More capital from overseas flowing into real estate arena

International capital is flowing strongly into Vietnam, positioning real estate as one of the sectors set to benefit most clearly after a challenging few years.

- By Bich Ngoc

Many real estate investors are no longer looking for speculative ventures

At the forum on foreign capital in real estate held in Ho Chi Minh City last week, Dinh The Hien, director of the Institute of Informatics and Applied Economics Research, said that Vietnam is witnessing a valuable opportunity to attract foreign capital into its market.

According to Hien, a number of international companies are prepared to commit capital at prices exceeding initial development costs in order to expand industrial park projects in Vietnam.

"This reflects confidence in the country's long-term outlook, as well as expectations surrounding the next wave of global manufacturing relocation. The trend is considered a positive signal, indicating that Vietnam is gradually becoming an increasingly important link in newly emerging supply chains," Hien said.

Placed in a regional context, Hien noted that Vietnam is developing a clearer competitive edge over economies such as Thailand, Indonesia, and Malaysia.

"While some countries are maintaining growth of around 3 per cent, Vietnam continues to sustain a significantly stronger pace. If this trend persists, the development gap between Vietnam and regional peers could narrow faster than previously forecast," he added.

Ngo Thanh Huan, CEO of FIDT Investment Consulting and Asset Management, classified foreign capital flowing into Vietnam's real estate market into four main groups, each with distinct risk appetites and investment strategies.

The Northeast Asian investors including those from Japan, South Korea, and Taiwan, tend to have a moderate risk appetite, remains relatively cautious, and places strong emphasis on operating models and project logic.