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Future’s so bright, City needs shades
The southern hub of Viet Nam, HCM City, will still be an attractive market for real estate development in the coming year.
The Emerging Trends in Real Estate - Asia Pacific 2009 report released earlier this month by the USA-based Urban Land Institute and PricewaterhouseCoopers had an overall positive real estate market assessment for HCM City.
Development prospects for HCM City remain high; overall it is ranked 2nd after Bangalore and preceding Mumbai, according to the report.
The survey ranks HCM City as the strongest development market in Asia Pacific; top Asia Pacific city in which to buy hotel space; top market for investment in the office sector; and one of the most promising markets for apartment rental investments.
"Survey results show that HCM City continues to be a market of immense interest to property developers and investors. The opportunities are evident to all," said David Fitzgerald, HCM City-based tax partner and real estate industry expert for PricewaterhouseCoopers Viet Nam.
"The report highlights the interest from investors in buying properties in all sectors, but they are hindered by the limited supply of stock. Development opportunities are going to continue to be key. 2009 will be a challenging year with access to credit likely to be a key obstacle, but developers that are able to take a long term view, and that have access to cash, are likely to consider the city for new projects," he added.
However, in terms of investment prospects, Tokyo, Singapore and Hong Kong rank first, second and third. HCM City is ranked 13th, lower than in 2008 when it was 8th and in 2007 when it ranked 12th.
Real estate industry experts in Asia anticipate falling asset prices, widening cap rates, deteriorating debt markets, increasing foreclosures and bankruptcies, and plummeting transaction volumes as the Wall Street crisis travels the globe.
The report provides an outlook on Asian Pacific real estate investment and development trends, real estate finance and capital markets, and trends in the property sector and metropolitan area.
The investment landscape has undergone a substantive and possibly permanent change in the region. Asian banks have rerated real estate for risk, and with the re-pricing of debt, investors will demand higher yields. The days of financing property via highly leveraged borrowing appear to be gone.
The report is based on the opinions of internationally renowned real estate professionals, including investors, developers, property company representatives, lenders, brokers and consultants.
The survey covered twenty key cities in Asia, including HCM City as in earlier years.
It is the third Asia Pacific edition of the highly regarded Emerging Trends in Real Estate® annual investor survey.
Viet Nam News
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