Vietnam Real Estate Report Q4 2011
Business Monitor International, October 2011, Pages: 61
Vietnam’s property market is increasingly attractive to investors and developers. The economy is rapidly growing, urbanisation is continuing apace, along with the development of major projects across the board of real estate sub-sectors. The growing affluence of a predominantly-urban section of the population is looking for new, modern and well-planned retail, business, residential and leisure areas.
The Vietnamese economy is one of the fastest-growing in South East Asia but, in recent years, it has been characterised by overheating tendencies, such as high inflation and a large trade deficit. Inflation is the highest in Asia Pacific in 2011. The government is responding to these problems and is also looking to contain any effects of a less conducive global environment, with regard the economic turmoil in the US and the eurozone.
Despite Vietnam’s favourable economic conditions, returns for Vietnam's commercial property sector are constrained by a serious oversupply in all sub-sectors as the result of an earlier construction boom. The property market is also suffering from a critical shortage of capital. Real estate credit has sharply declined since November 2010, when the State Bank of Vietnam (SBV) began its monetary tightening cycle. This has been exacerbated by the state bank’s real estate credit constraint policies and the adverse effects on credit of its inappropriate categorisation of many real estate projects as ‘non-manufacturing’ activities. The SBV will conduct a review of these issues with a view to increasing credit flows to the real estate sector.
To source financing independently of banks, developers are now seeking joint venture partners or the sale of projects in their totality to a third party, retail and office space or of residential units. The current shortage of bank finance presents significant advantages for cashed-up property investors.
Foreign direct investment in Vietnamese property is rising. Investors from Asia and further afield have shown interest, while many domestic investors are looking to partner with those from overseas to make a deal. There is a trend for more mergers and acquisitions (M&A). Investors and developers from Vietnam are becoming more active as buyers, where previously foreign groups with large capital availability were the main players. M&A is still hampered by the country’s underdeveloped legal framework, complex regulatory procedures and a generally low real estate transparency.
The Da Nang commercial property market is set for growth, due to its growing importance as a tourist and commercial centre, its central location, low real estate prices and social stability. In 2012, rental increases there are expected to exceed those of Ho Chi Minh City and Hanoi across the board.
Executive Summary
SWOT Analysis
Vietnam Real Estate/Construction SWOT
Vietnam Economics SWOT
Vietnam Business Environment SWOT
Real Estate Market Overview
Real Estate Market Analysis
Comments And Data From In-Country Sources
Table: Vietnam’s Real Estate Market – Historic Rents, 2010 And 2011 (m2/month, US$)
Table: Vietnam’s Real Estate Market – Net Yields, 2011 And 2012 (%)
Table: Vietnam’s Real Estate Market – Terms Of Rental Contract/Lease, Mid-2011
Industry Forecast Scenario
Real Estate Outlook
Table: Vietnam’s Real Estate Market – Rentals, 2011-2012 (m²/month, US$)
Table: Vietnam’s Real Estate Market – Forecast Net Yield, 2008-2015 (%)
Construction Industry Outlook
Table: Vietnam Construction And Infrastructure Industry Data
Table: Vietnam Construction And Infrastructure Industry Data
Construction And Infrastructure Forecast Scenario
Macroeconomic Outlook
Vietnam - Economic Activity
Business Environment
Real Estate/Construction Business Environment Ratings
Table: Asia Real Estate/Construction Business Environment Ratings
Vietnam’s RECBER
Vietnam’s Business Environment
Table: BMI Business And Operation Risk Ratings
Institutions
Table: BMI Legal Framework Rating
Table: Labour Force Quality
Infrastructure
Table: Asia, Annual Fdi Inflows
Market Orientation
Table: Trade And Investment Ratings
Table: Vietnam Top Export Destinations
Operational Risk
Competitive Landscape
Company Profiles
Becamex IDC Corp
COTECCONS Group
Housing And Urban Development Corp (HUD)
Nam Cuong
Song Da Construction Corporation
Vietnam Construction And Import-Export Corporation (Vinaconex)
Vietnam Machinery Erection Corporation (Lilama)
Vincom
BMI Methodology
How We Generate Our Industry Forecasts
Construction Industry
Bank Lending
Real Estate/Construction Business Environment Rating
Table: Weighting Of Indicators
Project Finance Ratings Indicators
Table: Design And Construction Phase
Table: Commissioning And Operating Phase – Commercial Construction
Table: Commissioning And Operating Phase – Energy And Utilities
Table: Commissioning And Operating Phase – Transport
Sources
- Becamex IDC Corp
- COTECCONS Group
- Housing And Urban Development Corp (HUD)
- Nam Cuong
- Song Da Construction Corporation
- Vietnam Construction And Import-Export Corporation (Vinaconex)
- Vietnam Machinery Erection Corporation (Lilama)
- Vincom
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