Real estate market rides high in Vietnam

The industrial real estate sector has been holding steady recently. tinnhanhchungkhoan.vn

HANOI (Vietnam News/Asia News Network): Favourable factors, including the Government’s support packages and the reopening of tourism, have given a fresh impetus to the real estate market.

Many real estate firms are optimistic about the future, announcing plans for land development and new project constructions to earn higher profits in 2022.

Notably, Hòa Phát Group announced a land fund of 2,000ha for this year, including 700ha for city projects.

Dat Xanh Group has 2,310 ha with two projects under construction, Opal Park View and Opal Park City, which will be on sale in 2023.

DRH Holdings JSC sets a profit target of VNĐ212 billion (US$9.3 million) in 2022, more than 13 times higher than the figure in 2021.

Development Investment Construction JSC aims to make a pre-tax profit of VNĐ1.9 trillion, up 59 per cent year-on-year.

Hải Phát Homes JSC is going to put units up for sale in several provinces, including 1,000 in Quảng Ninh, 500 in Hòa Bình, its project HP Intermix in Bắc Giang and many others in Cao Bằng and Lào Cai.

Century Land JSC plans to raise its capital, from VNĐ2 trillion to VNĐ4.6 trillion, through the issuance of 262 million new shares and estimates its revenues at VNĐ10-12 trillion in 2022, about double last year’s figures.

Lê Thị Phương Lan, head of the Investment Consulting Department at Savills Hanoi, believes that the Vietnamese real estate market is becoming more appealing not only to domestic investors but also foreign investors.

Some international organisations have upgraded the country from a frontier market to emerging market or strategic market, resulting in more capital inflows.

David Jackson, general director of Colliers Vietnam, shares this view.

He said investors with deep pockets sought investment opportunities in the market as they believe a new business cycle is coming.

Infrastructure projects in provinces and the economy’s recovery would be the driving forces behind the market pick-up.

Đỗ Quý Duy, business manager of Hải Phát Homes, opined that there would be optimistic investors and cautious investors in the market.

The former would put their money in real estate projects located in prime locations and resort projects with long-term legal ownership.

Meanwhile, the latter would prefer real estate projects with high liquidity in big cities such as Hanoi and HCM City.

Nguyễn Văn Ngọc, director of RB Land JSC, underlined this year as a bright year for the market but warned of “fear of missing out” (FOMO) on cash flows in the coming months.

He attributed the surge of FOMO cash flows to the proliferation of F0 investors and the sales of stockpiled products around mid-year.

It is also worth noting that two winning bidders in Thủ Thiêm Land Auction have pledged to come up with the money to pay for their lands purchased.

Experts believe the pledge, if kept, will boost investor confidence in the market, generating a positive impact on real estate stocks.

“Their fulfilment of pledge would boost the market morale, uplifting real estate stocks,” said economic expert Đinh Trọng Thịnh.

He also forecast that the market would continue to grow thanks to the economy’s recovery and capital inflows by foreign investors.

Notably, industrial real estate, resorts and residential housing were among the sectors expected to bring high profitability.

“Accordingly, real estate stocks still have ample room for price rises,” he added.

According to SSI Securities Corp., real estate firms led the bond market in issue volume in 2021.

They issued VNĐ318 trillion worth of bonds, accounting for 44 per cent of total issues, up 66.3 per cent year-on-year.

The number of real estate issuers increased from 141 in 2020 to 193 last year.