The flow of money into London-listed property stocks is running towards Hong Kong, China, India, Japan, Macau and Viet Nam.
A Financial Times article entitled “Ho Chi Minh City awaits” that ran on October 8 called the trend “perhaps a logical step” as property markets in some Asian countries are expected to perform in line with their fast-growing economies.
According to the paper, the three funds of Vinaland, JSM Indochina and Aseana Properties have some or all their exposure to Viet Nam due to its lack of high-end real estate, which is in constrast with increased investor interest in the country.
“There is a lack of real estate product right across the board, from housing to offices to hotels," Lai Voon Hon, President and Chief Executive of Ireka Development Management was quoted as saying. He also added that demand for office building is set to soar as more multinational companies set up offices in Viet Nam.
Envisioning the potential business opportunities in Viet Nam, Aseana Properties, has began shifting its focus on Asia from Malaysia to Viet Nam. The fund began life with a 128 million USD portfolio of five Malaysian assets; now the fund intends to expand in the coming months to Viet Nam, where it has drawn up another 100 million USD of majority investments in seven projects.
The paper highlighted that after joining the World Trade Organisation early this year, Viet Nam “has taken several steps to open up its economy to overseas capital”. The country has revised several laws relating to real estate such as Decree No. 84 that establishes a framework for relocating residents.
Mr. Hon estimates that yields on offices in Ho Chi Minh City are running at about 15 percent. He dismissed any doubts that land ownership in Vietnam could prove uncertain given the country's political history and confirmed, "it's not a real concern, what we have seen so far is that the law has been carried out very consistently".
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