Vietnam remains an attractive real estate investment destination given its potential for recovery and economic adaptability amid significant shifts in global investment trends.

The recently-released Q2 2023 Global Investment Report from Savills, highlighting investment scenarios across key real estate segments along with challenges and opportunities, notes that 2023 has seen the office sector facing a hybrid work and technological decline while the industrial sector has adapted to global reductions and technology transfers. The residential and retail sectors have been challenged to adapt and recover, while the hotel sector has encountered both challenges and emerging opportunities.

In this context, Vietnam continues to demonstrate strong recovery capability and flexible adaptation to economic development trends.

FDI inflows into Vietnam hold promise, with total registered FDI in 2023, as of July 20, standing at $16.24 billion, up 4.5 per cent over the same period last year.

Newly-registered projects and capital have increased substantially, particularly in the manufacturing sector. Improvements in infrastructure and administrative procedure reforms and investment in innovation centers in Vietnam make the market more attractive for international investors.

According to Mr. Troy Griffiths, Deputy Managing Director of Savills Vietnam, despite short-term pressures related to inflation and production and export declines, Vietnam’s medium-term outlook remains positive.

Cuts to interest rates by the State Bank of Vietnam (SBV) have stimulated economic growth by lowering capital costs for borrowers and credit institutions.

“The SBV has lowered interest rates to support growth, and FDI inflows remain stable,” he said. “New regulations like Resolution No. 33 and Decree No. 10 supporting debt restructuring will positively impact real estate and promote transparency, which is beneficial for sustainable long-term growth.”

Significant M&A transactions took place in Vietnam during the second quarter of this year, including the Everland Opportunity IX LLC acquiring three hotels in Vietnam and Indonesia from Strategy Hospitality Holdings Ltd. for $106 million, Keppel Corporation and Keppel Vietnam Fund buying a 49 per cent stake in two 11.8-ha residential projects from the Khang Dien Group for $136 million, and the THT Development Company transferring a 1.13-ha land parcel in Starlake City to the CMC Corporation, for the creation of CMC’s innovation and technology center, involving $76 million in investment.