Mr. Jonathan Tizzard, National Head of Valuation & Research at Cushman & Wakefield Vietnam, talks about the TPP's effect on Vietnam's economy in general and its real estate market in particular.
There are many expected benefits and Vietnam stands to be one of the nations to benefit the most from the TPP, which was sealed on October 5 in Atlanta after more than five years of negotiations.
A report published by the Eurasia Group suggests that GDP in Vietnam will be boosted by 11 per cent and exports by 28 per cent by 2025 as companies move their manufacturing bases to the country to take advantage of low wages.
It is hard to gauge exactly how much the anticipation of the TPP has already helped Vietnam, but with the TPP having been finalized the benefits will continue to be felt as the economy continues its upward trajectory. More and more industrial occupiers will come to Vietnam to take advantage of the TPP alongside the other free trade agreements that Vietnam has secured.
Therefore, demand for industrial property will continue to rise. There will be more and more professionals in the country who are able to afford more expensive housing, not to mention shopping and the other associated items that foreign and local professionals with greater disposable income will require.
The demand for international quality office space will also rise as these industrial groups look for city center office space. The continued urbanization of big and small cities will continue as agricultural laborers look to industrialized areas for work. In addition, the demand for more roads, railways, seaports, and airports as the logistics market continues to grow will be a feature of the next decade and after in Vietnam.
The challenge for the government will be creating an equal society that benefits people across the spectrum. In addition, the protection of the environment will become a much more important subject as more and more infrastructure, utilities, and industry develop in the country.