Legal hurdles removed, foreign capital 'floods' into Vietnam

In 2023, real estate will be the second field attracting nearly 4.67 billion USD of FDI capital, an increase of 4.8% over the same period. Many experts believe that if projects are legally cleared more quickly, foreign enterprises will 'land' in this market faster and stronger.

Vietnam residential real estate – Attractive destination

CBRE's survey "Investors' intentions and plans in the Asia-Pacific region in 2024" ranked Vietnam second among the most sought-after emerging markets in terms of investment strategy. opportunities and added value, especially in the field of real estate development.

JLL Vietnam expert said that Vietnamese real estate attracts the attention of international investors, mainly through M&A activities. The form of joint venture that is becoming popular is that foreign investors, with strong financial capacity and rich experience, will cooperate with local businesses.

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CapitaLand, an industry giant from Singapore, is also considering buying a part of Vinhomes' Ocean Park 3 project with a value of about 1.5 billion USD. If successful, this will be one of the largest real estate transactions in Southeast Asia in the past few years.

For the housing and urban area segment, Gamuda acquired a project with an area of 3.68 hectares in Thu Duc for 305 million USD in July 2023, the leading deal in the segment. In addition, also in 2023 there will be a number of other outstanding deals such as Keppel Group acquiring an 11.8 ha project from Khang Dien for 277 million USD and a retail project in the center of Hanoi for about 80 million USD. million dollars.

Evaluating specific segments, Cushman & Wakefield Vietnam representative said that the housing segment is always an attractive type for foreign investors. Vietnam is ranked among the 15th most populous countries in the world with 100 million people. Furthermore, the demographic model in Vietnam with 70% of the population aged 15 - 64, increased disposable income, and rapid urbanization especially in Hanoi and City. Ho Chi Minh City, increasing the attractiveness of the housing market for FDI.

The market is "blooming" with many other FDI investors such as Hong Kong Land, Frasers Property, Daiwa House, Nomura... which has boosted the number of luxury apartments of foreign investors in the city. HCM will increase to 23,800 units in the fourth quarter of 2023, compared to only 1,000 units in 2008.

More legal support is needed

According to Mr. Le Hoang Chau, Chairman of the City Real Estate Association. In Ho Chi Minh City (HoREA), commercial housing real estate plays an important role, accounting for a large proportion of economic growth, and the potential to attract foreign capital is still abundant.

“FDI enterprises mostly invest in large-scale projects, with high requirements on standards, regulations, progress, and real estate project management; Legal procedures are clear and transparent, so we need to expand and apply solutions to attract these resources through: Publicizing land funds, having direct support policies, and one-stop investment procedures. , juridical; Timely amend foreign investment policies in accordance with specific characteristics, planning, construction of technical infrastructure, and transportation connected to projects...", Mr. Chau said.

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A representative of the Vietnam Association of Real Estate Brokers (VARS) said that foreign investment policies must be quickly adjusted to keep up with global economic fluctuations and changes in business attraction strategies. FDI from countries around the world; Prepare conditions to attract investment such as: reviewing and supplementing clean land funds, reviewing planning and soon issuing decrees to effectively implement important laws such as the Land Law and Housing Law. Housing and the new Real Estate Business Law were passed.

“The Government should also quickly issue specific, clear and detailed guidance documents on the roles, responsibilities and powers of subjects participating in the appraisal and approval of dossiers, and soon put an end to the status of dossiers. Documents and documents of foreign businesses are "boiled" and "pushed", causing loss of time and high costs for businesses", Mr. Le Hoang Chau shared.

Mr. Nguyen Pham Anh Duy, Director of Investment Consulting Department of CBRE Vietnam commented, Commercial real estate and housing development project land in Vietnam continue to attract developers and foreign investors. Investors with a long-term vision of the potential of the Vietnamese economy who are ready to invest capital can immediately benefit from the recent price adjustment cycle. However, the bottleneck here is the legal congestion of projects that make investors afraid.

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“Currently, many foreign investors are observing and listening to the movement from the adoption of 3 new Law projects to the actual project development. If we really comply well with the provisions of the new Land Law, have transparent land pricing, and have many clean land funds, foreign investors will "land" in many real estate segments in the near future. Mr. Duy shared.

In the current difficult real estate market context, foreign investors can only rest assured to focus on legally-compliant segments. Therefore, experts recommend that the State needs to soon come up with solutions to attract FDI resources by quickly removing legal bottlenecks and attracting more foreign investors, which will clearly contribute to helping The real estate market soon escaped the "recession".

Source: Vietnam Finance

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Huttons VN Co., Ltd. is the official representative of Huttons Real Estate Group in Vietnam. Established on September 5, 2018, we reached out to the most formal and reasonable agreement to increase all competitive benefits when bringing business solutions to Vietnam, for both private investors and home buyers. . The success of Huttons VN is built on sound business experience abroad and architecture in the Vietnamese market.

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