Upbeat outlook about Vietnam's real estate - Office, industrial segments to thrive despite challenges

HANOI: Experts from top real estate consulting companies in Vietnam have expressed optimism about development prospects of the real estate market, particularly regarding the office and industrial segments.

According to Savills Vietnam, despite numerous challenges, the interest of foreign investors in the Vietnamese market in general and real estate in particular continues to expand.

Fitch Ratings recently upgraded the country’s long-term national credit rating from BB to BB+, with a “stable” outlook.

In 2024, Vietnam’s gross domestic product growth rate is expected to reach 6%-6.5%, thanks to stable foreign direct investment and the government’s efforts to address real estate challenges, increase public investment and implement growth stimulation policies in a timely manner.

About 85% of the rapidly growing companies in Vietnam are committed to the environmental, social and corporate governance standard, creating an increase in demand for green-standard office space in the market.

By 2026, Ho Chi Minh City is expected to provide 300,000 sq m of new Grade A office space, such as The Nexus project or VP Bank Saigon Tower. Moreover, over 80% of the future Grade A and Grade B office supply in the southern economic hub will meet green standards.

Meanwhile, between now and 2026, Hanoi will see 15 new projects offering over 389,770 sq m of working space, with Grade A offices expected to account for 86% of the future supply. Green space is projected to constitute 18% of the future office floor area in the capital.

In recent times, many legal regulations have been passed such as the amended real estate business law, amended housing law and amended land law.

The head of the Hanoi and Da Nang offices at Savills Vietnam, Matthew Powell, described the passage of these laws as a positive signal for investment in the real estate market this year, boosting investor confidence.

Vietnam will welcome a large amount of new office supply in 2024, concentrating on the two main markets of Hanoi and Ho Chi Minh City, according to analysts from Cushman & Wakefield.

In the Asia-Pacific Office Outlook Report 2024 released recently, Cushman & Wakefield said Hanoi would welcome a total of 80,700 sq m of new office supply in 2024, mainly in the capital city’s central districts.

It noted that another 100,000 sq m of new Grade A office space was forecast to be put into operation in Hanoi in the 2024-2027 period.

Meanwhile, in Ho Chi Minh City, new Grade A supply is expected in central districts with the launch of three projects in 2024-2025, contributing a total of 118,700 sq m of premium office space to the market, according to the report.

About 81,000 sq m of additional Grade A supply is also expected in non-central districts during 2024-2026.

Cushman & Wakefield said economic instability had affected general office demand in Ho Chi Minh City as tenants became more and more concerned about costs. — Viet Nam News/ANN

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Vietnam , real estate , office


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