors. In addition, there are licenses and labor resources. However, this expert still believes in the development of Vietnam.
“We have many opportunities to develop. JLL's research data shows that the Vietnamese market is developing a lot, especially with a lot of money flowing in. Our general message is that the journey is still very long and we are just at the beginning of the journey,” Mr. Tom Over emphasized.
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