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Vietnam set to thrive on China’s misery again as US, Japan goad companies to relocate manufacturing bases
- Foreign direct investment rose for seventh straight year as suppliers to Apple, Nintendo, Samsung build new bases
- Vietnam remains a priority for private equity fund EXS Capital, which has invested in an upmarket residential developer
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Vietnam’s property market is likely to get a second round of tonic from global companies diversifying their production bases in the region as the coronavirus outbreak exposes the concentration risk in China.
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The Southeast Asian nation stands to benefit as the exodus from “the world’s factory” accelerates, burnishing its appeal as an alternative to China since the likes of Apple, Samsung and their suppliers switched out to limit the damage caused by higher tariffs in the US-China trade war.
Analysts say industrial and residential property in the capital Hanoi and Ho Chi Minh City (HCMC) are likely to get another tailwind after the pandemic lockdown disrupted supply chains and escalated trade and political tension between China and other economic powerhouses.
“This Covid-19 outbreak is forcing many companies to re-evaluate their supply chain strategy,” said Sunny Hoang Ha, sales director at SPG Land Viet Nam, part of a group that controls Greenland Hong Kong Holdings. “Vietnam is primed to benefit.”
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Occupancy rate in the industrial district in Vietnam’s northern region, which includes Hanoi and Haiphong, rose 200 basis points to 72 per cent on average in the first quarter from end-2019, according to consultancy JLL. The increase was supported by fundamental demand, before tapering from February amid the pandemic, it added.
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