Vietnam’s Economy Expected To Thrive Despite Global Difficulties: Industry Experts

Experts from Savills Vietnam have highlighted some significant merger and acquisition (M&A) deals in Vietnam during the second quarter of 2023. One notable deal was Everland Opportunity IX’s purchase of three hotels in Vietnam and Indonesia from Strategy Hospitality Holdings Ltd. for US$106 million. These deals serve as examples of the promising opportunities that Vietnam’s real estate companies offer to attract foreign investors.

Vietnam Remains Attractive for Investors

Vietnam is drawing significant interest from investors due to its positive recovery capacity and the flexibility of its economy, as stated in a recent report by Savills Vietnam (Photo: Vietnamnet).

Other examples include Keppel and Keppel Vietnam Fund acquiring a 49% stake in two residential projects in Thu Duc city, Ho Chi Minh City, with an area of 11.8 hectares from Khang Dien Group for US$136 million. THT Development Co. Ltd. also transferred 1.13 hectares of land in Starlake City, Hanoi, to CMC Technology Group to build an innovation center with an investment of US$76 million.

Vietnam’s medium-term outlook remains positive, according to Troy Griffiths, Deputy Managing Director of Savills Vietnam. The reduction in interest rates by the State Bank of Vietnam (SBV) has stimulated economic growth by lowering the cost of capital for borrowers and credit institutions, despite short-term inflation pressures and a decline in production and exports in the first half of 2023.

Griffiths stated that even though total foreign direct investment (FDI) decreased, FDI inflows into Vietnam are presenting numerous promising opportunities. The Savills Vietnam report showed a significant increase in newly registered projects and capital, particularly in the manufacturing sector. The FDI market in Vietnam is currently deemed attractive due to improvements in infrastructure development, administrative reform, and investment in innovation hubs.

In the near future, current interest rates will continue to support growth and FDI inflows. According to VNA, new regulations supporting debt restructuring will have positive implications for real estate and promote transparency, which will contribute to sustainable long-term growth, added Griffiths.

First Half of 2023 Witnessed Increasingly Large Investment Deals

According to Savills, the shift to the global supply chain has created many new opportunities and challenges. Therefore, the Vietnamese market needs to seize trends and fully and quickly access opportunities (Photo: aseanvietnam.vn).

Vietnam’s Purchasing Managers’ Index (PMI) and the Index of Industrial Production both experienced positive growth in the first months of 2023, as stated by Thomas Rooney, Senior Manager of Industrial Services at Savills Hanoi. He also mentioned that despite a decline in global aggregate demand, the market continues to record significant investment deals, indicating favorable business opportunities for local companies. Rooney emphasized the need for prompt resolution of problems and preventative measures by the State to promote economic development.

Until the end of 2023, the attraction of local suppliers of ready-built factories, such as Hai Phong, will increase in the eyes of investors and tenants. Bac Ninh is also an ideal choice for domestic and foreign tenants as well as investors interested in developing ready-built warehouses, he noted.