Attracting significant FDI investments into real estate

DNHN - The real estate industry came in second in terms of attracting FDI, with over 3.15 billion USD in investment capital, representing 22.5 per cent of total registered investment capital.

Foreign direct investment (FDI) inflows into Vietnam continued to rise in the first six months of 2022, according to the General Statistics Office. This demonstrates that international investors have a high level of confidence in Vietnam's investment climate. 

Mr Do Duy Thanh, Manager of Savills Hanoi Investment Advisory Department, stated that real estate has always been a vital economic sector in Vietnam with consistent development and sustainability when analyzing the elements that attract international investors. Not only industrial real estate attracts foreign investment, but so do homes, resorts, and healthcare.

Foreign investors are particularly interested in residential and commercial real estate. This development is due to increased client demand, yet prices remain affordable when compared to surrounding markets such as Singapore, Shanghai, and Shenzhen... It is especially impossible. not to mention the breakthrough in industrial real estate, which promises to be a bright light in the real estate business in the future.

Mr Do Duy Thanh, FDI inflows into Vietnam will increase in the next years since global enterprises continue to place their trust in the Vietnamese market. Simultaneously, Vietnam is one of the greatest epidemic prevention nations, with a high percentage of vaccination coverage - a significant benefit that offers Vietnam a competitive edge over other countries.

Vietnam, in particular, has signed two new-generation free trade agreements, notably the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Vietnam-EU Free Trade Agreement (EVFTA). As a vast market with a youthful, active workforce and progressively excellent human resource quality, Vietnam may compete with other nations in the area of FDI.

Mr Nguyen Manh Ha, Vice Chairman of the Vietnam Real Estate Association, the real estate market is recovering, with industrial real estate being a bright light in the short and medium term.

Mr Ha, in addition to attracting foreign investment capital into industrial real estate, the government, ministries, branches, local governments, and businesses are interested in various types of industrial services, such as housing for workers in industrial zones, clusters, hospitals, schools, commercial centres, and amusement parks, to improve and enhance the material and spiritual lives of workers. This has a favourable effect on the growth of the industrial real estate industry.

Mr Do Duy Thanh said FDI inflows into the real estate industry encounter several hurdles and constraints. Specifically, the amount of FDI registered in the market year after year was not dispersed as promised, owing to a variety of problems relating to the legal structure governing the project development process. As a result, implementation is delayed.

Another example is the variety of new forms of real estate that have been and continue to be of interest to many investors, such as condotels and officetels, but for which legal laws have not been completely and timely created.

PV