“Vietnam continue attracting foreign investors in 2018 and next ten years. Apart from subjective factors, in terms of objective factors; domestic market with the size of significant population compared with other countries, young and dynamic population, middle class is increasing, urbanization grows fast pace will be make force the demand not only for housing market, also retail market, office building, etc.”

Vietnam continue to hold strong appeal to investors more inherent risks and a complex and developing suite of hedging solutions available. While both yield spreads and economic fundamentals continue to reinforce appetite for real estate investment, the limited investible stock is limited, suggesting that interest is being driven more by longer-term potential than shorter-term returns.

Investors may find Vietnam’s existing yield spreads appealing on paper but its greater appeal is by far its longer term economic growth potential. Oxford Economics forecasts its GDP growth in 2018 GDP to be 6.65%, higher than other major ASEAN countries. Vietnam’s stable political environment and solid economic growth prospects provide a solid foundation for the next stage of growth in its real estate markets. As rosy as the background looks, average real estate investment turnover from 2012- 2016 was just US$760 million per annum, meaning that there is a limited pool of investment grade assets.

While Vietnam has seen previous property cycles correct sharply, the fundamentals now appear more supportive for a sustainable upturn in the property cycle. Further liberalisation of the economy and removal of foreign holding limits on Vietnamese public companies are also favorable. Foreign investors may have opportunities to build up the stock of prime commercial assets over the next five to ten years.

Song Chau Group.