Foreign investment in property sector in seven months surges 78 per cent

High-end apartment buildings in Ho Chi Minh City (Photo: VNA)

Hanoi – Foreign investors injected more than 2.87 billion USD into the Vietnamese realty market during January-July, a year-on-year surge of 78 per cent, according to the Ministry of Planning and Investment (MPI)’s Foreign Investment Agency.

The agency said that foreign investors funneled their money in 18 out of the 21 economic sectors, with the processing and manufacturing industry attracting the largest share of over 12.65 billion USD, or 70.3 per cent of the total.

The realty industry came second. Total newly-registered capital in the property market was 1.94 billion USD while 1.14 billion USD was disbursed during the seven-month span.

Experts from property consultancy firm Savills said Vietnam has opportunities to welcome the fourth wave of foreign direct investment (FDI), mainly into high-tech sectors like electronics, semiconductor, AI and renewable energy whose development has a direct impact on the industrial property on the back of an increasing demand for warehouses.

Thomas Rooney, Senior Manager of Industrial Services at Savills Hanoi, said that it is necessary to handle the energy issue at industrial parks to maintain their attractiveness to foreign capital in the coming time.

That the Vietnamese Government has sketched out a plan to build a 1,500 MW thermal power plant in the central province of Nghe An, which is expected to become operational in 2029-2030, is a notable effort to lure foreign investors, he added.

He also suggested industrial parks pay due attention to green trend as there is an increasing number of foreign businesses focusing on the development of the circular economy while Vietnam has eyed to achieve net-zero carbon emissions by 2050.

A Savills survey showed that around 80-85 per cent of the foreign investors impose requirements on environment, social and governance (ESG) responsibilities, and Vietnam has climbed on the bandwagon.

According to statistics from the MPI, up to 50 per cent of cities and provinces across the nation will plan to transform their existing industrial parks into eco ones, and 8-10 per cent of the localities will develop new eco industrial zones, which are among the factors that help increase their attractiveness to foreign capital.

Total registered foreign capital in Vietnam during January – July amounted to more than 18 billion USD in Vietnam, a year-on-year increase of 10.9 per cent.

The disbursed investment was recorded at over 12.55 billion USD, up 8.4 per cent as compared to the same time last year.

Foreign investors injected 10.76 billion USD in 1,816 new projects, rising 35.6 per cent and 11.6 per cent, respectively.

Meanwhile, 734 projects had their capital adjusted up with a total amount of more than 10.76 billion USD, down 0.3 per cent in the project number, and up 19.4 per cent in capital year-on-year.

Capital contributions and share purchases fell 45.2 per cent to 2.27 billion USD.

Registering 6.52 billion USD, Singapore was the biggest investor among the 91 countries and territories investing in the nation in the reviewed period, followed by China’s Hong Kong, Japan, China, and the Republic of Korea.

The foreign investors landed their capital in 48 cities and provinces across the nation. Bac Ninh attracted the largest amount of foreign capital with nearly 3.2 billion USD while in the second and third places were Quang Ninh and Ho Chi Minh City, luring over 1.56 billion USD and 1.55 billion USD, respectively.

The foreign-invested sector enjoyed a trade surplus of around 27.9 billion USD (including crude oil), and contributed greatly to the nation’s trade surplus of 12.4 billion USD during the seven-month period.

As of July 20, Vietnam was home to 40,777 valid foreign projects with total registered capital of 487 billion USD. Some 309.7 billion USD had been disbursed by the time.

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