Hanoi (VNS/VNA) - Vietnam needs to renew its real estate market toattract more foreign investors and increase the quality of foreign directinvestment (FDI) in the sector, according to experts.

Director of JonesLang LaSalle (JLL) Vietnam Dang Van Quang said regulatory reforms will helpimprove transparency, making Vietnam's real estate market more attractive toforeign investors.

This is becausefinding available land areas for investment will be a challenge for developersand investors next year, he said.

Authorities need tocontinue reforms of administrative procedures to support foreign investorspouring capital to Vietnam, according to experts.

With the Government'sefforts in proposing, issuing and implementing policies to encourage investmentas well as improving the legal framework, investment in Vietnam's real estatemarket is expected to grow in all segments, especially in FDI capital.

"The growth isexpected to happen in all segments and the industry will be the hottest sectorthis year, driven by the movement of foreign enterprises to Vietnam and thepositive impact from large trade agreements, like the CPTPP and EVFTA,"Quang was quoted by the Nha bao & Cong Luan (Journalistand Public Opinion) newspaper as saying.

According to Le HoangChau, Chairman of the HCM City Real Estate Association, FDI is reallyimportant. As production moves to Vietnam, capital flows also shift intoindustrial, offices and housing property. Therefore, enterprises should beencouraged to build cooperative relationships with foreign partners.

JLL Vietnam’srepresentative also said foreign investors had continued to show stronginterest in Vietnam's real estate market. However, the long approval processfor projects might now affect new developments this year and beyond.

Economist Nguyen TriHieu said some local businesses had restructured sharply to list on the stockmarket and cooperated with many foreign investment funds to take part inproject implementation. This showed domestic real estate firms needed foreigncapital.

However, Hieu saidthat it was still necessary to screen foreign investors because someenterprises that did not have enough capital often asked to reduce the projectscale and extend the schedule to keep licences and land use rights.

"Statemanagement agencies need to re-evaluate projects that are slow or withdrawprojects to find investors who have sufficient capital and ability, avoidingwasted land and money," Hieu said.

According to Quang, Vietnamis still one of the most popular destinations in Southeast Asia for foreigninvestors. This is due to the Government's investment incentives, politicalstability and economic growth. Vietnam has also been proactively improvingtransparency in the real estate market.

The experts saidforeign investment had helped the domestic real estate industry witnesspositive changes, including diversified designs. It had also helped the marketbe more transparent and increase competitiveness, quality, utilities, services,technology and operational management.

However, merger andacquisition (M&A) deals in the real estate sector have faced difficulties,including a decision to stop the approval of new projects in HCM City to reviewlicensing, according to Quang. This means investment opportunities are lost.

In addition, theState Bank of Vietnam’s tightened capital policies for the real estate markethave also affected the M&A deals for domestic investors.

Property research andconsultancy companies said foreign investors from Japan, the Republic of Korea,mainland China, Hong Kong and Singapore have poured the most capital intohigh-end and luxury apartments.

According to theM&A Vietnam Market Report 2018-2019, Japanese investors have been tendingto shift their attention from the finance and consumer goods sector to realestate in 2018-2019.

Among them, the dealbetween Sumitomo Corporation and BRG Group of Vietnam was granted an investmentcertificate for the Smart City Project in Dong Anh district, Hanoi, with totalregistered capital of 4.14 billion USD.

In the first eightmonths of this year, foreign investors poured most into the manufacturing andprocessing sector totalling 15.7 billion USD, or 70 percent of the nation’stotal FDI. This was followed by real estate with 2.32 billion USD or 10 percent,and the wholesale and retail industry with 1.2 billion USD or 5.2 percent,according to the Foreign Investment Agency./.