A booming property sector and strategic investments are drawing international attention
Vietnam’s property market is experiencing a surge in foreign investment, driven by a combination of favourable economic conditions, legal reforms, and strategic infrastructure development. In the first five months of 2024, foreign investors poured nearly USD1.98 billion into the property sector, marking a 70 percent year-on-year increase, reported VnExpress International This influx of capital highlights the growing appeal of Vietnam as a prime destination for real estate investments.
Retail real estate: A thriving sector
Vietnam’s retail real estate market is thriving, with occupancy rates in major city shopping centers exceeding 90 percent. According to The Star, the sector has shown remarkable resilience and recovery post-pandemic, with businesses strategically choosing prime locations to capitalise on opportunities.
The Vietnam Association of Realtors (VARS) reported that rental rates in Hanoi increased by approximately 10 percent in 2023, while central areas in Ho Chi Minh City maintained high prices around USD140 per square metre per month.
Global retail giants are taking note of Vietnam’s potential. Thailand’s Central Retail Corp plans to expand to all 55 provinces, while Japan’s Aeon Group aims to launch 16 projects by 2025, including several in Hanoi. Additionally, luxury and affordable fashion brands like Uniqlo, Muji, Dior, and Cartier have significantly impacted the market. VARS forecasts continued growth in the retail real estate market, driven by rapid urban population growth, rising incomes, and significant investments in transportation infrastructure.
Industrial real estate: Stability and growth
The industrial real estate market in Vietnam, particularly in the southern region, held steady in the early months of 2024. As revealed by VnExpress International in a separate report, the average land rent price in tier-1 markets in the southern region increased by 2.4 percent year-on-year to USD189 per sqm. The sector’s stability is attributed to rebounding imports and exports and an increasing influx of foreign investment.
Experts highlight the interest of tenants from high-tech industries, such as electric vehicle manufacturing, semiconductors, and green materials. This interest is expected to drive further growth in the sector. Pham Thi Mien of VARS forecasts that the industrial real estate segment will maintain its pace throughout the year, bolstered by stable socioeconomic conditions, an improved investment environment, and incentives for foreign investors.
Resort properties: A magnet for overseas buyers
Vietnam’s resort and hotel real estate market is also attracting significant foreign investment. International investors are keen on acquiring top-notch hotels and resorts in urban hubs like Hanoi and Ho Chi Minh City, shared VnExpress International. Major international hotel brands have steadily expanded their presence in Vietnam. Marriott International, for example, has signed agreements for seven additional hotels and resorts, comprising over 2,500 rooms.
Singapore-based Lodgis Hospitality Holdings, in partnership with South Korea’s Hanwha Group, plans to expand its operations, aiming to manage 10,000 rooms by 2025. The growing interest in Vietnam’s resort properties underscores the sector’s potential for recovery and long-term growth.
An optimistic outlook for award-winning developers
As Vietnam’s property market continues to attract global attention and investment, it’s also gaining recognition for excellence in development. The 9th PropertyGuru Vietnam Property Awards 2023 celebrated the country’s top developers, highlighting their contributions to the vibrant real estate landscape. CapitaLand Development (Vietnam) was honoured as the Best Developer, also taking home the award for Best Sustainable Developer. SonKim Land Corporation shone as the Best Luxury Developer, while Keppel Vietnam was recognised as the Best Commercial Developer.
Phu Long Real Estates Corporation earned accolades as the Best Mixed Use Developer, and DOJILAND Real Estate Investment Company Limited was named Best Lifestyle Developer. ParkCity Hanoi by ParkCity Group was celebrated as the Best Community Developer, and Khai Hoan Land Group Joint Stock Company received the Best Breakthrough Developer award. These recognitions underscore the dynamic and innovative nature of Vietnam’s real estate sector, further enhancing its appeal to both domestic and international investors.
In conclusion, the country’s property market is set for continued growth and stability, driven by strategic foreign investments, resilient retail and industrial sectors, and a booming resort real estate market. The government’s efforts to improve the legal framework, coupled with significant infrastructure investments, are further enhancing the market’s attractiveness. As Vietnam continues to develop its urban centres and improve connectivity, the real estate sector is poised to offer substantial opportunities for both domestic and international investors.
Know any award-worthy residential, commercial, or industrial projects in the country? Nominate them for the 14th annual PropertyGuru Asia Property Awards (Singapore) on or before 23 August 2024. To know more, visit AsiaPropertyAwards.com/Award/Vietnam/.
Gynen Kyra Toriano, Digital Content Manager at PropertyGuru, wrote this article. For more information, email: [email protected].
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