DANANG VILLA REALTY

CBRE's survey shows that Vietnam ranks only behind India among the sought-after emerging real estate markets in Asia-Pacific.

The above survey was conducted by CBRE in the last two months of 2023. This survey asked about investors' intentions and plans in the Asia-Pacific region in 2024. The results showed that Vietnam ranked second In emerging markets, investment priority is given, second only to India. Third place belongs to Thailand.

According to CBRE, the two segments that attract foreign investors when entering Vietnam are industrial and office real estate. Growing trade activities in Vietnam have fueled the need for supply chain management and logistics. Investors have recognized the potential from these dynamics, so they are very interested in industrial real estate.

In addition, investors and foreign investors are also very interested in land for housing development projects. Many investors have actively searched for properties with discounted prices or whose owners are facing legal and capital difficulties. This trend shows the resilience and attractiveness of the housing segment in Vietnam.

Mr. Nguyen Pham Anh Duy, Director of Investment Consulting Department, CBRE Vietnam, said foreign investors have a long-term vision about the potential of the Vietnamese economy. They are willing to invest capital to benefit immediately during the recent price adjustment cycle.

"This is especially true of current developments. The buyer benefits from the seller, who is an investor who needs to divest capital after a long time holding assets," Mr. Duy said.

The survey also shows that investors in Asia-Pacific prefer to seek double-digit profit targets. They are shifting their priority strategy to assets that can increase in value or assets that are having capital problems, forcing them to reduce prices.

Accordingly, more than 60% of foreign investors plan to upgrade prime buildings in their investment portfolio according to ESG (environmental, social and corporate governance) standards in 2024. The majority among them are private foundations, real estate funds and real estate trusts (REITs). This is also a trend to pursue the strategy of increasing asset value.

However, CBRE notes that Vietnam's real estate market has its own characteristics: supply is scarce and assets that generate good cash flow are rarely offered for public sale. The difference in price expectations between buyers and sellers is also a major obstacle in transactions.

In general, CBRE assesses that the demand for buying real estate projects in the Asia-Pacific region is still quite weak, while the demand for selling projects is high. Investors in most markets, typically Japan, will continue to maintain a wait-and-see attitude in the first half of 2024.