Jones Lang LaSalle opens its 1st Vietnam office in Ho Chi Minh City

Jones Lang LaSalle opens its 1st Vietnam office in Ho Chi Minh City
Ho Chi Minh City, March 13, 2007 – Vietnam’s consistent high economic growth and political stability in the last ten years offer unlimited opportunities to foreign investors despite the challenges that the market presents. With the increase in foreign investment in the country and the improvement of the legal system, it is forecasted that the real estate sector will progress from a state of immaturity to one of sustainable growth and development in the near future. This is according to a report titled “Destination Vietnam - The Final Frontier?”, released by Jones Lang LaSalle, one of the world’s leading real estate services firm, which officially opened its first Vietnam office in Ho Chi Minh City today.

“The influx of foreign investment into Vietnam and the improvement in the country’s legislative system make it a viable destination for both corporates and developers,” says Mr Andrew Brown, Managing Director, Jones Lang LaSalle Vietnam. “We at Jones Lang LaSalle are excited to be a part of Vietnam’s growth and our business in Vietnam is gaining strong momentum. We offer a full range of services including capital markets, transaction management services, tenant representation, leasing, consultancy, research, valuations, property management and integrated facility management services. Since we began operations in Vietnam, we have been providing real estate advice and services to a growing list of multinational companies in the property, technology, consumer products and financial services industries including investment funds, Microsoft, Procter & Gamble and IBM,” Mr Brown adds.

Jones Lang LaSalle’s report on Vietnam also highlighted that despite the current optimism, there are notable constraints and obstacles on moving forward. These relate to what the government needs to address as well as what domestic and foreign investors and occupiers are required to accept as part of the fabric of operating and doing business in Vietnam.

Mr Buu Le, Senior Manager, Consultancy and Research states, “Vietnam’s economic growth, increased living standards, emerging consumer trends, rapid urbanisation, emerging tourism industry and growing foreign investment offer attractive opportunities for foreign and domestic property investors alike. Ho Chi Minh City and Hanoi are Vietnam’s two main metropolitan centres for investments given their attractive population profile and strategic location.”

“Vietnam’s real estate market is viewed as promising and opportunistic. Despite this optimism, market challenges exist such as the country’s low administrative efficiency, low transparency, an underdeveloped legal system and its requirements for significant infrastructural improvements. However, Vietnam’s attractiveness to foreign investors remains but they require long-term commitment, deep pockets, flexibility, patience and persistence,” adds Mr Le.

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Positive Outlook for Vietnam’s Real Estate Sector as Foreign Investments Grow – Add One


Other key highlights of the report include:

1. Over the past five years, Vietnam’s GDP growth rate averaged 7.4% per annum, second only to China. The country’s population profile is positive with 70% under the age of 30. Currently, the manufacturing sector is growing at a rate close to 17% per annum and the services sector is moving up strongly, driven by retail and tourism industries growth.

2. The international ratings agency, Standard & Poor’s has upgraded Vietnam’s financial strength rating. This has contributed to Vietnam’s placing on the radar screen of many international real estate market players. Foreign investment into Vietnam reached USD 10.2 billion in 2006 (a record high) and is expected to reach USD 10-12 billion in 2007.

3. The overall real estate market has a positive and prospective outlook, driven by high economic growth, rising foreign investment and deregulation. Annual overseas remittances, which have been continuously increasing reached USD 4 billion in 2005 and USD 4.5 billion in 2006, have driven demand for better-quality housing. With the foreign investment inflows and tourism rising in anticipation of Vietnam’s accession as the 150th member of the WTO, the demand for offices, shopping centres, hotels and warehouses is growing accordingly. Furthermore, the ratified Real Estate Trading Law which came into effect on 1 January 2007 will free up opportunity to non-resident Vietnamese and foreign property investors.

The above opportunities and the forecast that Vietnam’s real estate sector will move in the direction of sustainable growth and development bode well for the country.

Mr Brown concludes, “We are optimistic about Vietnam’s future and confident that given our strong global and regional network as well as the growing number of our clients looking to make their foray into or expand in Vietnam, Jones Lang LaSalle will be able to capitalize on the opportunities in this emerging market.”