Developers look to foreign investors to diversify capital sources
Amid narrowing credit sources and rising lending interest rates, property developers have been diversifying their capital mobilisation channels, including calling for foreign investment.
Real estate ranked second in attracting FDI in the first half of 2018 (Photo: VNA)
Hanoi (VNA) – Amid narrowing credit sources andrising lending interest rates, property developers have been diversifying theircapital mobilisation channels, including calling for foreign investment.
In the first half of 2018, real estate rankedsecond in attracting foreign direct investment (FDI) when it received 5.54billion USD, accounting for 27.3 percent of total investment capital registeredfor this sector.
Troy Griffiths, Deputy Managing Director ofSavills Vietnam, said stable macro-economic development has fuelled thedomestic market’s growth and strongly attracted FDI. It is a relativelyfavourable start for 2018 with promising movements in all real estate segments.
In the stock market, while the benchmarkVN-Index on the Ho Chi Minh Stock Exchange has become stagnant recently, someparticularly big investments have still been poured into property projects inthe near future.
Good governance, improved accounting standardsystems and a stable stock market have all helped persuade foreign investors tobuy property stocks, he noted, adding that high profitability is also a magnet drawinginvestors to the Vietnamese market, compared to other markets in the region.
Rea estate developers have been stepping uprestructuring, aligning their strategies with the market, and investing inprojects with favourable locations and transport infrastructure. They arestrongly switching their focus to the affordable segment with prices matchingthe market demand.
Meanwhile, mergers and acquisitions (M&As)are also vibrant in the property sector. FDI poured into the market mainlycomes from Japan, the Republic of Korea, Singapore, Hong Kong and Taiwan(China), the US, and recently, China.
Le Hoang Chau, Chairman of the HCM City RealEstate Association, said FDI capital, one of the indicators of Vietnam’seconomy, has been on the rise in recent years. Real estate often ranks third inFDI attraction, adding an important source of capital for businesses whencommercial banks are tightening loans for property projects.
Troy Griffiths said real estate is alsoattracting domestic investors who want to pour money into housing projects.Additionally, in a period when Vietnam’s tourism is recording spectaculardevelopments, leisure property and hotel projects will continue to have chancesto receive more investment.-VNA
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