Vietnam now one of global property hotspots: Savills Group CEO
Updated at Thursday, 11 Apr 2019, 08:31
The Hanoitimes - The office markets in Hanoi and Ho Chi Minh City continue to be amongst the most exciting property sectors across the region.
Vietnam is now one of the global property hotspots in 2019 with good performance recorded in all segments, according to Mark Ridley, newly-appointed Group CEO for Savills ahead of his visit to Vietnam.
The reason that Mark Ridley chose Vietnam for his next stop after Australia in the upcoming Asia Pacific trip is that Vietnam is "one of Asia's most vibrant property markets and a long-term strategic area for Savills,” the group said in a note.
Mark Ridley. Photo: Savills
“Vietnam has come a long way since our office opened in 1995: it is now one of the global property hotspots in 2019. With robust fundamentals, positive macroeconomic outlook and continuous investment into infrastructure, the market is thriving across a multitude of real estate sectors,” Ridley stated.
Sharing the same idea, Managing Director of Savills Vietnam Neil MacGregor added: “We continue to see strength in the residential market, supported by the rapidly growing middle class, strong urbanization, as well as some of the best rental yields anywhere in the region.”
The office markets in Hanoi and Ho Chi Minh City continue to be amongst the most exciting property sectors across the region. Record occupancy levels, limited new supply and buoyant tenant demand have resulted in very attractive office rental growth. Strong investor demand in the office sector is expected to see as it continues to mature.
Managing Director of Savills Vietnam Neil MacGregor. Photo: Savills
The hospitality markets are benefiting from the growing numbers of both domestic and international tourists, as well as growing numbers of direct international flights. It is no surprise that hotel investors are descending upon Vietnam as the next regional hotspot.
Meanwhile, industrial real estate, fueled by growing FDI being poured into manufacturing, improved infrastructure and a competitive outlook when compared with other countries in the region, represents one of the most active sectors for M&A activity in 2019, MacGregor stressed.
He affirmed that many of international investors will increasingly be naming Vietnam as a top investment pick over the coming years.
Savills has now been in Vietnam for 24 years where the international real estate firm offers a wide range of services including advisory, agency, and property management.
Promising hospitality markets
In 2017, the United Nations World Travel Organization (UNWTO) listed Vietnam among the top 10 fastest-growing tourist destinations, according to Quo-global.
Growth in visitors to Vietnam for years. Photo: Quo-global
Meanwhile, Jones Lang LaSalle (JLL) also cast a vote of confidence, listing Ho Chi Minh City and Hanoi among the 26 most attractive cities for hotel investment worldwide.
International experts have argued that Vietnam should be ranked higher in terms of potential growth as the country offers fantastic opportunities for hotelier and investors, as hotel numbers are still low compared to other Asian tourism hotspots, Quo-global reported.
Michael Piro, COO of Indochina Land, real estate division of Indochina Capital, said he believed Ho Chi Minh City and Hanoi should be in the top 20 or 15 most attractive cities in the world for hotel investment as the number of hotels in Vietnam is still very small, compared to regional peers like Singapore, Thailand, and Indonesia.
GM of Novotel Ha Long Bay Jung Hyun Oh agreed with the idea, saying that the next big thing here should be much more investment right across the country like Phu Quoc, Da Lat, Nha Trang, Mui Ne need more luxury resorts, and Hanoi and Ho Chi Minh City need mid-scale brands.
Meanwhile, another idea stressed on mid-scale market, saying it is promising and could put pressure on luxury brands.
Given internationally-managed, affordable luxury products, the ‘affordable luxury’ concept is going to put pressure on 5-star hotels, Michael Piro said, adding that the big players will try to create similar brands or try to buy local brands to fulfil the affordable niche.
There is so much money-chasing in Vietnam real estate right now, especially in the hospitality sector, he noted.