Google News

Record US$20.3 billion FDI drives Vietnam real estate

Must Read

Record foreign direct investment (FDI) worth US$20.3 billion in 2007 is driving Vietnam’s real estate industry, but experts have urged existing and would-be investors and developers to take a holistic approach, and support local and regional infrastructure requirements.

The cautionary advice came during keynote presentations at the Cityscape Asia conference that closed today. The three-day event at Suntec Singapore International Convention & Exhibition Centre played host to nearly 6,000 industry professionals, and is part of one of the largest b2b real estate event brands in the world.

In his presentation entitled ‘Where to Invest and What to Build in Vietnam’, Philip Atkinson, regional director of Dubai-based Limitless, who broke ground last December on their US$220-million Halong Star project, located on Vietnam’s N.E. coast, called for investors and developers to pursue an all-embracing strategy.

“Give Vietnam what it needs, responsible investment, affordable high-quality environments providing a solid base for sustainable growth,” urged Atkinson. “Although demand will continue to out-pace supply in almost every sector, supporting infrastructure is critical. This includes hard and soft infrastructure such as schools, hospitals, roads, trains, airports, communications and power stations.”

Atkinson continued, “The decision to invest in a particular sector or geographical area in Vietnam remains subject to the standard due diligence and feasibility that any investment opportunity requires. The lesson for today is to look beyond the boundary of the site being considered and appreciate the bigger picture. Ultimately, the bigger picture bears a greater influence on the viability of any project.”

Some major infrastructure projects are underway throughout Vietnam and in Ho Chi Minh City (HCMC) such as the Thu Theim bridge, four new ring roads, the new Metro project, and a 19.7 kilometre subway, but massive investment still needs to be made.

With the sub-prime issues in the United States and other parts of Europe and saturation of other more mature property markets in Southeast Asia, Vietnam still remains a lucrative proposition. With GDP growth averaging eight per cent annually, Vietnam is home to some 85 million people, 45 million of whom are under 35 years of age. So, with the ensuing urbanisation, demand for residential and commercial space is continuing to outstrip supply. That imbalance is now stoking inflation (currently running at 15.8 per cent) from skyrocketing real estate prices (rental cost of a three-bedroom apartment in HCMC is now the tenth highest in the world).

But foreign investment continues unabated. Vietnam currently attracts more overseas investment than India. In 2005, FDI was recorded at US$5.8 billion; a year later it reached US$10.2 billion; and in 2007 it virtually doubled to US$20.3 billion. Indeed, over the last 20 years Vietnam has amassed US$98 billion in FDI for over 9,500 projects.

Latest News

American home decor brand Pottery Barn Kids, now in India

Pottery Barn Kids, the American children’s furniture and décor brand's first flagship store in the country at the Jio...

Login to your account below

Fill the forms bellow to register

Retrieve your password

Please enter your username or email address to reset your password.