Boston, MA -- (SBWire) -- 10/01/2013 --The Vietnam Real Estate report examines the commercial office, retail and industrial segments in the context of a market slowly recovering from protracted economic destabilization and cautiously reintegrating domestic and international investment. With a focus on the three principal cities of Da Nang, Ho Chi Minh and Hanoi, the report covers the rental market performance in terms of rates and yields over the past 24 months and examines how best to maximise returns in the commercial real estate market that remains characterized by low rents and project delays though markedly improved through the second half of 2013.
After largely succeeding in its efforts to curb inflation, the Vietnamese National Bank has relaxed interest rates from a historic high of 15% to 7% as of July 2013. Efforts to reduce capital controls and lending restrictions have met with mixed success as the government continues its efforts to attract foreign investment through industrial park (IP) and Economic Zone (EZ) development.
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While office and industrial rents have remained low through 2013, demand for retail space has outstripped supply and has outperformed other sectors as an increasingly middle-income urbanized class boosts overall consumption rates. Top priorities through 2013 will be economic, increasing GDP growth and attracting more diversified sustained investment, as the market continues to relax restrictions on property and firm ownership.
While initial 2013 GDP growth estimates from the IMF were predicted at 5.5%, a disappointing Q12013 led other firms, notably Roubini Global Economics, to revise the growth forecast to 4.7%. Though growth may not reach expected levels through 2013, the government has made marked improvements both fiscally and monetarily in improving the overall investment climate. However, the banking sector remains fragile at best and lending, despite relaxed regulations, has remained difficult for international developers.
Rising geopolitical tensions with China have increased Vietnamese interest in the US export and investment market as part of a cautious strategic re-balance and as additional economic insulation should Chinese growth reduce quicker than expected. In an attempt to increase economic cooperation and mend relations with China, Vietnamese President Truoung Tan Sang met with Chinese President Xi Jinping in June 2013. Chinese investment and export demand is critical for the Vietnamese economic recovery; bilateral trade between both sides rose by 33.8% y-o-y to US$24.4bn in the first five months of 2013.
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Vietnam Real Estate Report Q4 2013 - New Market Research Report
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