Foreign capital is continuously pouring into the Southern real estate market, leading to the emergence of a series of new real estate projects in the last months of 2024 and beyond.
Foreign capital pouring in
According to the report of the General Statistics Office (Ministry of Planning and Investment), foreign direct investment (FDI) in Vietnam continued to increase in the first 8 months of 2024. Specifically, the newly registered capital source had 2,247 licensed projects with a total registered capital of nearly 12 billion USD, an increase of 8.5% over the same period last year in terms of the number of projects and an increase of 27% in terms of registered capital. Of which, the real estate sector reached 2.4 billion USD, accounting for 20%.
If including newly registered capital and adjusted registered capital of licensed projects from previous years, registered FDI capital for real estate business activities reached 2.55 billion USD, accounting for 14.4%.
Mr. Troy Griffiths, Deputy Managing Director of Savills Vietnam, assessed that FDI capital flows into Vietnam have been quite strong in the past 3-4 years. That capital flow has now begun to permeate and
FDI projects have begun implementation.
For example, recently, TT Capital Investment Joint Stock Company and two partners from Japan, Cosmos Initia (member of Daiwa House Group) and Koterasu, cooperated to develop affordable housing products in Binh Duong and neighboring provinces.
This joint venture announced that it will invest about 150 million USD in the next 5 years, aiming to bring thousands of low-cost apartments to the market each year. To date, this joint venture has completed its capital contribution to the AVIO TT Project in Di An City with a scale of nearly 2,000 apartments, selling price under 2 billion VND/apartment, likely to be launched in the third quarter of 2024.
About 15 years ago, FDI capital mainly focused on the high-end housing segment, but now, tastes have changed, as foreign enterprises mainly target the mid-range segment for investment.
It is known that Kim Oanh Group has also recently joined hands with three leading corporations from Japan, including Sumitomo Forestry, Kumagai Gumi and NTT Urban Development Company to plan to implement a 1 billion USD urban project in Binh Duong.
Not only that, in the coming time, this joint venture also aims to develop a series of other projects with prices in the mid-range and low-end segments.
Or Bcons Group is joining hands with an international partner, Asset Limited from Thailand, to develop 11 housing projects, with a total of nearly 9,000 apartments in the affordable segment in the Binh Duong market. Most recently, this investor announced a plan to develop more than 2,000 social housing units on Thong Nhat Street (Di An City) in 2025.
Not long ago, CapitaLand broke ground on a 19-hectare housing project, offering 3,500 products to the market in Binh Duong. It is known that this is the largest-scale project and has the most "affordable" price among the series of products that this investor is implementing in Vietnam.
Most recently, in August 2024, Daewoo E&C Company (Korea) decided to invest an additional 105 million USD to develop a real estate project in Dong Nai. Specifically, Daewoo E&C will cooperate with Taekwang Vina Company to jointly invest in developing the Long Tan Phu Hoi Urban Area Project (commercial name Fo;Res Centerm) in Nhon Trach, Dong Nai. This urban area has a scale of more than 55 hectares, located right in the center of Nhon Trach district. Fo;Res Centerm is implementing architectural design, preparing to start construction of infrastructure and selling phase I with 306 low-rise villas, including product types such as garden villas, single villas, shop villas, shophouses, townhouses.
In July 2024, Nova Service Group, a member company of NovaGroup, announced that it was negotiating with a Korean enterprise to develop the NovaWorld Phan Thiet Project.
Meanwhile, Electronic Tripod Vietnam Co., Ltd., a subsidiary of Tripod Technology Group (Taiwan), acquired an 18-hectare industrial land plot in Ba Ria-Vung Tau from Sonadezi Chau Duc. In addition, Nishi Nippon Railroad (Japan) acquired 25% of the shares of the 45.5-hectare Paragon Dai Phuoc Project from Nam Long Group for about 26 million USD.
Foreign investors' tastes have changed.
Ms. Trang Bui, General Director of Cushman & Wakefield Vietnam, said that about 15 years ago, FDI capital mainly focused on the high-end housing segment and mainly in Ho Chi Minh City, but now, this taste has changed, as foreign enterprises mainly target the mid-range segment for investment. Also according to Ms. Trang Bui, from the end of 2023 to the first half of 2024, the market recorded 16 mergers and acquisitions (M&A) deals in the real estate sector. Foreign investors are mainly looking for clean land funds, good quality, real value and complete legality, with great potential for future development.
Mr. Keisuke Muraoka, representative of Cosmos Initia Joint Venture from Japan (currently investing 150 million USD in TT Capital Company to develop a real estate project in Binh Duong) said that when deciding to choose Vietnam to invest, the investor had carefully researched the market and its potential. Specifically, Vietnam possesses many favorable factors to support the sustainable development of the real estate market; stable economic growth and rapid urbanization create increasing demand for housing and related services; strong investment in infrastructure, including transportation, electricity, water and public utility projects, helps improve the quality of life and increase real estate value.
Vietnam is also implementing policies to encourage investment and improve the business environment. This not only creates favorable conditions for investors, but also promotes market development. In addition, the rise of the middle class, the expansion of international cooperation, and global economic integration also play an important role in attracting investment capital and ensuring sustainable development for the real estate market in the future.
“In developing real estate projects, the most important factor is that the project has the ability to attract buyers with real housing needs and in the South. Mid-range product lines are the most feasible for development. In addition, besides ensuring legal progress, we pay special attention to factors such as location, amenities and living environment around the project. For partners, we look for units with a lot of experience in housing development and reputation in the market to join hands in investing in developing the project together,” said Mr. Keisuke Muraoka.
Dr. Su Ngoc Khuong, Senior Director of Savills Vietnam, said that the Vietnamese real estate market is very attractive to foreign businesses. If in the past, investors from Singapore, Japan, Korea, and Hong Kong were the largest investors, now Vietnam is becoming an attractive destination for Chinese businesses with a focus on the industrial real estate segment.
According to Mr. Su Ngoc Khuong, when investing in Vietnam, foreign investors will choose enterprises with clean land funds and brands. For example, in recent times, enterprises such as Novaland, Phat Dat, An Gia, etc. have always been targeted by foreign enterprises to negotiate capital injection for project development.
Another new point of the current investment capital flow, according to Mr. Khuong, is that recently, the transport infrastructure connecting the neighboring provinces with Ho Chi Minh City has been strongly developed. Meanwhile, the land fund and legality in Ho Chi Minh City are quite difficult for launching new projects, so foreign enterprises have changed their investment direction, focusing on finding enterprises with land funds in provinces such as Dong Nai, Binh Duong, Long An ... to invest in project development.
Source: https://baodautu.vn/batdongsan/von-ngoai-do-bo-vao-bat-dong-san-phia-nam-d225353.html
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