Vietnam’s real estate market continues to attract foreign investors

Ho Chi Minh City and Hanoi remain in the top ten most appealing destinations for cross-border investment

Despite facing challenges from domestic firms, the Vietnamese real estate market continues to attract foreign investors and investment funds, according to industry insiders. VN Express reports the 2023 Asia-Pacific Investor Intentions Survey by CBRE Vietnam revealed that Ho Chi Minh City and Hanoi are among the top 10 most attractive destinations for cross-border investment. Ho Chi Minh City even ranked third on the list, surpassing Australia for the first time. 

Investors from Asian countries and territories, including Hong Kong, Singapore, China, South Korea and Japan, have shown the greatest interest in Vietnam. Singaporean firms have been particularly active in large-scale deals in Vietnam at the start of 2023. Vietnam’s open economic policy and integration into global supply chains have made growth possible. The country’s resilient supply chain is key to its economic strength and increasing the attractiveness of real estate to foreign investors.

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The Investor discussed how Vietnam’s GDP grew by 8.83 percent Year-on-Year in the first nine months of 2022, marking the highest growth in the past decade. The growth is attributed to the three pillars of investment, export, and domestic consumption that have made the country resilient against headwinds. Foreign direct investment (FDI) reached VND361.16 trillion (USD15.4 billion) in the first nine months of 2022, with real estate attracting the second-highest amount of FDI. Industrial real estate is the most attractive segment, followed by office, retail, residential, and hospitality properties. 

The average rent in the Ho Chi Minh City industrial market increased six percent Quarter-on-Quarter to VND4.69 million/square meter/term in the third quarter, while the occupancy rate remained stable at 91 percent. The demand for Grade-A offices in Ho Chi Minh City has continued to grow, while retail real estate has witnessed a wave of capital spending in the third quarter. The serviced apartment market saw a rise in demand for accommodation, leading to positive performance and strong recovery in the third quarter. Danang, Bac Ninh, and Hai Phong continue to attract foreign tenants in Vietnam.

The Property Report editors wrote this article. For more information, email: [email protected].