Vietnam remains an attractive investment destination for institutional real estate investors and businesses.
What are the investment prospects for FDI enterprises in Vietnam in 2024 and beyond?
Mr. Matthew Powell, Director of Savills Hanoi, shared that despite facing numerous challenges, Vietnam continues to be an appealing investment destination for institutional real estate investors and businesses.
There is significant demand from investors, particularly from the region, including countries like Singapore, South Korea, and Japan, who are keen on operating commercial assets and residential projects.
Additionally, Vietnam’s advantages lie in its population, urbanization rate, and current economic growth rate, leaving ample room for further development.
Mr. Powell also noted that despite the challenges and the ups and downs of the commercial cycle, investors remain highly interested in all sectors of the Vietnamese real estate market in the long term.
Some more specialized investors focus on data centers, while others concentrate on logistics, industrial parks, and warehouses. As most FDI is related to manufacturing, international FDI tends to target high-quality production locations.
This indicates a growing demand for high-quality production areas, along with dedicated retail and hotel investors. There have been several transactions in the residential sector with Singaporean investors, commercial sector transactions in Ho Chi Minh City, hotel transactions, and logistics deals, showcasing a broad range of interests.
Mr. Matthew Powell, Director of Savills Hanoi
“While completing real estate transactions in Vietnam may still present challenges, the demand is certainly there,” said Mr. Powell. “By devoting significant time to collaborating with investors and sellers of this asset type in Vietnam, we remain optimistic and confident about Vietnam’s investment potential.”
According to the Social and Economic Development Report for April and the first four months of the year by the General Statistics Office, realized FDI in Vietnam for the first four months of the year is estimated at $6.28 billion, a 7.4% increase compared to the same period last year. This is the highest realized FDI for the first four months in the last five years.
As of April 20, 2024, the total registered foreign investment into Vietnam reached nearly $9.27 billion, a 4.5% increase compared to the same period last year. Registered new capital included 966 newly licensed projects with a registered capital of $7.11 billion, a 28.8% increase in the number of projects and a 73.2% surge in registered capital compared to the same period last year.
Specifically, the manufacturing industry received the largest new foreign investment with a registered capital of nearly $5 billion, accounting for 70.2% of the total newly registered capital. Real estate business activities followed with $1.6 billion, making up 22.5%, and other sectors with $519.6 million, contributing 7.3%.
In the first four months of the year, Singapore was the largest investor with $2.59 billion, accounting for 36.4% of the total newly registered capital. This was followed by Hong Kong SAR with $898.6 million (12.6%), Japan with $814.1 million (11.4%), China with $740.2 million (10.4%), Turkey with $730.1 million (10.3%), and Taiwan with $512.3 million (7.2%).
