Investors expect annual returns of 20-25 percent.
Ho Chi Minh City is in the top five of the Asia-Pacific region for real estate investment and development prospects, with annual returns expected to be up to 25 percent, according to a new report.
Emerging Trends in RealEstate Asia Pacific 2016, jointly published by the Urban Land Institute and consulting firm PwC, has ranked the city fifth for investment and fourth for development. Tokyo is at the top, followed by Sydney and Melbourne. Osaka and Ho Chi Minh City are neck and neck.
The Vietnamese city has emerged as one of the most promising markets in the region over the past two years, jumping from the 19th place in 2014 to one of the top five this year.
Foreign investors, mainly from Japan, South Korea and Singapore, are interested in the city's property market on expectations of an annual return of between 20 and 25 percent, according to the report.
The report also attributes the city’s rise as an attractive destination to the government’s efforts to stabilize the local currency, control inflation, ease property lending and improve market access for foreigners.
Global investors prefer entering Vietnam’s real estate market through mergers and acquisitions. They are laying eyes on a wide range of projects, from beach resorts, serviced apartments, residential buildings to hotels, mostly in the three major cities Hanoi, Ho Chi Minh City and Da Nang.
For instance, Singapore-based investment fund Frasers Centrepoint Limited has acquired a 70 percent stake in a luxury residential apartment project from a local realestate developer. The $100-million project, namely G Home, covers a one-hectare area in downtown Ho Chi Minh City.
Emerging Trends is based on the opinions of 343 internationally renowned real estate professionals, including investors, developers, lenders, brokers and consultants.