February 11, 2022

Foreign Enterprises Invest In Offices In Ho Chi Minh City


FDI inflows into Vietnam are increasing. Vietnam's real estate market is likely to receive a large source of FDI when the giants intend to move their production factories and offices out of China.

1. Vietnam real estate is still attractive to foreign investors

With a total registered capital of nearly 1.6 billion USD in the period from January to August, real estate continued to rank third in 18 fields attracting foreign investment (FDI). Although this figure is much lower than the figure of 2.87 billion USD in the same period last year, experts say this is reasonable because the impact of the COVID-19 pandemic has made it difficult for investors to fact-finding and investment decisions.

In the context of complicated developments of the pandemic, Vietnam is the only country in the world that has been upgraded to positive ratings by all three international credit rating agencies, Moody's, S&P and Fitch. Foreign investors such as Japan, Korea, and Singapore, who have a strategy of expanding and diversifying investment channels, also look to emerging markets or frontier markets like Vietnam to seek profits.

In addition, Vietnam has continuously been ranked higher in the past 2 years on the Global Real Estate Transparency Index Ranking thanks to the development of two large urban areas, Hanoi and Ho Chi Minh City. This is also a factor that is of particular interest to global investors.

Real estate in HCMC

See more: Why foreigners invest in Vietnam real estate and you should too?

2. Investment trend of office ownership of foreign enterprises in Vietnam

According to Article 14.2 of the Law on Real Estate Business, foreign enterprises are allowed to buy and own offices in Vietnam. This law has made the trend of foreign enterprises investing in office ownership in Vietnam increase sharply.

Talking to customers who successfully transacted office projects with Modoho about the reasons for buying and owning this type of real estate, they said the advantages of owning an office. Firstly, the enterprise has a stable headquarters and representative office, without having to move or change its address. Secondly, there is no annual price increase or the worry of the landlord ending the lease. Thirdly, most properties sold to guests have SPA as a sublease able property. If used after a period of time, deducting costs, not using anymore can exploit and lease again is also an investment channel.

The Crest Office

Mr. Phan The Truong, CEO of Modoho said: “Commercial offices are the property of business. Accordingly, this office can be included in the investment portfolio or converted into a capital flow to help the business increase its position and reputation before its partners. If it is a listed company, this is a dual investment rate, both meeting the needs of office rental and being able to do business and take advantage of this space.”

The trend of buying new offices has appeared in Ho Chi Minh City recently, so the demand for offices is forecasted to continue to increase while the supply is not enough. This is an advantage for investors when entering the office market at this time.

Moreover, Mr. Phan The Truong commented on the future trend of office investment in Vietnam: “The commercial office market in the next few years will have great leaps when foreign investors are pouring large capital to invest in office space. capitalize on the market rally.”

Foreign Enterprises Invest In Offices In Ho Chi Minh City

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