UKVFTA brings more investment to Việt Nam real estate market

VIETNAM, September 23 –

Hoang Ha

HÀ NỘI – Việt Nam’s property market is seeing more UK investment thanks to the UK-Việt Nam Free Trade Agreement (UKVFTA).

Great Britain is known for consulting services, especially in the real estate sector. Real estate is not only the choice of many investors, but also a safe and very effective investment channel according to Savills Việt Nam, a UK real estate consultancy in Việt Nam.

“This agreement is likely to encourage the expansion of British companies in Việt Nam and we anticipate interest from companies in data centres, high-tech manufacturing, financial services, high-tech services and potentially pharmaceuticals as well,” says Matthew Powell, director of Savills Hanoi Việt Nam News.

“These companies will seek real estate across the country, ranging from manufacturing facilities to office space. Interest and demand from UK companies has increased. Việt Nam was high on the agenda and the two countries continue to have investment conferences.”

Also Read :  No second prize in real estate

“We have seen institutional investors in the commercial market with interesting prime office properties such as Techcombank Tower 6 Quang Trung.”

With a dynamic industrial scene, Việt Nam could also see players in industrial data centers or in logistics. However, we expect the focus will be primarily on services and financial services, he said.

In addition, “we expect UK investment to be related to services, pharmaceuticals, specialist engineering, high-tech manufacturing, aeronautics, financial services and other UK export industries.”

Although Asian countries such as Singapore and South Korea are leading investments, Việt Nam is home to several active UK multinationals, particularly in the financial services sector. For example, Standard Chartered opened its new headquarters in Hà Nội at Capital Place in June.

“Currently, interest is mostly in Asia, but we could see an uptick in British curiosity,” Powell said.

On December 29, 2020, the United Kingdom and Việt Nam signed the Free Trade Agreement (UKVFTA), aiming to pave the way for continued and increasing trade between the two countries. The agreement came into effect on May 1, 2021.

Also Read :  What Realtors Really Mean When They Say Cozy | Real Estate News & Insights

According to Cushman & Wakefield Vietnam, participation in trade deals can bring great benefits to the investment market in Việt Nam, as evidenced by previously signed deals. A good example is the $1 billion capital flow from Denmark for the Lego factory project in Việt Nam after the EU-Vietnam Free Trade Agreement (EVFTA) came into effect.

“As such, we are very confident that the UKVFTA will also help attract more UK investors to Việt Nam,” said Trang Bùi, Country Head of Cushman & Wakefield Vietnam Việt Nam News.

“The UK real estate market is mature and established, so its investors are more willing to allocate capital to assets that are already operational and profitable, with high stability and low risk,” Trang said.

“This strategy may differ from investors from other regions of the world. In general, cross-border investors always need some time to adjust capital flows and seek the right opportunities in developing countries like Việt Nam.”

Also Read :  Utah Real Estate Stats and Trends for 2023

“In order to maximize the potential benefits of the UKVFTA, Việt Nam must constantly change and improve the policy and business environment according to the strict requirements of foreign investors. Through this process of continuous improvement and adjustment, the country’s competitiveness will reach new heights on the global investment map,” she said.

As of May 2022, the UK has a total of 462 investment projects in Việt Nam with a total registered investment capital of US$4.15 billion.

British investors invested the most in Việt Nam’s manufacturing and processing industries, with 120 projects registering investment capital of nearly US$1.6 billion, accounting for almost 40 percent of the total investment capital.

Second was real estate, with 23 projects with investment capital of $1.04 billion, accounting for 26 percent of total investment capital. — VNS

Source link