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News Release

Vietnam

JLL Market Watch W47 2016






















 
                                  
                        
Ho Chi Minh City designs USD250mn metro route leading to major airport

A project is under construction a multimillion-dollar metro route leading to Tan Son Nhat International Airport in Ho Chi Minh City is expected to be submitted to the prime minister for approval in two years. According to the city’s Management Authority for Urban Railways, this route will be 2km long with 2 underground stops being placed at the park and at the international terminal of the airdrome. A detailed plan will be submitted in 2018 to seek approval for the project, whose total investment is estimated at USD250 million and is anticipated to begin in the first quarter of 2019 and be completed in 2024.
  
      
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VN needs double-track railway for further development

Major problems of Vietnam’s railway sector will be resolved if a double-track railway is developed on the route from the North to the South of the country. According to Mr. Nguyen Ngoc Dong, Deputy Minister of Transport said the ministry will submit to the government a proposal on high-speed North-South Railway with a speed of 160-200km per hour that will be upgraded to better serve passengers. Moreover, the ministry’s Planning and Investment Department cited reports by the Vietnam-Japan Consulting Joint Venture saying that until 2030, the North-South transport corridor will see the demand of 534,000 passengers per day or 195 million passengers per year, 4.5-5.5 times higher than that of 2010.

     
    
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Property rakes in second-highest FDI

The property sector has been the second-highest attracter of FDI in the first ten months of 2016, with 46 projects at an aggregate USD982.59 million. According to recent statistics published by the Ministry of Planning and Investment, the property sector was behind the manufacturing and processing sector, which has so far accrued a total of USD12.84 billion in 842 newly-registered and 691 capital-added projects, equaling 72.9 percent of the total FDI inflow to Vietnam. In addition to the usual South Korean and Singaporean investors, the Japanese are emerging with a range of projects as well.
  
      
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Phu Quoc International Airport to increase capacity

In the first nine months of 2016, Phu Quoc International Airport served 1.6 million visitors to Phu Quoc, an increase of 47.18 percent compared to the same period last year. According to Mr. Huynh Quang Hung, Vice chairman of the People’s Committee of Phu Quoc District, the total land area provided to the airport in use since 2002 was 905 ha, however, the implementation has finished around 35 percent of total construction. It is expected to become operational in end-2017 that will stimulate the airport to increase the annual number of travelers to the island could be nearly 2.5-3 million in 2020.

     
    
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Vietnam's FDI perspective strong after US elections?

About what impact the Trump presidency may have on future investment in Vietnam, according to Mr. Greg Ohan - Business development director of JLL, positive bilateral trade and increased investment interest in Vietnam particularly from sectors to continue. While many observers are concerned regarding the impact this may have on US globalisation policies and trade agreements such as the TPP, the underlying sound factors driving investment into Vietnam will fundamentally remain and continue to attract both local and foreign multinational companies.
  
      
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Second home tax would hit property market

According to Mr. Stephen Wyatt, General Director of JLL Vietnam, the idea of taxing second home purchases has been a fairly common process around the world, contributing to revenue for the government but also affects the number of transactions in the real estate market. In terms of bringing it to Vietnam, it is very difficult to trace who owns a property without a computerized land registry system that needs to be considered going forward. Furthermore, any new tax legislation requires the involvement of relevant authorities and professional property market research companies.

     
    
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Hanoi add 5 trade centers to master plan

Under Decision No. 6239 from the Hanoi People’s Committee, five trade centers will be added to the plan for wholesale and retail networks in Hanoi by 2020 and vision to 2030. The additions are primarily located in suburban districts. Four are listed in Grade 1 and another trade center is Grade 2, bringing to 64 trade centers and 32 shopping malls in the city. By 2020 Vietnam targets having 1,200-1,500 supermarkets, 180 business centers, and 157 shopping centers, with retail revenue totaling USD179 billion.
  
      
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Vietnam seventh in global consumer confidence

According to Nielsen Vietnam, the index of Consumer Confidence Vietnam was ranked seventh worldwide in consumer confidence, with 107 points thanks to economic stability in the country. Job stability was the top life priority for Vietnamese people in the quarter, followed by health and work-life balance. Furthermore, the survey also indicated that Southeast Asia was also the region with the highest saving rate, and Vietnamese people are the most careful spenders in the world, with 78 percent surveyed choosing to save their money.

     
    
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Banks cut back lending for property sector

The interest rates on medium- and long-term loans to the property sector have recently increased by 1-1.5 percentage points. The banks’ move is in response to the State Bank of Vit Nam (SBV)’s warning that they should exercise caution, particularly while lending to the high-end property segment, to head off a possible bubble.
  
      
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H&M Vietnam launching in 2017

H&M (Hennes & Mauritz), the Swedish fast-fashion brand known for offering fashion and quality at the affordable price in a sustainable way, has recently signed for the first store openings in Vietnam next year. The H&M Group has more than 4,200 stores in 64 markets, including franchise markets. It’s debut in Vietnam was probably expected after rival brand Zara launched in HCMC in September this year.

     
    
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