Vietnam: Still irresistibly attractive to foreign investors, mostly via M&A

By Dang Hoa - Aug 23, 2017 | 04:51 PM GMT+7

TheLEADERVietnam has become one of the most attractive destinations of foreign investors thanks to its political stability, strong economy and the government’s policies, according to a high profile foreign consultancy firm.

Vietnam: Still irresistibly attractive to foreign investors, mostly via M&A
Vietnam continued attracting huge amounts of foreign direct investment. Source: Customs Newspaper

Stephen Wyatt, Regional Director of the Jones Lang Lasalle (JLL), an American professional service and investment management company stated: "Vietnam - an emerging market is drawing lots of attention from foreign investors​. Real estate FDI expects to reach a new record in 2017." 

He added that the country was considered as one of the fastest growing nations in Asia over the past few years. "By 2050, Vietnam will be ranked as 20th key economy in the world.

The level of FDI has continued to grow year-on-year due to these strong fundamentals with newly registered FDI to USD 19.2 billion in first half of the year, representing a rise of 54.8% y-o-y. Vietnam remains one of the most favourable destinations for foreign investment in South East Asia.

Whilst FDI in real estate is set to increase over the coming years, the market is still dominated by domestic investors that can take advantage of the local market knowledge and an ability to close transactions within tight timescales.  

In the first half of 2017, Vietnam continued attracting huge amounts of Foreign Direct Investment (FDI). According to the report on Investment Quarterly Vietnam Q2 2017 just announced by Savills, a top global corporation providing high-end real estate services, Vietnam’s FDI in Q1 2017 was US$7.72 billion, 6.5% higher than Q1 2016 and registered FDI was US$19.22 billion, 54.8% higher than Q1 2016

Despite the domination of domestic investors, Vietnam’s real estate market is still irresistibly attractive to foreign investors, mostly via merger and acquisition (M&A). 

Savills’report shows that Japanese investors are quite interested in Vietnam’s real estate market.

Nishi Nippon Railroad and Hankyu Realty, two Japanese investors, and Nam Long Investment Corporation have cooperated and established a joint venture to develop a 26ha project namely Mizuki Park which is worth US$351 million in Ho Chi Minh city.

Also, Aeon Mall, a Japanese retail, corporate group, has joined hands with BIM Group, a diversified group of companies headquartered in Halong City, Quang Ninh Province, Vietnam, to develop the second commercial centre in Hanoi on an area of 16.7 hectares with an estimated US$20 million investment.

Besides, residential projects continued to attract the attention of foreign investors. The Fortune Land Development Group of China has acquired the stake of VinaCapital Investment Management Ltd company (VinaCapital) in the 198.5ha Lotus Dai Phuoc project in Ho Chi Minh city.

However, Vietnam has to face a lot of obstacles, especially in the context of its immature real estate market, to attract more foreign investors, boosting the development of national economy.