The Vietnam Commercial Real Estate market is expected to witness a CAGR of approximately 8% during the forecast period of 2022-2027.
The Covid-19 pandemic has caused a slowdown in the Vietnamese property market but many companies believe this is only temporary and are pinning their hopes on a rebound once the virus is under control. Meanwhile, the Government has identified public investment as a key solution to boost growth. A better infrastructure system, therefore, could also be seen as welcoming news for the real estate market for further development in the coming time.
In spite of the signs of cyclical moderation in growth, Vietnam’s economic outlook remains positive. Vietnam's economy is seeing strong growth, with laws that made foreigners invest in its development further. As a result, there´s been a surge of high-end real estate developments in the country.
The improvement in infrastructure supporting the tourism industry, which has always been one of the prioritized investment areas by Vietnam, has catapulted the rise of many tourist cities in recent years. Local demand in Vietnam is also rising as Vietnamese entrepreneurs are looking for investments where they can put in their money.
Key Market Trends
Growth In Vietnamese e-commerce to Drive the industrial real estate Market
The Vietnamese e-commerce market is forecast to continue growing in the post-pandemic period. The e-commerce revenue in Vietnam hit USD 11.8 billion in 2020, posting a growth rate of 18%.Vietnamese e-commerce market recorded the fastest growth rate in Southeast Asia. E-commerce is expected to continue thriving after the COVID-19 pandemic is controlled, creating new consumption trends.
The demand for online purchases through e-commerce platforms has increased sharply since the outbreak of the pandemic. By 2021, more than 70% of Vietnam’s population have accessed the Internet, of which nearly 50% of consumers have tried online shopping and 53% of them have used e-wallets and online payment.
E-commerce, particularly in logistic services and express delivery focusing on e-commerce, is now a prospering sector that investors are flooding into and successful cases have been seen over the years. Recently 4PL (4th party) logistics providers have also entered the market offering more custom solutions to customers who need more flexibility in their shipping needs. The demand of investors in industrial park real estate entering the Vietnam market at this time is also very great. In the past, they often needed to find a land fund to develop with a scale of 5,000-10,000 m2. Up to now, it has increased to 10,000 - 50,000 m2. The market is also expected to see a dizzying increase in cold storage demand in support of essential medical services such as the rotation and storage of the new Covid-19 vaccine.
Workplace real estate continues to grow in Vietnam
Currently, the demand for coworking spaces in Vietnam is driven by startups, freelancers, and small corporations. The growing demand has only attracted domestic firms but also global firms and investment funds in Vietnam. Going forward, such spaces will continue to expand in terms of supply and offerings and will not only attract startups as tenants but also small corporations who are looking to minimize costs and increase flexibility.
As of the end of 2021, the total stock of Grade A and B reached 1596448 sqm (NLA) in Hanoi. In Q4 2021 asking rents remained stable in existing projects in both grades. Asking rents of existing Grade A and Grade B offices were maintained at USD 24.6 per sqm/month and USD 14.0 per sqm/month respectively.
In Q4 2021 Ho Chi Minh City (HCMC) office market recorded a good revenue trend in vacancy and rental rates. In 2022, the market is expected to have 96,000 sqm of new NLA. from two Grade B buildings and one Grade A building.
Commercial Real Estate in Vietnam has a medium level of market share concentration. International investors are also attracted to the Vietnamese market and are looking to invest in almost all segments from office to retail and high-end hotels. Developers are active in creating new hospitality products for sales, most notable of which are coastal shophouse/shop villa in Phu Quoc and Ha Long.
In hospitality real estate there is a need for developers in Vietnam to diversify its market by paying attention to the non-traditional market and bringing in professionals to manage their property. There is rising demand is for quality office and retail stock in centralized places, with the Hanoi CBD in focus. The strength of the manufacturing and tourism sector will keep demand buoyant for retail, office, and industrial units. Some of the players are Vin Group, Dat Xanh Group, FLC Group, Toong, Nam Long Investment, and Sun Group.
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1.2 Scope of the Study
4.2 Commercial Real Estate Buying Trends - Socioeconomic and Demographic Insights
4.3 Government Initiatives, Regulatory Aspects for Commercial Real Estate Sector
4.4 Insights on Existing and Upcoming Projects
4.5 Insights on interest rate regime for general economy, and real estate lending
4.6 Insights on rental yields in commercial real estate segment
4.7 Insights on capital market penetration and REIT presence in commercial real estate
4.8 Insights on public-private partnerships in commercial real estate
4.9 Insights on real estate tech and startups active in real estate segment (broking, social media, facility management, property management)
4.10 Impact of COVID-19 on the Market
4.11 Market Dynamics
5.2 By Key Cities
5.2.1 Ho Chi Minh City
5.2.3 Quang Ninh
5.2.4 Da Nang
5.2.5 Rest of Vietnam
6.2 Company Profiles
6.2.2 Dat Xanh Group
6.2.3 FLC Group
6.2.5 Nam Long Investment Corporation
6.2.6 Coteccons Construction JSC
6.2.7 Hoa Binh Construction Group
6.2.8 Ricons Construction Investment JSC
6.2.9 Construction Corporation No.1 JSC
6.2.10 NEWTECONS Investment Construction JSC
6.2.11 Obayashi Viet Nam Corporation
6.2.12 Thai Son Construction Co.,Ltd.*