Phu My Hung Urban Area in District 7 of HCM City (Photo: VNA) HCM City (VNA) – The flow offoreign direct investment (FDI) into real estate in Ho Chi Minh City has followedthe same trend as with the FDI movement into the country, with the propertysector always among the top FDI recipients in recent years.
HCM City has taken the lead in FDI attractionover the last three decades since Vietnam opened its economy to the world, andreal estate is one of the sectors receiving most foreign investment.
Among major deals recently, Lotte Group of theRepublic of Korea has finalised procedures to invest 20.1 trillion VND (855.6million USD) in a project named Thu Thiem Eco Smart City in the Thu Thiem NewUrban Area in District 2.
Also in this urban area, the Empire City Towerproject with total capital of 1.2 billion USD is now under construction andexpected to complete in 2022. It is invested by a joint venture of twoVietnamese companies and the Denver Power Ltd of the UK.
Meanwhile, an over-400-million-USD project namedThu Thiem River Park is being developed by Hong Kong Land and the HCM CityInfrastructure Investment JSC.
According to the HCM City Real EstateAssociation (HoREA), property has continually ranked first in terms of FDIattraction, absorbing almost 1.5 billion USD in 2015, 1 billion USD in 2016 and1.01 billion USD in 2017.
Data of the municipal People’s Committee showthat as of the end of last year, there were 293 FDI projects worth 13.97billion USD in the local property sector, accounting for 33 percent of totalFDI in the southern city. Most of that FDI capital came from Japan, theRepublic of Korea, Singapore, Hong Kong (China), Taiwan (China), and the US.
As of the beginning of September 2018, foreigninvestors spent 4.14 billion USD on contributing capital to or buying shares atdomestic firms, and up to 48.2 percent of the sum involved real estate businessactivities.
[Hanoi’s lucrative property market attracts foreigners]
HoREA Chairman Le Hoang Chau said the FDI inflowwill remain an important source of investment in the property market in thetime to come. It will supplement the domestic capital supply for this field,which is being tightened by banks.
FDI has helped develop world-class hotelprojects in the city like Park Hyatt, Sheraton, Sofitel, Times Square and KumhoAsiana Saigon (now Mplaza Saigon).
Many insiders said foreign investors’ attentionto the real estate market of HCM City is huge. They seek opportunities todevelop housing projects in locations with convenient access to the city’scentre or to purchase projects already put into use to gain a stable moneyflow.
CBRE Vietnam said the local property market isnow very attractive to foreign investors thanks to the city’s fasturbanisation, young population, stable economy with extensive integration, and agrowing middle class. Meanwhile, the market is increasingly transparent,allowing investors to easily access information about the market, legalframework and project licensing procedures.
Explaining the FDI influx into real estate,HoREA Chairman Chau said the State has revised policies and law, allowingforeign investors to invest and trade in property in the same way as domesticinvestors do. Notably, they can buy and own houses at commercial housingprojects after legally entering Vietnam.
Echoing the view, Director for investment atSavills Vietnam Su Ngoc Khuong said the presence of foreign investors iscurrently a trend in the property market. The local market is showing greatattractiveness to foreign investors, not only in terms of profit but alsoeconomic growth, the policy on foreigners’ house ownership, and incentives forforeign investments. –VNA
VNA
