Weekly Vietnam Property News (10/07 – 16/07, 2020)

The industrial real estate welcomes a series of world giants

A series of technology giants in the world such as Apple, LG, Panasonic … are planning to choose Vietnam as a destination for supply chains and post-covid production – 19. Open doors and have attractive policies. This investment wave will help Vietnam’s industrial real estate boom in the coming time.

Although Covid-19 caused temporary difficulties for the company’s upcoming plans. However, this unit assessed that industrial real estate in Vietnam was still very attractive to investors.

In the second quarter, the average land rent increased by 9.7% over the same period last year, reaching 106 USD / m2 / lease cycle. In contrast, the price of ready-built factory buildings is still stable at 3.5-5.0 USD / m2 / month, because the contract is only short of 3-5 years and tenants are also susceptible to the impact of the pandemic.

Tunnel of over VND 500 billion at the northwest gate of Ho Chi Minh City is about to open

N2 branch of An Suong tunnel project (District 12) with total investment of VND 514 billion will open traffic on July 15. Previously, the N1 branch of the project was opened from March 2018.

The project of tunneling to open traffic in both directions will not only help relieve traffic congestion around An Suong intersection area but it also has a wider meaning for the Northwestern area of ​​Ho Chi Minh City, helping connect linking the city area with the provinces of the East, the West and vice versa.

Along with the completion of the An Suong tunnel project, in the future, the Northwest area will have more development potential when important infrastructure projects are being implemented such as Ho Chi Minh City – Moc Bai Expressway. (Tay Ninh) has a total investment of more than 10,600 billion dong; Expansion project of To Ky street, expansion of National Highway 1A …

Stable supply of Commercial centers

Commercial centers, as of the end of quarter 2/2020, total supply reached about 1.5 million m2, stable quarterly and up 5% year on year.

In the second half of 2020, more than 96,000m2 of retail space will enter the market, of which, non-CBD areas will account for 84% of the market share. Most of the non-CBD projects are retail podiums that mainly cater to the needs of local residents. With low retail basin, it is difficult for landlords to find long-term tenants. The trend of moving outside the CBD may lead to a gradual reduction in rents.

Thanks to effective disease control as well as positive economic prospects, the confidence of landlords, especially in the central area, is increasingly strengthened.

When shoppers’ traffic has recovered since June, retail centers outside the mall have proposed a 15% reduction in rental rates or a reduction in service charges of up to US $ 2 / sqm / month to assist tenants. The developers in the CBD have fewer support programs due to the long-term tenants.

After the social gap period, Ho Chi Minh City retail sales returned to a monthly growth momentum of 20% in May and 5% in June.

Vietnam real estate increased attractiveness when it entered the “semi-transparent” group

According to the Global Real Estate Transparency Index (GRETI) by JLL and LaSalle, in 2020, Vietnam ranked 56 globally in the level of transparency in the real estate industry, up 4 places compared to the table. ranked in 2018 and moved from the “less transparent” group to the “semi-transparent” group. In particular, the development of the two urban centers of Hanoi and Ho Chi Minh City has helped Vietnam promote to a new transparency milestone. This is a positive step showing the transformation of our country’s real estate market.

Improving the transparency index will help Vietnam attract more foreign investment. This includes access to legal system and project information.

Investment in real estate technology (proptech) will be an indispensable trend in the future for Vietnam to improve transparency. The Covid-19 pandemic has contributed to promoting the development of data types and blocks of real estate data. The real estate industry in Vietnam is still quite traditional, but we can hope for a future home purchase transactions made with just one click.

There will be more real estate supply in the future

It is forecasted that from now to the end of the year, supply in many segments will continue to be pushed to the market.

Typically in the Hanoi market, about 10,000-15,000 apartments are expected to officially open for sale in the second half of 2020, mainly in the affordable and mid-end segments. Demand for rental investment is forecast to be unable to recover in the near future due to slowing economic growth, shrinking businesses, which leads to staff cuts as well as hiring budgets.

In Ho Chi Minh City apartment market, prices still tend to increase despite the unstable economic situation, which is forecasted to have about 15,000 – 20,000 apartments offered for sale in the second half of this year.

Similarly, the selling price of the mainland market continued to rise and set a new record of US $ 5,277 / m2 of land, up 35.9% year on year and 5.2% quarterly. The total number of houses sold in the second quarter increased by more than 50% compared to the first quarter, estimated that there will be 1,500-2,000 terraced houses for sale in the next 6 months.

Compiled from many sources by LOOKOFFICE

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