The property market is becoming increasingly attractive to foreign investors, property consultancy Cushman & Wakefield Viet Nam said. — VNS Photo

HCM CITY (Biz Hub) — The property market is becoming increasingly attractive to foreign investors, property consultancy Cushman & Wakefield Viet Nam said.

Speaking at a meeting last week Timothy Horton, the company's general director, said land owners are starting to become more realistic about land prices and the country has seen "a little bit more capital flow into operating assets" like offices and hotels.

Operating assets provide more security in comparison with greenfield projects and people try to minimise risks when they invest in a country, particularly a country that is considered risky, he explained.

In the last three years the market has started to correct, and the Government has adopted fiscal policies that make lending easier for banks, he said.

The decision of foreign and local investors, hence, depends greatly on the feasibility of a project, he said.

"Investors are looking at something that they may be able to provide them cash flow from the first day.

"They are looking at assets to which they can add value, and assets where they feel there may be some depression in the market and maybe some upside."

Jonathan Tizzard, the company's national head of valuation and research, said a good example for the trend is Centre Point which has been sold twice.

"It has not the best location but is a well-designed building, a well-run building.

"The building was sold to international investors."

Horton said investors are currently mostly prudent ones who have been living in Viet Nam or have been looking at the country for 10 -15 years.

"They know the property cycles, they are comfortable with a lot of the locations, they understand the way that particular asset classes work - whether it is from an operating asset and right through the development cycle.

"And they are starting to feel a little bit more comfortable with the country risk."

These investors, instead of coming in and looking for a single asset, are also looking at the group level with some local developers, he said.

If Vietnamese developers and the economy become more transparent, investors would feel a bit more comfortable, he said.

If a larger number of Vietnamese developers focus on corporate governance, this would provide more comfort for prudent investors not only from Asia but also from Europe and the Americas, he added. — VNS