Photo: Duc Anh
Vietnam remains an increasingly popular destination for foreign investors, according to latest JLL report.
JLL Vietnam has reported that Vietnam is seeing increasing levels of foreign direct investment (FDI), supporting economic growth and helping drive the country’s development.
An estimated $15.8 billion in foreign investment came to Vietnam in 2016. Policies have facilitated investment, with foreign ownership rules in real estate relaxed in 2015. Mr. Stephen Wyatt, General Director of JLL Vietnam, said that Vietnam saw strong growth in FDI during 2016 and this can be attributed to a strong economy backed by political stability and relatively low labor costs compared to the region.
In real estate, demand for office and retail space and hotels is increasing around the country. Ho Chi Minh City’s real estate market has a number of noteworthy projects, according to the report, including the under-construction Vincom Landmark 81, the Thu Thiem New Urban Area, and a 657-ha site east of the Saigon River earmarked as the new central financial district, while Takashimaya opened their first department store in Vietnam, within the Saigon Centre. In Hanoi, meanwhile, the Starlake Ho Tay new urban area project is being built by South Korean conglomerate Daewoo.
Vietnam welcomed 10 million foreign tourists in 2016, with increasing numbers driving the development of hotel projects, including the Hoi An South Integrated Resort, now under construction and slated for completion in 2019, and the Wyndham Legend Halong Bay, the first five-star hotel in Ha Long city, which opened last June.
Manufacturing dominates FDI, accounting for 64 per cent, with real estate attracting 7 per cent, according to Mr. Wyatt. “The sector attracted $1.53 billion in newly-registered capital in 2016, with 59 new projects,” he added.
The JLL report also noted that Vietnam will continue to grow, despite the slowdown affecting other Asian countries. GDP growth reached 6.2 per cent in 2016 and is forecast to rise to 6.7 per cent this year due higher consumption levels among the country’s middle class.
The country has also benefitted from the return of overseas Vietnamese, who are becoming major players in Vietnam’s economy and growing its thriving startup scene in Ho Chi Minh City and Hanoi.
Such strong economic and population growth factors have led to both cities making the Top 10 most dynamic urban areas in JLL’s most recent Cities Momentum Index, with Ho Chi Minh City in second place and Hanoi in eighth. Both, however, still have work to do to secure their longer-term positions.