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Singapore realty firms eye Vietnam: Savills chief
Around 60 Singapore property developers will invest afresh or increase their investments in Vietnam in the next three years due to the underlying potential, Troy Griffiths, the Head of Research and valuation of Savills Vietnam, says in an exclusive interview to Tuoi Tre.
What are the reasons for their interest?
With the large availability of capital in Singapore but room for new projects and return on assets (ROA) becoming more limited, Singaporean real estate developers will tend to invest elsewhere.
With new or increased investment waiting for high ROA and staying away from risky investment, they can look over the water to see Vietnam as a land of new opportunities for both Singaporean state-owned and private investments.
Realty investment in big cities like Hanoi and Ho Chi Minh City can bring an ROA of around 20 percent. And I think such high ROA rates can also come from other places here in Vietnam.
What market segment in Vietnam will be the brightest in the short, medium, long terms?
With an increasing young population of which more will become more affluent, rapid pace of urbanization, and Vietnam’s WTO integration roadmap, I’m very confident that the retail segment will be a bright star in the short term.
For the medium and long terms, affordable housing accompanied by good infrastructure and three-star, C-grade hotels will take that position.
While the former will benefit from the emerging young population and rising supply of apartment buildings, the latter will fit the rising demand from the young population and international guests for travel.
But with the recent tremor in Hanoi caused by the earthquake in Myanmar, there is talk that people are staying away from high-rise apartment buildings…
I have no idea about this, it may be true, and people may be aware of it.
But according to research done in New Zealand, it took people seven years to forget a disaster and come back to a disaster site.
In Vietnam, owning a house in still more popular than owning an apartment though it is changing gradually.
Thoai Tran
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