Vietnam continued to see strong interest from developers for large-scale mixed-use projects with a residential component in major cities in the third quarter of 2017, according to the Asia Pacific Investment Quarterly from Savills.
The report noted that, in September, VinaLand Limited, the real estate investment fund of the Vietnam-based asset manager VinaCapital, sold its stake in VinaSquare, a mixed use 3.1-ha development site in a prime location in Ho Chi Minh City’s District 5, which they acquired a decade ago, to Tri Duc Real Estate for a total consideration of $41.2 million.
In addition, its 182-ha My Gia Project, one of the largest township projects in Nha Trang, also changed hands to a local developer for over $11 million.
In Hanoi, Growing Sun Investment picked up the prime 4.2-ha Diamond Rice Flower complex project from Kinh Bac City Group, a well-known listed company. Similarly, FLC Group won the bid for the land use rights of the 6.4-ha DM1 land plot, located in Nam Tu Liem district, for nearly $38 million, to build townhouses, villas, and apartments.
Vietnam’s real estate market is trending upwards overall, across all sectors, with a particularly positive outlook for the office market.
Despite an 8 per cent increase year-on-year in new supply, Ho Chi Minh City continued its robust trend with high average occupancy of approximately 95 per cent and with average Grade A rents up 8 per cent year-on-year.
Hanoi has also started to catch up with significant improvements in net effective rents and occupancy rates for Grade A and B buildings. Total office stock in the capital was approximately 1.6 million sq m with occupancy rates of 93 per cent, an increase of 6 per cent year-on-year.
Market rentals for both Grade A and Grade B have increased slightly quarter-on-quarter, by approximately 2 per cent and 9 per cent, respectively.
With continued strong demand on the back of healthy foreign direct investment (FDI) and robust GDP growth, Savills expects to see an extremely low vacancy rate across all office grades and average rental growth of approximately 8.4 per cent per annum in the next three years.
Vietnam Economic Times