Foreign capital to return to real estate market in 2015
Foreign capital to return to real estate market in 2015
The year 2014, which witnessed the recovery of foreign capital inflow to the real estate sector, also saw money for registered investment projects disbursed.
However, Nguyen Mai, chair of the Foreign Investors’ Association, believes that foreign investors will never lose their interest in the Vietnamese real estate market, and that the capital will come back when investors find the conditions more favorable.
The Foreign Investment Agency (FIA) has noted that foreign capital is coming back to the Vietnamese real estate market. This is the second most attractive investment sector in 2014 with registered investment capital higher by $1.2 billion than in 2013.
FIA noted that the biggest foreign investors in the real estate market are from Asia, including Hong Kong, Japan, South Korea and Singapore. Of these, South Korea is the biggest investor, injecting $7 billion into 80 projects.
Foreign investors have been penetrating the Vietnamese market by becoming strategic shareholders of listed property firms.
CBRE Vietnam reported that of the 73 listed property firms by August, 61 are foreign invested and 15 have foreign ownership ratios at over 20 percent.
In principle, realtors buy when the market decreases. Therefore, 2014 is the right time for foreign investors to hunt for projects in Vietnam. Tung Shin, Sun Wah from Hong Kong, Mapletree from Singapore and Aeon from Japan, well-known names, all have found reasonable projects to invest in.
Some new names, such as Creed Group from Japan and Global Emerging Markets (GEM) from the US, have turned up in the market. The latter has caught the special attention from the public with its $80 million investment deal in Hoang Anh Gia Lai Group.
CBRE estimates that 70 percent of the real estate investors have been present in Vietnam for many years, while the other 30 percent are newcomers.
Cao Thanh Hoang from KHM Capital, an investment fund management company, also thinks that foreign investors have bought many projects recently while waiting for the real estate market to recover.
Nam Bay Bay Company has announced cooperation with the Japanese Creed Group in implementing City Gate Towers project in district 8, HCM City.
Mai Thanh Truc, a senior executive of Nam Bay Bay, said Creed has promised to cooperate and provide finance support to Nam Bay Bay to develop three more projects in 2016-2018, including Diamond Riverside, NBB Garden II and NBB Garden III.
