The real estate sector continued receiving robust interest from foreign investors by ranking first in the contribution to FDI registration with over $4.9 billion, in which the Smart city project in Hanoi accounted for the majority, according to Savills.
The leading real estate services and consultancy firm announced that in the first six months, Vietnam economy expanded 7.08 per cent year-on-year, illustrating the highest first-half growth from 2011.
Particularly, this mega project covering 271.82 hectares, is jointly invested by four local investors and Japan’s Sumitomo Corporation.
The first phase is planned to begin in the third quarter of this year and is to be developed by a Sumitomo – BRG Group joint venture. Once completed, the Smart city is expected to be one of the most advanced smart cities in Southeast Asia with a modern transport system.
The property market in Ho Chi Minh City also witnessed the strong interest of major players in this quarter.
Frasers Property entered into a conditional share purchase agreement to acquire 75 per cent of the issued share capital of Phu An Khang Real Estate, which owns a mixed-use development plot in District 2, for circa $18 million in April.
In early June, Malaysia’s Berjaya Land Berhad announced their proposed disposal of the Vietnam Financial Center project to Vinhomes and its affiliates for approximately $39 million, following Vinhomes’ capital contribution of nearly $88 million to the project back in March.
Upon completion of the transaction, Vinhomes and its affiliate will fully own the 6.6-hectare project in District 10 for mixed-use development.
In addition, Vinhomes and its affiliates also injected approximately $522 million as capital contribution and accordingly owned 99.2 per cent interest in the 925-hectare Vietnam International University Town project, and was in the process of acquiring the remaining 0.8 per cent stake from Berjaya.
The residential sector was still the focus of local players. Xuan Mai Corporation successfully acquired Eco-Green Saigon, a 14-hectare project in District 7, Ho Chi Minh City.
Nam Long Group continued their cooperation with Japanese investors, Hankyu Hanshin Properties Corporation and Nishi Nippon Railroad to develop Akari City, a 8.8-hectare residential project in Binh Tan District, Ho Chi Minh City.
Besides, Nam Long also kicked off their key project, Waterpoint township in Long An province in June. Covering 355 hectares, Waterpoint consists of townhouses, villas, high-rise apartments, mixed-use complex, hospital, education and sports facilities.
The second quarter of 2018 also recorded the notable initial public offering (IPO) of Vinhomes JSC, the residential property development unit of Vingroup, drawing strong interest from domestic and foreign investors, including GIC which acquired a 5.7 per cent stake as Vinhomes’ cornerstone investor.
Aside from the positive outlook for the residential sector, Savills expects outstanding M&A performance from both the industrial real estate and office sector. The industrial sector is fuelled by growing FDI which are injected into manufacturing, improved infrastructure and a competitive outlook when compared with other countries in the region.
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