Real estate sector expects record FDI in 2018
FDI flows into real estate have been very high so far this year, and a new record is expected to be set in 2018. (Photo: thanhnien.vn)
Foreign direct investment (FDI) flows
into real estate have been very high so far this year, and a new record is
expected to be set this year.
According to the Ministry of Planning and
Investment, 1.255 billion USD has come into the sector.
“The real estate market has mostly
attracted FDI through M&A activities,” Nguyen Hoang, R&D director, DKRA
Vietnam, told Dau Tu (Vietnam Investment Review) newspaper.
“It is more and more popular as it can
combine foreign investors’ strength in finance and experience with local enterprises’
huge lands and knowledge of the local investment process.”
This year, investors are expected to start
a series of projects on lands they had bought last year, such as Dai Phuoc Lotus
in Ho Chi Minh City, which was bought by the China Fortune Land Development
from investment funds: VinaLand Limited and VinaCapital Vietnam Opportunity
Fund Limited last April; Future Otis Hotel in the central city of Nha Trang by
Taiwanese P.H Group; and apartment projects in HCM City by CapitaLand.
Nguyen Thi Van Khanh, investment director,
JLL Vietnam, said: “FDI in real estate will set a new record this year. It will
be not only for building apartments and housing but also commercial real estate
such as grade A office buildings which could potentially bring in high revenues
of 7-8 percent a year.”
Foreign investors also focused on hotel
projects, she said.
“Foreign investors are looking for ‘clean’
lands in good locations for their development plans.”
Dr Su Ngoc Khuong, investment director,
Savills Vietnam, said: “FDI in real estate will help enterprises reduce their
dependence on banks.”
Some economists warned about a possible
downside, pointing to the fact that in previous years, many enterprises had
attracted foreign investment but had not been adequately prepared, leading to
“HCM City’s real estate market has received
a record number of foreign investors, mostly private funds, which would like to
quickly complete projects,” Su Ngoc Anh, director of the city’s planning and
investment department, said.
Last year, FDI in real estate was worth 8.5 percent
of the city’s total FDI of 3.05 billion USD. - VNA