Hanoi – Commercial property is attracting much interest from investors in Vietnam’s property market, which is still an attractive destination for foreign real estate firms.
Real estate services firm Jones Lang Lasalle (JLL) said hundreds of millions of USD is waiting to be poured into almost all segments of Vietnam’s property market, including housing, office, retail, hotels, and industrial zones. Investors are from many countries such as Japan, the Republic of Korea and Singapore.
Country head of JLL Vietnam Stephen Wyatt said housing is usually the most attractive segment, but investors are switching their attention to commercial property, especially grade-A office projects with ideal locations and high growth potential.
Office rents in Vietnam are currently much higher than in other countries in the region, reflecting a shortage of office spaces. Meanwhile, more and more foreign investors have been entering and setting up offices in the country, he noted.
Echoing this view, Tu Thi Hong Anh, Director of the Commercial Leasing at Savills Vietnam, said the vacancy rate in the office-for-lease market of Ho Chi Minh City has declined to a very low level, pushing office rents to the highest point since 2009.
She added office rents could soar by up to 20 percent at some grade-A buildings in 2018 and continue to rise in downtown areas in 2019.
There is very big demand for new high-quality buildings in good locations, General Manager of Cushman & Wakefield Vietnam Alex Crane said, noting that the pressure of hunting for vacant space will last until the end of 2019.
Meanwhile, the retail property segment also boasts huge potential.
Mai Vo, Director of Retail Services of Cushman & Wakefield Vietnam, said eating and drinking, fashion and healthcare services will lead the development of the retail sector in the next two years, so the market needs more retail space. In downtown areas, the demand for shop spaces remains high due to fierce competition among brands, boosting retail space rents, particularly in HCM City and Hanoi.
Investors also pay special attention to hotel and industrial zone projects amidst the sharp increase of tourists to Vietnam and continual industrial growth.
There are opportunities in the Vietnamese market for both existing and new investors to increase their market share, Country head of JLL Vietnam Stephen Wyatt noted.
Photo: CBR Investment AG