Vietnam's industrial parks, offices, residential areas, and resorts are expected to benefit the most in the real estate sector when the Trans-Pacific Partnership (TPP) agreement comes into force.
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Vietnam’s industrial parks, offices, residential areas, and resorts are expected to benefit the most in the real estate sector when the Trans-Pacific Partnership (TPP) agreement comes into force.
Lately, all sectors are warming up again, with increasing transactions throughout the country. VinaCapital has recently launched the second phase of Dai Phuoc Lotus in the southern province of Dong Nai and Nine South Estates in Ho Chi Minh City.
Meanwhile, Jen Capital, a Chiaphua Group subsidiary based in Hong Kong, also introduced its Caye Sereno villas to the market.
Pham Vu Hai Anh, deputy director of Hong Hac Dai Lai, the developer of the Flamingo Dai Lai resort in the northern province of Vinh Phuc, said the TPP was considered one of the most effective motivators pushing foreigners to buy houses in Vietnam.
“This is why the foreign demand for our villas will be increased,” Anh said.
Meanwhile, a recent report by CBRE Vietnam clearly pointed out that industrial park developers and construction companies would benefit the most when a great number of foreign textile and fisheries companies migrate to Vietnam.
The report said that the TPP would spur more investment capital to Vietnam, especially from countries that are big importers of Vietnamese products, like the US and Japan.
“US investment projects in Vietnam remain modest compared to the Republic of Korea (RoK) and Japan. American companies will increase manufacturing activities in Vietnam and reimport made-in-Vietnam products, thanks to the country’s tax exemption on major products such as garments and textiles. They will likely target industrial land in the southern provinces of Vietnam, where a number of existing garment and textile factories are located,” the CBRE report said.
“Similarly, manufacturers from other countries will certainly consider switching from non-TPP countries like China, Thailand, Cambodia, Indonesia, and India to Vietnam to enjoy extra-low tariffs. This will lead to more demand for industrial land, warehouses, and factories, not necessarily from TPP countries, but also from non-TPP members like China, Hong Kong, or Taiwan (China), who want to front-run the TPP.”
Regarding the logistics sector, the report also said that increasing trade flow would result in higher demand for services. There will be greater need for infrastructure, including roads, railways, seaports, and airports to facilitate this sector.
In office and accommodation, increasing foreign investment and growing demand for foreign companies to set up in Vietnam will drive up the demand for international standard office space.
“The anticipated growth of foreign companies coming to Vietnam also means the higher demand for serviced apartments, apartments for lease, and even apartments for sale,” according to CBRE report.
Although it might be too early to conclude the possibility of land price increases, CBRE cited growing demand for industrial land and a limited supply of quality land as two factors that will drive up prices, especially in areas most sought after by textile and garment manufacturers like the southern provinces of Binh Duong, Dong Nai and Long An.
(Source: VIR)
