CBRE: Infrastructure should be one step ahead for property sector

Cao Ban

HCMC – Experts of CB Richard Ellis Vietnam (CBRE Vietnam) told a recent conference that zoning plans for infrastructure development should be drawn up before the implementation of real estate projects.

The conference on Asia-Pacific’s property market: opportunities and prospects for the Vietnamese market was held by CBRE Vietnam over the weekend.

Duong Thuy Dung, director of research and consulting at CBRE Vietnam, said master zoning plans for infrastructure development in a province or city are an important basis for businesses to carry out realty projects.

For instance, a master zoning plan must clarify construction and population density to help enterprises know which area will have a large number of office and commercial buildings, and infrastructure must be developed first.

“Infrastructure must be developed before property projects are executed. Demand for homes has surged but State governance in the housing market remains weak in Vietnam. A number of apartment buildings are under construction in districts 7 and Nha Be despite underdeveloped infrastructure in certain areas there,” Dung said.

She said there should be rules to force investors, developers and homebuyers to follow master zoning plans.

Henry Chin, head of research at CBRE Asia-Pacific, told the conference that Vietnam’s property market needs transparent information and legal system. Foreigners planning to invest in Vietnam must come to the country to get information, but in many cases such information may be inaccurate. Meanwhile, they can get adequate information about other markets such as Singapore on the Internet.

He said Vietnam’s office-for-lease market would hold strong potential in the coming time. Rents are high now due to limited supply and high tenancy. In 2016, the respective vacancy rates for Grade A and Grade B office space were 4% and 2.8% in HCMC.

CBRE forecast the vacancy rate would remain at the current level when the market absorbs new supply of Grade A and Grade B office space in 2017-2020. The occupancy rate will stand at an average of 86% of total new supply in one year.

Given robust growth of startups, demand for co-working and serviced offices will edge up.