VIETNAM – 07 September 2017 –
In September 2017, CBRE published a report highlighting various key projects in and between countries and discussing ways in which connecting the region will transform industries and the property landscape. The ASEAN Economic Community has its vision to liberalize its markets and improve mobility of skilled persons between countries. Individually, countries have been building up their own infrastructure prowess.
Being experiencing large-scale urbanisation and positive economic outlook, the demand of infrastructure in Vietnam is intensified. Uurban growth (% of urban population) in Vietnam has increased from 27% in 2005 to 34% in 2015 while the urban growth in Thailand is 50%. Currently, Vietnam is leading the South East Asia in infrastructure spending of 5.7% GDP. However, a challenge to increasing infrastructure in ASEAN has been lack of private participation. As noted by the ADB, more than 90% of Asia’s infrastructure investment is done by the public sector.
The two metrolines in Ho Chi Minh City and Hanoi are the two dominant planned infrastructure projects to foster the development of sattelite economic area. Apart from these, there are other significant on-going projects such as Hanoi-Hai Phong Expressway, Bach Dang Bridge, Van Don International Airport, National Road 4B, etc. and projects in early stage of planning such as Eastern Economic Corridor and the tollway connecting Ho Chi Minh City and Phnom Penh, which should benefit modern industries such as automobile and electronics industry, tourism, agriculture, construction and transportation.
Putting Vietnam in regional context helps to evaluate potential effects of changing the dynamics of the regional economy. Among the real estate sectors, the logistics sector should be the main beneficiary of ASEAN’s high levels of infrastructure investment in the short to mid-term, given increased connectivity within each country and between neighbouring countries. In the longer term, decentralisation within metropolitan areas and sub-national regions will provide plenty of opportunities for developers, owners and occupiers of space.