Last year was another record year for industrial and logistics real estate in Vietnam when foreign direct investment (FDI) into manufacturing remained positive.

The year 2020 is expected to bring about both opportunities and challenges for Vietnam to soar higher. 

Local property experts have forecast that the domestic real estate market will recover this year.

Private sector development and the expected stock market upgrading will help Vietnam attract foreign capital even if the conditions are not that favorable, according to SSI Research.

In 2019, foreign direct investment attraction was a bright spot of Vietnam’s economic picture. It is expected to continue being one of the vital drivers of the country’s growth this year and beyond.

With Circular 22, which took effect on January 1, the State Bank of Vietnam (SBV) has laid a new block to restrict capital flow to the property sector.

Experts have warned of the attempt by many foreign invested enterprises (FIEs) to dodge the laws to enjoy preferences and make local authorities ‘lose lock, stock and barrel’.

Vietnam has reaped impressive economic successes in 2019 and is expecting a bumper crop this year.

The Bac Lieu LNG-to-power project marks the first billion-dollar foreign direct investment project in 2020 after a year going without projects of this magnitude, effectively tripling the first-month foreign investment inflows against last year.

There were 5,720 cases of foreign investors contributing capital or buying into Vietnamese enterprises in HCM City in 2019, which was 4.3 times higher than the number of FDI projects, according to the HCM City Planning and Investment Department.

After being relatively stable last year, the foreign exchange rate of the Vietnamese dong against the US dollar is forecast to be under greater pressure in 2020 due to both internal and external headwinds.

In December 2019 alone, $7.1 billion worth of foreign capital was disbursed.

According to Fitch Solutions, its 2020 real GDP growth forecast for Vietnam is maintained at 6.8%.

Foreign investors, especially those from the EU would find it more appealing to land investment in Vietnam when the EVFTA takes effect, according to German broadcaster Deutsche Welle (DW).

More Singaporean investment is expected to flow via mergers and acquisitions (M&A) in the months to come in Vietnam, focusing on finance, property, and fintech.

Nguyen Tran Nam, chair of the Vietnam Real Estate Association, said the real estate market shows an increasingly important role in the national economy. However, the majority of real estate firms still have small scale and heavily rely on bank loans.

Despite the growing interest among international tech firms, overseas investment in Vietnamese high-tech parks in 2019 remained lacklustre, and solutions will need to be found in order to create an upward trend.

Despite the growing interest among international tech firms, overseas investment in Vietnamese high-tech parks in 2019 remained lacklustre, and solutions will need to be found in order to create an upward trend.

The number of properties bought by foreigners in Vietnam remains modest.

Vietnam’s exports still heavily relied on foreign invested enterprises (FIEs), while foreign direct investment (FDI) did not have positive influences to the other economic sectors of the economy.