Exciting prospects for offices in VN: Savills

Created 19 March 2019
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Residential property players remained active while offices continued to be one of the most exciting segments across the region, real estate consultant Savills Vietnam noted.

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Exciting prospects for offices: Savills, vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news

Flexible workspaces are becoming increasingly popular. Offices continue to be one of the most exciting property segment in Vietnam

According to Savills, Vietnam proved to be one of the world’s fastest growing economies last year, posting its highest gross domestic product growth for the last decade at 7.1% year-on-year.

In addition, foreign direct investment remains the key to economic development, with over 50% of such newly registered capital flowing into the processing and manufacturing sector, hence boosting the industrial real estate sector.

In November, Mapletree Logistics Trust announced their acquisition of a Unilever warehouse at the Vietnam-Singapore Industrial Park I for roughly US$31 million. The warehouse will be leased back to Unilever for 10 years.

In December, Amata Corporation, a Thailand-based industrial developer, commenced construction of the Song Khoai Industrial Park, part of the mega project Amata City Ha Long in the northern province of Quang Ninh.

Savills noted that this was a strategic step for Amata in expanding to the north of Vietnam, following Amata Bien Hoa Industrial Zone and Amata Long Thanh, both located in the southern provinces.

Covering an area of 5,789 hectares, the new project is an integrated industrial city that will eventually become a smart city, with total capital of over US$1.6 billion.

Residential property players remained active in the fourth quarter of 2018. VinaCapital Opportunity Fund Limited transferred a 34.18% stake in Green Park Estate, a 15.7-hectare mixed-use development project in Tan Phu District in HCMC. Another VinaCapital fund, Vinaland, holds a 63.47% stake in the project but plans to divest in the near future.

Meanwhile, Vinhomes, the residential property development arm of Vingroup, announced plans for two new township projects – VinCity Ocean Park in Gia Lam District and VinCity Sportia in Nam Tu Liem District, Hanoi. These major projects are expected to provide a comprehensive range of facilities and parks for health, education, entertainment, leisure and outdoor sports.

Offices continued to be one of the most exciting property segments across the region. HCMC enjoyed its best performance of the last five years, with average rent increasing 8% year-on-year and a very high occupancy rate of 97%, while Hanoi recorded a 3% year-on-year increase in average gross rent with improved Grade A performance in non-central business district areas.

“There is massive interest from foreign investors at the moment. At the Savills Hanoi, Danang and HCMC offices, we are seeing many investor groups each day, mostly new entrants, who are keen to explore opportunities. This interest is mainly coming from the region – Japan, Korea, China, Hong Kong and Singapore but also U.S., European and global funds are investigating heavily,” said Matthew Powell, director at Savills Hanoi.

He added that all commercial and residential segments are targets. Most of the investor interest comes from funds that are not looking to develop but are looking to acquire operating cash-generating assets, such as office properties, retail malls and four- and five-star hotels.

“Looking to the future, we expect more deals in 2019 on assets, portfolios and corporate investment levels. The large number of initial public offering valuation projects on which Savills Vietnam is working demonstrates investors’ interest in the property market,” he remarked.

With the promising prospect of multiple real estate segments in Vietnam’s market, Savills expected investment flows to be directed to a wider variety of sectors, including opportunity assets, such as industrial and logistics properties.

 

Source: VNP - Bridge

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