Potential of Investment in Real Estate Market in Vietnam in 2018

According to Foreign Direct Investment Agency, the foreign direct investment amount into Vietnam in the area of real estate has reached 5.54 bil USD in the first six month of 2018, accounting for 27.3 % total registered investment.  It appears that real estate is the second attractive sector, after industrial manufacturing. Foreign investors have cơm to realize that, Vietnam real estate market demand has grown steadily over the time for many reasons, including among others, the growing demand of mid-income consumer

Japan is leading investor in Vietnam with total 6.46 bil USD in various sectors, among which, real estate is getting more attractive.  Recently, Sumitomo has been granted investment registration certificate for development of project in Dong Anh, Hanoi with 4.138 bil, which is the largest project in 2018.  In the South, Nomura Real Estate has announced to have acquired 24% of Sun Wah Tower in CBD of Ho Chi Minh City. In Da Nang, Mikazuki has made investment of more than 100 mil USD in hospitality real estate.

Beside Japan, investors from Korea, Singapore, Taiwan, Malaysia have invested significantly over the years in the area of real estate and achieved success.

Sophisticated investors, mainly big real estate developers tend to rely on market research, analysis of international real estate agencies.  Small and medium foreign investor, and individual in the meantime could utilize the flexibility and dynamic of local real estate consulting companies that provide insight not only to market overview but the behavior of local investor, developer that allow them to have assess to untouched market.

The investors could disburse investment through acquiring shares, capital in companies or provide financial support to local developers to develop project.  If investors set up real estate company, the minimum investment requirement is 1 mil USD according to law.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

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