TPP's impacts on Vietnam property market

According to Mr Neil MacGregor - Managing Director of Savills Vietnam, Savills believe the real estate market will continue to remain robust, despite the likely demise of the Trans-Pacific Partnership. Ongoing discussions regarding the Regional Comprehensive Economic Partnership (RCEP), involving China, as well as Membership of the ASEAN Economic Community and the Vietnam-EU Free Trade Agreement (EVFTA) are all important drivers for continued investment, even without TPP.

We have seen that trade with countries such as Japan and Korea typically comes together with FDI, importantly fueling investment into infrastructure and real estate.

There is considerable interest from foreign investors in Vietnamese real estate at this time, supported by strong GDP growth, a relatively stable currency, the young demographics, rapid urbanization, as well as the rapid growth in the domestic consumer market that is driven by one of the fastest growing middle classes anywhere in the world. This is fueling investment across all real estate sectors from industrial to office and residential to retail.  In addition the rapid growth in tourism arrivals, both foreign and domestic, is creating a boom in the hospitality sector.

Savills expect to see a considerable amount of inbound investment into real estate in 2018, following a very active 2017 for our investment advisory teams. Interest remains strong from Japan, Korea, Singapore and increasingly China.  However, it remains challenging for foreign investors to identify quality real estate investments with clear ownership, and transactions involving operating assets will remain scarce.  The majority of transactions will involve development projects, with many foreign developers seeking to secure long term partnerships with local developers.