On
October 5th, the TPP agreement has finished negotiation.
According to experts, the signing of TPP will expand the opportunity for
Vietnam’s economy in general and real estate market in particular.
It
seems that foreign real estate investors are more sensitive hearing than
domestic investors in the anticipation of macroeconomic policy. The most recent
example, funds from Japan and the United States are massively investing
in the real estate market of Vietnam. These
includes Creed Group (Japan) committed to invest 200 million USD into the An
Gia Investment or the Global Emerging Market – GEM (US) has recently committed
to pour 20 million USD into Hoang Quan real estate company.
Currently,
there is a capital inflow from Japan landing in Vietnam. Many Japanese firms
have invested in clean agriculture in Japan and some areas in the Northern of
Vietnam to grow fresh vegetables and then export back to Japan. The Japanese
are very closely following the TPP negotiation process so they also have
investment plans in advance.
After
the TPP was signed then what people expect the most is the commercial real
estate market will develop better, which include industrial park, office,
retail space…as a result of the shift of investment capital flows.
In
order to leverage the special tax incentives and cheap labor cost in Vietnam, a
lot of businesses in Japan, US had planned about
moving factories from China to Vietnam and exported to Japan, US… The main
industries that are shifting include textiles, phone manufacturers, automobile
manufacturers…. The capital flow shifting will push up demand for commercial real estate.
When
the foreign enterprises arrived in Vietnam, they will have to build factories,
warehouses. On the other hand, they would create jobs, generate demand for
ancillary and service industries. Thus,
the system of services like hotels, trade centers, office rental and other
services will develop as a result.
Thus,
we can also expect M&A in the field of hotel, office, retail, including
resort real estate will thrive in the future. Moreover, after the success of
TPP, it will push up the industrial real estate market to
develop.
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