Mark Ridley - Three years on

During his last visit, Mr Ridley noted that Viet Nam was a “global property hotspot” and highlighted its importance in Savills long-term strategy. Three years later, he reiterated this statement in the Group’s half yearly financial statement.

Data from the General Statistics Office shows that Viet Nam’s exports in the first nine months of 2022 reached US$282.52 billion, increasing from US$194.3 billion in 9M/2019. Thailand, Singapore, and Malaysia have seen improvements after posting negative growth in 2020, with expected 2022 GDP growth of 3.0%, 3.5%, and 5.9%, respectively. In 2019, Viet Nam had GDP growth of 7.2% but expects to achieve 7.5% in 2022.

Commentators expect Viet Nam to be the fastest growing economy in Southeast Asia in 2023. GDP increased by 13.7% YoY in the third quarter, resulting in growth in the first nine months of 8.8% YoY, the highest 9M results in 12 years. Viet Nam’s upgraded GDP forecast bucks the slowing trend elsewhere in Asia.

Mark Ridley said: “There will be more global interest than ever before. Globally, GDP growth will sit at about 2.5% in 2023, and developed markets like the UK and Europe are forecast to be in recession for the next two quarters. This will drive foreign interest as investors seek growth opportunities, and Viet Nam presents these in abundance.”
Manufacturing drives GDP growth in Viet Nam. While there might be short-term dips with consumer spending dropping elsewhere in the world, the trends driving manufacturing growth will continue, like the shift of manufacturing from China to Viet Nam.
 
Asia’s appeal is contrasted with European markets. The British pound has fallen nearly 17% against the Hong Kong dollar and more than 13% against the Singapore dollar in 12 months to the end of September. Inflation in the UK and eurozone is sitting at approximately 10%. APAC countries are experiencing lower inflation levels, with Singapore expecting 5% in 2022, Malaysia 3.3% and Viet Nam 3.8% this year. This performance also means that Asian investors have greater opportunities in Europe. Residential values in London have not returned to 2014 levels and along with the devaluation of the British pound, London is approximately 40% cheaper for international investors than it was during its prime.

Mr Neil MacGregor, Managing Director, Savills Viet Nam, commented: “Mr Ridley’s trip highlights Viet Nam’s appeal, both for Savills and foreign investors. Savills has dominated European markets and is now forging its way in the East, with a strong representation in Southeast Asia. Viet Nam is seeing robust growth, much like established countries like Korea have seen over the last two decades.”

The pandemic has highlighted how quickly the world changes. Implementing smart strategy is essential.  As Global CEO, Mr Ridley has a considered understanding of global markets. He added: “The global economy is facing strong headwinds with geopolitical tensions, rising inflation, and a spending slowdown in major European markets and the US. However, Viet Nam’s political stability, sustained infrastructure spending, young population, and good trade placement put it in a strong position.”

During the recent 2022 Entrepreneurs’ Day, Prime Minister Chinh highlighted Viet Nam’s aim to be an industrialised, modern, and transparent economy that is fully integrated within the global market. This is especially positive for real estate, given the commitments to administrative reforms that will speed up processes and build trust for investors, developers, and buyers.
Savills experts agree that transparency is fundamental to sustained growth and attracting foreign capital because investors want to know that their investments are secure.

Mr Ridley commented: “The growth we are seeing in Viet Nam is vital to global performance. Its residential market has opportunities to expand even further. Real estate related to supply chains or fulfilment has been exciting, and we are seeing opportunities for data centres and niche areas like cold supply chains. Occupier services present opportunities for investors and end-users from diverse sectors from manufacturing and real estate to tech and logistics. We are seeing increased demand for environmental consultancy, which will influence the real estate people occupy and how they use it.”

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See Further:

• Strong FDI Inflows for High-Value Manufacturing Across Southeast Asia
• Removing Stipulated Pricing to Boost Infrastructure Development