A great chance to invest in commercial property
Recent lending restrictions, investor outflow from corporate bonds, and increasing interest rates have made the residential real estate market less liquid. However, the commercial real estate market is still seen as having substantial growth potential.
According to a recent analysis by Cushman & Wakefield Vietnam, Vietnam's commercial real estate sector is still fairly young and mostly centred on Ho Chi Minh City and Hanoi. Vietnam ranks 15th in the world in terms of population (with almost 100 million people), and its urbanisation rate exceeds 40 per cent. Along with this, every year, a large number of migrants – particularly young people – arrive in major cities.
Vietnam's commercial property sector offers a great deal of promise since supply is restricted and demand is rising rapidly |
Meanwhile, only roughly 820,000 square metres of Class A office space is available in Ho Chi Minh City and Hanoi combined. This is much less than regional office markets such as Tokyo (about 10 million sq.m), Seoul (4.3 million sq.m), and Singapore (2.6 million sq.m).
Trang Bui, general manager of Cushman & Wakefield Vietnam said, "We can certainly see the increase in commercial demand from the new generation as they reach the age where they want to rent. They are willing to spend more money on enhancing their own experiences, including shopping, travel, healthcare, education, and supplementary services.
"All human needs, from the most fundamental to the most complex, must be met by real estate. We anticipate that Vietnam's investment in commercial property might reach tens of billions of dollars in order to meet the demands of the metropolis."
A total of 68 per cent of poll respondents from the Batdongsan website who were questioned about their plan to purchase real estate within the next year stated they would. The larger a consumer's real estate holdings, the greater their desire to purchase additional homes and land. Some 46 per cent of those who do not own any properties want to purchase real estate in 2023, compared with 79 per cent of those with two properties and up to 87 per cent of those with three or more homes.
Currently, several investors are concerned with choosing the optimal timing to invest in commercial properties.
Tran Khanh Quang, general director of Viet An Hoa Real Estate Investment, said that when investors observe the market rising, they fear missing out on possibilities and are thus compelled to participate. When the market declines and investors realise the future is bleak, they seek to protect their assets and sell as quickly as possible, resulting in a market decline.
According to Quang, if investors want to reduce risk, they should follow the market movement more closely until the second quarter of 2023. However, according to this expert, investors should not be timid if they have access to capital.
"Once you've determined the thing you want to purchase, spend around two weeks observing. In addition to evaluating the price level in the region, focus on the product's discount. If you see a price adjustment of 3 to 7 per cent during this period, it is probable that the investor has a pressing need to sell the commodities immediately. Investors should choose items about which they have prior knowledge in order to bargain and acquire them at a reasonable price. Before making a judgement, investors should also investigate the legitimacy of the goods," Quang said.
According to Trang, now is the optimal moment since most commercial properties have a finite lifespan regardless of how well they are maintained. When an asset's useful life expires, its value drops and it becomes outdated.
For instance, an outdated office building may not have a high-speed Internet connection or modern smart gadgets, so tech businesses and many other tenants will not choose to establish offices in these antiquated buildings, even if their locations are ideal.
In addition, in contrast to new urban development projects in other nations, the absence of preferential policies is one of the greatest hurdles to the growth of commercial real estate in Vietnam. Investors want additional assistance with legal and tax difficulties.
"Creating a more favourable and transparent business climate would function as a catalyst to speed up the growth of commercial real estate in Vietnam," Trang added.
See also
The OpusK by SonKim Land Triumphs at Vietnam Property Awards 2023
10:29 | 14/11/2023 Property
BCI Central celebrates the best in Vietnam architecture, building and design industry
07:05 | 28/05/2023 Property
M&A to pick up in property market
07:00 | 19/05/2023 Property
More than a million low-income homes to be built by 2030
07:00 | 07/04/2023 Property
Strong signals of positive year for industrial real estate market
10:25 | 27/03/2023 Property
Credit crunch burdens real estate market
06:00 | 03/03/2023 Finance-Banking
See more news
Hunting for real estate investment opportunities after Tet
09:32 | 03/02/2023 Property
Industrial real estate market recovers strongly
06:00 | 06/08/2022 Property
Banks tightening real estate credit to limit risks
06:00 | 06/05/2022 Economy
Bright prospects for Vietnam’s industrial real estate market
06:00 | 19/03/2022 Property
Vietnam, an ideal destination for real estate investors
06:00 | 28/01/2022 Property
Leaders pay tribute to President Ho Chi Minh to mark his 134th birthday
10:05 | 19/05/2024 News and Events
Hà Nội Metro announces profit from the Cát Linh–Hà Đông metro line
10:00 | 19/05/2024 Economy
Cement makers call for scraping of clinker export tax
09:00 | 19/05/2024 Economy
Tourism sector goes green for sustainable development
08:22 | 19/05/2024 Tourism
Digital transformation in logistics - a key to unlocking sustainable e-commerce and economic development
07:00 | 19/05/2024 Economy
Multimedia
Việt Nam plans to preserve ethnic minorities’ intangible cultures at risk of disappearing
06:00 | 15/05/2024 Lifestyle
The Hải Phòng Red Flamboyant Festival celebrated the city's special UNESCO status
16:49 | 13/05/2024 Lifestyle
HCM City: top spot in Việt Nam for slow travel lovers
09:00 | 13/05/2024 Tourism
The Anam Cam Ranh named among Vietnam’s best family hotels
06:00 | 11/05/2024 Vietnamese Brands
Nguyễn Dynasty Urns in Huế make it to the UNESCO Memory of the World List
07:00 | 11/05/2024 Lifestyle
Tax, land rent payment deadlines to be extended this year
06:00 | 19/05/2024 Policy
Ministry proposes tax filing deadline extension for 2024
06:00 | 17/05/2024 Policy
Viet Nam targets to have 2 million enterprises by 2030
07:00 | 15/05/2024 Policy
Law on Telecommunications hoped to promote development of new telecoms services
06:00 | 13/05/2024 Policy
Energy giants plan for national power plan
06:00 | 18/05/2024 Energy
Vietnam charts vision for sustainable, modern fisheries
06:00 | 16/05/2024 Industry
Vietnam should seize opportunity to join global semiconductor supply chain
08:00 | 15/05/2024 Industry
Việt Nam's wood industry strives to match sustainable wood demands
07:00 | 14/05/2024 Industry
Delegation from EU, Netherlands explore investment opportunities in Thai Nguyen
07:10 | 18/05/2024 FDI
Desk established in Dong Nai to support Japanese investors
09:02 | 16/05/2024 Investment
Vietnam should not miss opportunities to attract FDI
08:00 | 14/05/2024 FDI
New wave of Chinese investment
06:00 | 12/05/2024 FDI
Banks raise interest rates to attract depositors
16:47 | 17/05/2024 Finance-Banking
Credit access obstacles lifted for collective economic entities
06:00 | 16/05/2024 Finance-Banking
Government urged to narrow domestic, global gold price gap
08:36 | 15/05/2024 Finance-Banking
Biometric verification ensures safer money transfers
17:23 | 13/05/2024 Finance-Banking
First provincial biodiversity museum launched in Quảng Nam
06:00 | 19/05/2024 Environment
Enhancing informal sector’s role in EPR implementation
06:00 | 18/05/2024 Environment
Centre opened to serve environmental data integration, monitoring network operation
06:00 | 16/05/2024 Environment
Capacity building for policy makers, large emitters on ETS and carbon market
08:48 | 15/05/2024 Environment
Semiconductor investment prioritized
06:29 | 17/05/2024 Science - Technology
Full cyber stream ahead Bắc Giang focuses on digital society development
06:00 | 11/05/2024 Science - Technology
35 localities piloting four-wheel EVs for tourists, despite no official legal regulations
07:00 | 09/05/2024 Science - Technology
2024 VinFuture Prize records 1,469 nominations
06:00 | 07/05/2024 Science - Technology
HCM City to complete 183km of metro routes by 2035
06:00 | 17/05/2024 Society
Railway sector gets creative to attract passengers
07:00 | 15/05/2024 Society
Việt Nam’s largest high-speed ship service from HCM City to Côn Đảo launched
07:00 | 14/05/2024 Society
Central Highlands to become renewable energy hub
08:58 | 13/05/2024 Society
Vietnamese agricultural products to take part in Foodservice Australia 2024
15:08 | 17/05/2024 Vietnamese Brands
PV GAS launches Month of Workers
10:22 | 16/05/2024 Companies
National Brand Program promotes prestigious Vietnam
13:09 | 15/05/2024 Vietnamese Brands
Largest made-in-Vietnam bulk carrier launched
17:07 | 13/05/2024 Vietnamese Brands
Việt Nam plans to preserve ethnic minorities’ intangible cultures at risk of disappearing
06:00 | 15/05/2024 Lifestyle
The Hải Phòng Red Flamboyant Festival celebrated the city's special UNESCO status
16:49 | 13/05/2024 Lifestyle
Nguyễn Dynasty Urns in Huế make it to the UNESCO Memory of the World List
07:00 | 11/05/2024 Lifestyle
European Literary Days focuses on gender
06:00 | 09/05/2024 Lifestyle
Tourism sector goes green for sustainable development
08:22 | 19/05/2024 Tourism
Vietnamese tourism information centre opened in India
08:00 | 18/05/2024 Tourism
Mysterious 'floating' lake discovered in Quảng Bình
16:54 | 13/05/2024 Tourism
HCM City: top spot in Việt Nam for slow travel lovers
09:00 | 13/05/2024 Tourism