HCM City (VNA) – Foreign investors are interested in Vietnam’sreal estate market, given the presence of them in almost all largesttransactions since the beginning of this year, said Vikram Kohli, RegionalManaging Director of Southeast Asia of CBRE – the worldwide leader in realestate services.

When discussing the most dynamic emerging markets globally,Vikram Kohli said that it’s hard to lose sight of Vietnam with its strongeconomic growth.

Rapid urbanisation supported by a young, growing andeducated population bode well for an economy with one of the world’sfastest-growing GDP rates, he said, citing the World Bank’s forecast of Vietnam’sGDP growth at 6.8 percent this year.

Home to Asia’s best-performing stock market in 2017 and thesecond largest retail market in 2018, much of the appeal Vietnam currentlyholds in its auspicious future, he added.

According to him, since 2015, the majority of big M&A transactionshave been championed by those investing in property development sites, followedby hotels, apartments and offices. This is a testament to the fact that thosepouring money into Vietnam are in it for the long run.

Over the last three years, foreign investment in Vietnam’sreal estate market has increased year-on-year. In particular, developers fromSingapore, Japan and the Republic of Korea have favoured development sites indowntown areas and close to Metro Line stations.

Local developers usually enter into joint venture agreementswith foreign developers on the premise of optimising decision-making in sitesourcing and project management.

Running alongside the strong demand for commercial sites isthe relative shortage of supply, which is especially prevalent in the marketfor prime retail and office spaces in Ho Chi Minh City and Hanoi.

Grade A rents in Ho Chi Minh City have risen from about 35USD per square metre per month (psm/month) in the second quarter of 2016 to 43 USDpsm/month in the second quarter of this year, which results in a healthy 23percent growth. Similar office rental growth has been observed in Hanoi overthe past two years.

In the office market, an increasing presence ofinternational firms has resulted in developing areas absorbing the overflow ofoccupants.

Another area generating solid demand is the residentialsector, and this segment of the market is expected to motivate the economicgrowth. Investors from Singapore, and China’s Hong Kong and Taiwan have shownmuch enthusiasm in the serviced apartment and condominium markets, togetherrepresenting 75 percent of total buyers in the buy-to-let market. As a whole,foreign buyers accounted for half of all successful residential deals, whichshows that foreign investors are not merely entering Vietnam to set upoperations, but also committed to keeping their money here.

This could explain the 15 percent rise in prime residentialprices in Ho Chi Minh City over the past two years, Kohli stated.-VNA