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Real estate continues to catch foreign attention

Released at: 16:10, 19/03/2016

Real estate continues to catch foreign attention

Continued demand among overseas investors at the institutional level to remain this year, according to Cushman & Wakefield Vietnam report.

by Nguyen Quynh

Vietnam continues to be an ideal destination for Asian investors, Mr. Alex Crane, General Manager of Cushman & Wakefield (C&W) Vietnam, said in its “Record High Global Capital Targeting Commercial Real Estate” report.

Demand from overseas investors at the institutional level remains and this will continue through 2016, he believes.

The number of mergers and acquisitions (M&A) increased dramatically last year, by about 20 per cent compared to 2014, with real estate accounting for 10 per cent of total foreign direct investment (FDI) into Vietnam.  

“We haven’t yet seen much uptake at the individual level, especially in the residential sector, but Asian corporations in particular are aggressively active in Vietnam,” Mr. Crane said. “The market is becoming more competitive with local and foreign groups vying for the best sites and investments.”

One of the challenges for foreign developers and investors, despite how well funded they are, is obtaining land. Mr. Crane therefore suggested joint ventures between foreign investors and domestic companies as a solution in accessing the land necessary to develop projects.

The C&W report also showed that growth in available capital was recorded in Europe, the Middle East and Africa (EMEA), the Americas, and Asia Pacific, with the latter leading the charge with an 8 per cent increase to $131 billion, bolstered by the closing of a number of funds during the course of 2015. Despite this increase, however, the region attracted the least capital. While EMEA and the Americas saw capital expand by less than 2 per cent, across EMEA there was $143 billion in new capital with the Americas still attracting the greatest amount, at $169 billion.

The weight of cross-border flows continues to transform real estate markets around the globe. Most notably, more than 40 per cent of capital targeting both Asia Pacific and EMEA is from outside of their respective regions, with North American-sourced capital dominating, according to C&W’s Director of Capital Markets Research, Mr. Nigel Almond.

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