• All trends point to property: Vietnam has one of the youngest
demographics in Asia, with 70% of its population less than 35
years of age. Together with increasing incomes and rapid
urbanization, the appetite for residential space of the emerging
middle class is growing quickly. The influx of foreign investment
and high and stable GDP growth that averaged 7.1% CAGR last
decade are spurring demand for commercial and industrial real
estate. We believe that as the economy begins to pick up, the first
wave of growth will be largely focused on the natural need for
infrastructure and property development.
• Rising across the board: Real estate in Vietnam is experiencing
significant appreciations in capital values and rents throughout its
spectrum, from residential to commercial space. We expect this
trend to carry on as regulations overseeing the market continue to
develop and as MNCs enter the country as a result of the WTO
accession and China Plus One policy. In the short to medium
term, we expect demand to continue overwhelming supply.
• Investment opportunities: We discuss key stocks that give
investors an exposure to Vietnam’s property market. As more and
more firms have begun to invest in the country, several investment
plays, not limited to Vietnamese stocks, have risen. Our
compilation includes companies listed in Vietnam, Singapore,
Hong Kong, Korea, Malaysia and Thailand.
• Key risks: Overcrowding and quality control are ongoing issues in
Vietnam’s property market. Other risk factors include the lack of
transparency and stagnation in real estate regulatory reform.
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