(Construction) – Recently, Vietnam’s real estate has always been an attractive field for foreign investors, after the processing and manufacturing industry while the total registered capital for new grant, adjustment, and capital contribution to buy shares of foreign investors in this field increased by 15,56% compared to the same period in March 2020

As predicted by many experts and a number of financial institutions internationally, the cash flow of FDI into Vietnam, the next time will be greater by foreign enterprises trust in Vietnam, the successful control of the pandemic is a great advantage for the country’s competitive advantage, besides, with major trade agreements signed, Vietnam can fully completely compete with other countries in the region in attracting FDI.

Statistics on foreign investment capital in the first quarter of 2021 show that the total registered capital for new grants, adjustment, and contribution of capital to buy shares of foreign investors in the real estate sector increased higher than the same period in 2020 by 15.56%. In addition, the total registered capital accumulated in the real estate sector in the first quarter of 2021 was USD 0.6 billion, up 56% over the same period (March 2020 was USD 0.264 billion).

Explaining the reason why FDI inflows into the real estate sector have increased so sharply, economists said that Vietnam has political stability, economic growth, Vietnam is also a country that has been very active in improving the investment environment. In addition, the transition between the 2014 Investment Law and the 2020 Investment Law has had a positive effect on the situation of granting and adjusting foreign investment projects in Vietnam.

Moreover, in recent years, there have been many foreign business delegations looking for opportunities to shift investment from China to Vietnam, the partners are mainly from Japan, Korea, China, Hong Kong and Singapore. This shows that real estate has always been and will be an attractive field for foreign investors.

Along with a new range of international manufacturing units, giving investors the right to choose the right tenants, thereby selecting multinational companies in high-value-added industries. Segment of industrial real estate are growing strongly with the increase of FDI to 10-time in the last decade. Good land supply are creating conditions for the upcoming production projects with the increasing forms of rental and many other solutions.

Besides, credit  real estate continues to increase. The Credit Department of Economic Sectors – The State Bank of Vietnam said that the credit growth rate of the first quarter of 2021 is higher than the growth rate of 1.3% of the same period last year and with this increase, the credit debt economy has reached over VND 9.46 trillion.

Real estate credit is VND 1,835,504 billion, up 2.13% compared to the end of 2020 (real estate business increased by 2.82%). Real estate credit in recent years has increased, but the growth rate has slowed down (in 2019 increased by nearly 30%; in 2020 increased by over 11%; the first quarter of 2021 increased by about 3%).

It can be seen that real estate credit is still under strict control and the reason the real estate market has increased in recent times not only stems from credit but also comes from the phenomenon of financial resources instead of moving into production and business due to the Covid-19 epidemic, causing a series of production and business establishments to turn to real estate as well as the interest rate of savings last time decreased sharply, causing idle cash flow to move into real estate investment channels.

Not to mention that in the first 3 months of 2021, the real estate corporate bond market also increased sharply in both issuance value and interest rate.

Vietnam Bond Association said that, in March, enterprises had a total of 19 bond issuances with a total value of VND 8,035 billion. In which, the real estate enterprises continue to lead in terms of issued value with VND 5,460 billion, equivalent to 68%.

Some real estate companies mobilize bonds with great value such as Nhat Quang Property Development  (VND 2,150 billion), Smart Dragon Investment Corporation (VND 1,900 billion)… Previously, in early January 2021, many large real estate enterprises also participated in raising capital from the bond market.

Typically Vingroup announces the offering of nearly 70 million bonds to finance the operation of subsidiaries. Each bond has a par value of VND 100,000 with a term of 36 months, totaling nearly VND 7,000 billion.

From the end of 2020 up to now, real estate corporate bonds tend to last longer, with an average of about 3.8 years, 01 years longer than in 2019; The average bond yield has also increased by nearly 210 basis points, to the range of 9.7 – 11% per year.

Specifically, in the recent bond issuance, Sunshine Group raised capital at an interest rate of 11% / year, Novaland with an interest rate of 10.5%/ year, or especially as Phat Dat used to issue bonds with an interest rate of 14% / year …

According to experts, the increased issuance of bonds by real estate enterprises with high-interest rates shows the long-term capital needs of the enterprise, as well as the effects of the industry’s prospects and the impact of the epidemic factor on the longer-term structure of bond traders in the real estate industry.

Source: baoxaydung.com.vn