Record US$ 10.2 Billion FDI Drives Vietnam Real Estate
Record 2006 Foreign Direct Investment (FDI) worth US$ 10.2 billion is driving Vietnam’s real estate industry, with 14 large-scale projects with total registered capital of US$ 20 billion currently set for approval. Highlighting this development boom, Cityscape Asia, which takes place at the Suntec Singapore International Convention & Exhibition Centre 10-12 April 2007, will host one of the largest delegations of Vietnamese government investment agencies and real estate professionals ever seen overseas.
Neil Hickman, Exhibition Director, Cityscape Asia, commented, “Vietnam currently attracts more overseas investment than India. In 2005 FDI was recorded at US$ 5.8 billion, last year it reached US$ 10.2 billion and this year it is expected to top US$ 20 billion. Naturally this has led to a flood of major development projects, indeed, last month alone foreign investors were granted investment licences for 96 new projects with capital of US$1.2 billion.”
The reasons behind this sudden acceleration in FDI are attributed to three major factors. America has now ratified their Permanent Trade Normal Relations (PNTR) with Vietnam and the government has introduced the Common Investment Law creating a transparent and legal framework for investors. More importantly, the country’s accession to the World Trade Organisation (WTO) has allowed foreign investors open access to its financial markets and enables them to participate in the real estate business.
With the saturation of other more mature property markets in S.E. Asia, Vietnam is becoming a lucrative proposition. With a population estimated at 85 million, of which 50 per cent is under 35 years of age, rapid urbanisation and demand for residential and commercial space is already outstripping supply.
As a result, work on a number of long-standing projects in Ho Chi Minh City (HCMC) has now restarted after years of delays, including the US$ 156 million Saigon Pearl commercial complex and the US$ 220 million Kumho Asian complex. In Hanoi, projects valued at US$ 4 billion have been announced and elsewhere Malaysia’s Gamuda Group is looking to spend US$ 1 billion on a mixed-use development in Hai Noi, while the Japanese group Riviera has plans to build a US$ 500 million five star hotel complex.
Vietnamese participation at Cityscape Asia includes prominent developers, consultants, civil engineers, facilities managers, investment companies and real estate agents. Government support is sound with The Department of Planning and Investment – HCMC, Investment & Trade Promotion Centre of HCMC and HCMC North - West Metropolitan area Authority (NWMA) also present.