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)Hanoi (VNA) - 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 problems.
“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
VNA
