Vietnam’s real estate market continues to show strong appeal to foreign investors despite global economic difficulties.
The foreign direct investment (FDI) into Vietnam's real estate market in 2022 rose by over 70% yearly to US$4.45 billion, focusing on industrial and large-scale commercial projects, according to the Ministry of Construction (MoC).
|Real estate projects in Hanoi. File photo|
The MIC's report suggested that real estate stands second among sectors with the highest FDI attraction in 2022, which showcases "the strong appeal of the market to foreign investors amid a difficult global economic environment."
Neil MacGregor, Managing Director of Savills Vietnam, echoed this view by saying foreign investors remain attracted to Vietnam, especially in production, retail, logistics, and real estate.
He expected the attention from foreign investors would help the local real estate accelerate the recovery process this year.
Regarding this sentiment, HSBC in its latest report said Vietnam remains an attractive destination in ASEAN for foreign investors. It referred to the fact that traditional tech giants such as Samsung and LG have announced expansion plans, with an investment worth $2 billion from the former and $4 billion from the latter, to deepen supply chains in Vietnam.
Meanwhile, it has also been reported that Apple will start making MacBooks in Vietnam by mid-2023 with an investment of more than $300 million. The move followed its supplier Foxconn’s decision to lease 50.5 hectares of land in Bac Giang last August with an investment of more than $300 million.
Data from the Foreign Investment Agency, under the Ministry of Planning and Investment, revealed that, as of December 20, the total number of valid foreign investment projects in the sector was 1,072, for a combined value of US$ 66.3 billion, representing 15.1% of the total FDI commitments accumulated in the country.
Last year, major real estate projects in the country were the $500-million smart city project in Binh Duong financed by CapitaLand (Singapore) and local infrastructure development Becamex.
Another property developer from Singapore, Keppel Land, signed in 2022 an agreement to acquire a 40% stake worth $119 million in three land plots in Hoai Duc District, Hanoi from Phu Long Real Estate Company. The Singapore-based firm aims to invest in an apartment building project with nearly 1,020 units.
In August 2022, property developer Novaland announced a loan agreement of $100 million from Singapore's investment fund Credit Opportunities III Pte, along with another investment of $250 million from the Warburg Pincus-led consortium.
“With Southeast Asia among the most attractive region for foreign investors, Vietnam, along with Singapore and Malaysia, whose manufacturing sector is a key growth pillar, is taking the lion's share in the region,” stated HSBC.
Hanoi plans to attract $30-40 billion worth of FDI and disburse 70% of them in 2021-2025. The city is accelerating the construction of new industrial parks and clusters to fulfill the plan of building two to five industrial parks during the period, said Vice Chairman of the Hanoi People’s Committee Nguyen Manh Quyen.
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