Illustrative image (Photo:Ministry of Construction) The UK is known for consulting services, especially in the real estateindustry. Real estate is not only the choice of many investors but also a safeand very effective investment channel, according to Savills Vietnam, a UK realestate consulting provider in Vietnam.
"This agreement is likely to promote the expansion of UK businesses in Vietnam,and we expect interest from companies in data centres, high-tech manufacturing,financial services, high-tech services and possibly pharmaceuticals too,"Matthew Powell, director of Savills Hanoi, told VietnamNews.
"These businesses will demand real estate across the country, which couldrange from manufacturing plants or office space. There has been an increasedinterest and demand from UK companies. Vietnam has been very much on the agendaand the two countries continue to have investment conferences."
"We could see institutional investors on the commercial market withinteresting Grade A office properties like Techcombank Tower 6 QuangTrung."
With a dynamic industrial scene, Vietnam might also see players in industrialdata centres or logistics. However, we expect the focus to largely be onservices and financial services, he said.
In addition, "we expect that investment from the UK will be related to services,pharmaceuticals, engineering specialists, high-tech manufacturing, aviation,financial services, and other export industries from the UK."
Although Asian countries like Singapore and South Korea lead investment, thereare several active multinationals from the UK in Vietnam, especially in thefinancial services sector. For example, Standard Chartered launched its newhead office in Hanoi at Capital Place in June.
"Currently, interest is largely Asian based, but we could see a rise in UKcuriosity," Powell said.
On December 29, 2020, the UK and Vietnam signed the free trade agreement(UKVFTA) with an aim to pave the way for continued and increasing trade betweenthe two countries. The agreement came into effect on May 1, 2021.
As can be seen from previously signed agreements, participation in tradeagreements can bring great benefits to the investment market in Vietnam,according to Cushman & Wakefield Vietnam. A good example is the 1 billion USDcapital flow from Denmark for the Lego factory project in Vietnam, after theEU-Vietnam Free Trade Agreement (EVFTA) came into effect.
"Thus, we have high confidence that the UKVFTA will also help attract moreinvestors from the UK to Vietnam," Trang Bui, Country Head of Cushman& Wakefield Vietnam, told VietnamNews.
"The UK's property market is mature and established, their investors arethus more willing to deploy capital on assets that are already in operation,and have generated profit, with high stability and low risks," Trangsaid.
"This strategy can seem different from investors from other regions in theworld. In general, cross-border investors always need some time to adjustcapital flows and seek out the right opportunities in developing countries likeVietnam."
"To maximise the potential benefits of the UKVFTA, Vietnam needs toconstantly change and improve policies and business environment according tostrict requirements posed by foreign investors. Through this process ofcontinuous improvement and adaptation, the country's competitiveness will riseto new heights on the global investment map," she said.
As of May 2022, the UK has a total of 462 investment projects in Vietnam, witha total registered investment capital of 4.15 billion USD.
UK investors invested the most in Vietnam's manufacturing and processingindustry with 120 projects registered investment capital of nearly 1.6 billionUSD, accounting for nearly 40% of total investment capital.
The second was the real estate industry with 23 projects having an investmentcapital of 1.04 billion USD, accounting for 26% of the total investmentcapital./.
VNA
