Vietnam facing office property crisis as supply outstrips demand

Office rents in Ho Chi Minh City have plunged by up to 50% and the trend is expected to continue as supply outstrips demand.Belt tightening due to the global economic downturn is also having an effect, according to forecasts from various international analysts.Global real estate companies Cushman & Wakefield, Savills and CB Richard Ellis said top quality office space rents have fallen from a peak at the beginning of last year of $70 per square metre to $43 this year and could go as low as $30.Rents for second-class space have fallen from about $45 per square metre to $28 to $40 and third-class office space from $39 to $14 to $25.

The Ho Chi Minh City housing market

The study, on the impact of WTO entry on the city’s realty market done by the HCMC Institute of Development Studies, said 50 percent of all foreign investment in the city in the last two years has flowed into realty.Foreign firms invested US$1.5 billion in 24 real estate projects in 2007, accounting for 50 percent of all projects and investment in the sector, and double their cumulative investment between 2000 and 2006.They rose to US$3 billion in 45 projects last year.In fact, most major projects and five-star hotels are fully or partly invested by foreign firms.

WTO entry sees HCM City property market boom

The study, on the impact of WTO entry on the city’s realty market done by the HCMC Institute of Development Studies, said 50 percent of all foreign investment in the city in the last two years has flowed into realty.Foreign firms invested US$1.5 billion in 24 real estate projects in 2007, accounting for 50 percent of all projects and investment in the sector, and double their cumulative investment between 2000 and 2006.They rose to US$3 billion in 45 projects last year.In fact, most major projects and five-star hotels are fully or partly invested by foreign firms.Though domestic investment is limited, the sharp increase in foreign direct investment in the sector would make an important contribution to the city’s urbanization and infrastructure improvement.

Real estate has potential but faces obstacles

HCM CITY — Despite great volatility this year, the Vietnamese property market is still considered one of the most attractive in Asia, a seminar that ended in HCM City on Wednesday heard.

Delegates from more than 70 domestic and foreign property companies told the two-day seminar held jointly by the city’s Foreign Affairs Department and the Singapore-based International Quality and Productivity Center that the market in Viet Nam has many advantages, one of them being the relentless rise in foreign direct investment.

FDI worth US$45.28 billion was committed in the first seven months, almost five times the figure for the same period last year. Of this, $21.4 billion, or 48 per cent, was in the real estate sector. HCM City attracted the second-highest amount among all provinces and cities with US$7.9 billion, 90 per cent of it in the property sector.