Japanese capital continues flowing into the real estate sector

Mitsubishi and Vietnamese Phuc Khang Groups established a joint venture - Phúc Khang Mitsubishi Corporation Holding (PKMC), specializing in developing Phuc Khang’s land fund valued at over $500 million.

Japanese have poured big money into the Vietnamese real estate market through investments in Vietnamese real estate firms such as An Gia, Hung Thinh and Nam Long.

More recently, Tien Phat Real Estate JSC and Sanyo Homes from Japan organized a launch ceremony of Ascent Lakeside project in district 7. 

Mamoru Sera of Sanyo Homes said the conglomerate chose Vietnam for its housing development projects outside Japan because the country shows rapid economic development.

Le Hoang Chau, chair of HOREA (HCMC Real Estate Association), said the real estate sector in Vietnam would see stable growth in the coming time. Affordable houses, offices for lease and A-class apartments will still be in high demand, while 3-bedroom high-end apartments and condotels remain unknowns. 

Therefore, Chau believes the increased presence of Japanese investors in Vietnam should be attributed to Vietnam-Japan economic relations rather than market performance.

An FIA (Foreign Investment Agency) report shows that Japan topped the list of 115 countries and territories which had FDI in Vietnam in 2017. The investment capital committed by Japanese investors reached $9.11 billion, accounting for 25.4 percent of total FDI capital pledged.

Analysts said the No 1 position held by Japanese investors on the list of biggest foreign direct investors is not a surprise at all. 

Four years ago, the Japanese government began promoting investments overseas as a good solution to the trade balance of a country with an aging population like Japan. 

The Vietnamese real estate market attracts investors not only because of the young population, but also because of rapid urbanization. 

A World Bank report showed that the pace of urbanization in Vietnam was 3 percent in 2010-2015, equal to Thailand’s and higher than Indonesia, Singapore and the Philippines. The figures are expected to rise to 2.6 percent in 2015-2020 and 2.2 percent in 2020-2025, the highest level in the region.

A report  showed that of the 19 business fields which most attract foreign investment, real estate ranks third with registered capital of $2.04 billion, accounting for 7.4 percent of total FDI (foreign direct investment) capital in Vietnam in the first 10 months of the year.

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Thanh Mai