Mekong Memo Vietnam Weekly, October 19, 2023: Business, politics, finance, trade & legal news.
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With that said, here is your Mekong Memo Vietnam for the week of October 19, 2023:
Diverse Trends Shape Real Estate Market
Vietnam's real estate market is experiencing contrasting trends. Suburban land prices in Ho Chi Minh City have seen significant drops, with districts like Binh Chanh and Nha Be witnessing declines of 20-30% in the first nine months. However, there's a silver lining as realty demand strengthens amid economic recovery, with a surge in demand for apartments, townhouses, and villas. Major real estate players are gearing up for 2024, with new product sales on the horizon. Despite the challenges, foreign investors are showing increased interest in Vietnamese property projects, signaling confidence in the market's potential.
Global Investors Flock to FDI
Vietnam has emerged as a significant magnet for foreign direct investment (FDI), amassing over 20 billion USD in registered capital in just nine months. Key global players, including the US's Amkor Technology and Cargill, have inaugurated major facilities, underscoring their commitment to the Vietnamese market. The European Chamber of Commerce Vietnam's recent survey revealed that 63% of businesses ranked Vietnam within their top 10 FDI destinations. However, experts emphasize the need for streamlined administrative procedures and infrastructure development to further boost Vietnam's investment allure.
Charting the VN Investment Landscape
Vietnam has reiterated its dedication to protecting the rights and interests of foreign investors in all situations. Despite this commitment, foreign firms continue to express concerns over the country's prolonged approval processes and administrative challenges. These firms are keen on reducing the bureaucratic red tape to streamline business operations. Emphasizing the significance of a stable business environment, experts also highlight the need for clear administrative procedures and collaboration between domestic and foreign entities to drive innovation and skill development. Deputy Minister of Natural Resources and Environment Le Minh Ngan stated that the government is actively drafting regulations to enhance land access for foreign investors, emphasizing green growth and the circular economy. The proposed amendments to the Land Law 2013 may allow extensions of land use rights for foreign businesses, facilitating long-term operations in the country.
Middle-Class Drives Retail Rental Boom
The burgeoning middle-class in Ho Chi Minh City is supporting the retail rental market, even amidst broader real estate challenges. Savills Vietnam's Q3 report underscores a surge in new leases within the food, beverage, fashion, health, beauty, and entertainment sectors. With HCMC home to nearly 10 million people, there's vast untapped potential for further market expansion. The city's retail property landscape remained notably stable in the first nine months of 2023, with central areas witnessing high rental rates due to limited stock and soaring demand.
Read more: The Investor
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