CBRE: 'Vietnam leads South East Asia in infrastructure spending with figure being 5.7 per cent GDP'
By Dang Hoa
September 18, 2017 | 07:29 AM GMT+7
The demand for infrastructure in Vietnam in particular and ASEAN in general is intensified due to the large-scale urbanisation and positive economic outlook. Currently, Vietnam it is leading the South East Asia in infrastructure spending, with the figure being 5.7% GDP.
Private infrastructure investment in ASEAN countries (Source: CBRE)
In September 2017, CBRE Group, Inc. (CBRE), the world’s largest commercial real estate services and investment firm, published a report highlighting various key projects in and between countries and discussing the regional connection’s influences on industries and property landscape.
The ASEAN Economic Community has its vision to liberalize its markets and improve the mobility of skilled persons between countries. Individually, countries have been building up their own infrastructure prowess. However, a challenge to the increasing infrastructure in ASEAN has been lack of private participation, with only 10% of Asia’s infrastructure investment being done by this sector.
Urban growth (% of urban population) in Vietnam has increased from 27% in 2005 to 34% in 2015, compared to 50% in Thailand; and it is currently is leading the South East Asia in infrastructure spending of 5.7% GDP. The two metro lines in Ho Chi Minh City and Hanoi are the two dominant planned infrastructure projects to foster the development of satellite economic area. Besides, such projects as Hanoi-Hai Phong Expressway, Bach Dang Bridge, Van Don International Airport, etc., would benefit Vietnam’s modern industries.
Putting Vietnam in regional context helps to evaluate potential effects of changing the dynamics of the regional economy. ASEAN’s high levels of infrastructure investment in the context of the connectivity within each country and among countries would benefit the real estate and the logistics sector in the short to mid-term. In the longer term, decentralisation within metropolitan areas and sub-national regions will provide plenty of opportunities for developers, owners and occupiers of space.
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