- News in Vietnam
- 28 July 2022
Attractiveness of industrial real estate to investors
Drawing nearly 3.2 billion USD of FDI capital.
According to statistics, foreign investment capital flown into Vietnam has recorded consecutive growth in the first 6 months of 2022. It is infer that investors are having faith in Vietnam investment market. Especially, real estate business has ranked second in attracting FDI with more than 3.15 billion USD, accounting for 22.5% of total registered investment capital.
The analysis has indicated the factors that attract foreign investors including increasing number of customers of middle and upper classes, along with the rapid urbanization development in the cities. Housing demand in big cities in Vietnam will thrive, said Do Duy Thanh, manager of the Investment Advisory Department.
Besides the heavy impact of the epidemic, resort real estate is considered as a potential segment for smart investors who seek for opportunities to enter the market, especially in Phu Quoc, Nha Trang, Phan Thiet, etc. In addition, with the presence of healthcare real estate market segment – an absolutely new form in Vietnam which is an atribute to investors’ better vision and ability to grasp opportunities.
In addition, residential and office real estate are greatly drawing attention from investors. This trend comes from the increasing housing demand of customers while the price is still reasonable when comparing Hanoi and Ho Chi Minh City with neighboring markets such as Singapore, Shanghai, Shenzhen, etc. not to mention the breakthrough of industrial real estate, which promises to be the bright spot of real estate in the near future.
Industrial real estate is a bright spot.
In the upcoming time, FDI inflows into Vietnam will be even more positive because foreign businesses put their trust in Vietnam and it is also one of the best epidemic prevention countries with a high vaccine coverage rate establishing a competitive position for Vietnam amongst the countries.
In addition, Vietnam has signed two new-generation free trade agreements, namely the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Free Trade Agreement between Vietnam and the European Union. (EVFTA). Vietnam has dominated with a young and dynamic workforce, high quality labor that will attract investment capital from other countries in the region.
According to Mr. Nguyen Manh Ha, Vice Chairman of the Vietnam Real Estate Association, the real estate market is picturing signs of recovery, of which it is still a bright spot in the short and medium terms.
Not only attracting foreign investment sources in industrial real estate, the Government, ministries, branches, local authorities and businesses are also interested in various types of services for the industry such as housing, accommodation for workers in industrial zones, clusters, hospitals, schools, commercial centers, amusement parks to improve and enhance the physical and mental well-being of workers. There has been a positive impact on developments in the industrial real estate segment.
The healthy pre-rent commitment in the new industrial parks is expected to grow in industrial zones with favorable locations and better advantages. Besides, sources of industry, warehouse and factory will increase in regions due to thriving demand in many fields, said Ms. Thanh Pham, Deputy Director of Research and Consulting Department.
While tenants need to seize the opportunity to achieve better terms, investors should adjust their rental strategies aligning with each location. Rents are expected to remain high in many areas, particularly ones with limited land supplies.
Source: Báo Đầu Tư