Foreign investors start to move into Vietnam's property market

HANOI (Oct 2): Foreign investors are increasingly focusing on the Vietnam property market because of its long-term investment potential and the
country's drastic revamping of its policies, reports the Vietnam News Agency.

The property market witnessed strong foreign capital inflows in both direct and indirect investments at the beginning of the year when the market was recovering after years of being in limbo.

Statistics by the Ministry of Planning and Investment show that foreign investors have so far placed a total of US$2 billion in FDI in the real estate sector in the country this year.    

Besides, foreign funds were increasing investments in property and companies, and experts forecast that the trend would continue increasing amid the ongoing market recovery.
   
Among others, in late July, Japan's investment fund Creed Group concluded a deal worth US$200 million for a 20 percent stake in An Gia Investment, advancing preferential loans to the firm to acquire new housing projects, based on the potential of the real estate market and the anticipated huge housing demand by the young population.

Also, Ibeworth Pte Ltd, a subsidiary of Singaporean giant developer Keppel Land, became a large foreign stakeholder of Nam Long Investment Corporation after spending 140 billion VND (US$6.42 million) to buy 7.1 million shares or more than 5 percent stake in Nam Long.    

Industry experts say attracting investments from foreign funds would ensure numerous benefits to domestic real estate companies as they had stable and long-term capital.    

According to CEO of Jen Capital, Nguyen Vinh Tran, foreign funds are seeking long-term investments in Vietnam's property market, seeing good opportunities in the country's policy reforms.    

However, Tran said foreign funds wanted developers of transparency and prestige.

Meanwhile,mergers and acquisitions is emerging as a new strategy for foreign investors to rapidly enter Vietnam's property market. In exchange, they are expected to bring better financial resources and higher standards of corporate governance.