UKVFTA brings more investment to the Việt Nam real estate market

VIETNAM, September 23 –

Hoang Ha

HÀ NỘI — Việt Nam’s property market is seeing more investment from the UK thanks to the UK-Việt Nam Free Trade Agreement (UKVFTA).

The UK is known for consultancy, especially in the real estate industry. Real estate is not only the choice of many investors but also a safe and highly effective investment channel, according to Savills Việt Nam, a UK-based real estate consultancy provider in Việt Nam.

“This deal is likely to drive UK business expansion into Việt Nam and we expect interest from companies in data centres, high-tech manufacturing, financial services, high-tech services and potentially pharmaceuticals,” said Matthew Powell, director of Savills. Hanoi, he said Vietnam news.

“These businesses will require real estate across the country, which could range from manufacturing plants or office space. There has been increased interest and demand from UK companies. Việt Nam was very much on the agenda and the two countries continue to have conference investments’.

“We could see institutional investors in the commercial market with interesting Grade A office properties such as Techcombank Tower 6 Quang Trung.”

With a dynamic industrial scene, Việt Nam may also see players in industrial data centers or logistics. However, we expect the focus to be largely on services and financial services, he said.

In addition, “we expect investment from the UK to be related to services, pharmaceuticals, specialist engineering, high-tech manufacturing, aviation, financial services and other export industries from the UK.”

Although Asian countries such as Singapore and South Korea lead the way in investment, there are several active multinationals from the UK in Việt Nam, especially in the financial services sector. For example, Standard Chartered opened its new headquarters in Hà Nội at Capital Place in June.

“For now, the interest is very much based in Asia, but we could see an increase in UK curiosity,” Powell said.

On 29 December 2020, the United Kingdom and Việt Nam signed the Free Trade Agreement (UKVFTA) with the aim of paving the way for continued and growing trade between the two countries. The agreement entered into force on May 1, 2021.

As shown by agreements signed in the past, participation in trade agreements can bring great benefits to the investment market in Việt Nam, according to Cushman & Wakefield Vietnam. A good example is the US$1 billion capital flow from Denmark for the Lego factory in Việt Nam, following the entry into force of the EU-Việt Nam Free Trade Agreement (EVFTA).

“Thus, we are very confident that the UKVFTA will also help attract more UK investors to Việt Nam,” said Trang Bùi, head of Cushman & Wakefield Vietnam. Vietnam news.

“The UK property market is mature and established, their investors are therefore more willing to deploy capital in assets that are already in operation and have made a profit, with high stability and low risks,” Trang said.

“This strategy may seem different to investors from other parts of the world. In general, cross-border investors always need some time to adjust capital flows and look for suitable opportunities in developing countries like Việt Nam.”

“To maximize the potential benefits of the UKVFTA, Việt Nam needs to continuously change and improve its policies and business environment in line with stringent requirements set by foreign investors. Through this process of continuous improvement and adaptation, the country’s competitiveness will rise to new heights. global investment map,” he said.

As of May 2022, the UK has a total of 462 investment projects in Việt Nam, with a total registered investment capital of $4.15 billion.

UK investors invested the most in Việt Nam’s manufacturing and processing industry with 120 projects registering investment capital of nearly $1.6 billion, accounting for nearly 40 percent of total investment capital.

Second was the real estate industry with 23 projects with investment capital of $1.04 billion, accounting for 26 percent of total investment capital. — VNS

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