Along with industrial real estate, housing and office rental are also considered to have many prospects after TPP was approved by 12 countries.

illustration from the Internet

Market research and consulting firm CBRE has just published a report assessing the impact of the Trans-Pacific Partnership (TPP) Agreement on the Vietnamese real estate market.

According to this consulting unit, after the countries reach the final agreement of the agreement, the sectors that Vietnam will benefit the most are garments, seafood and agriculture.

Industrial land, warehouses and factories

Regarding real estate, CBRE believes that the impact of TPP on the local real estate market is not as large as the above industries, but the demand of real estate-related industries such as industrial parks, warehouses, and logistics may increase to a certain extent.

This is a result of attracting more foreign direct investment. Demand for offices and housing is also expected to increase to meet the rental and accommodation requirements of foreign companies and foreigners.

CBRE believes that, regardless of the long-term impacts of the TPP, real estate industry stakeholders still have a very positive attitude towards this agreement.

Specifically, for industrial land and warehouses, the TPP will promote investment in Vietnam, especially from major importers of Vietnamese products such as the US and Japan. Currently, US investment in Vietnam is still modest compared to South Korea and Japan.

US companies will increase their manufacturing operations in Vietnam and re-import Vietnamese products thanks to the country’s tariff exemptions on key products such as garments. US companies are likely to target industrial land in Vietnam’s southern provinces, where some existing textile factories are located.

Similarly, manufacturers from other countries will certainly consider moving from non-TPP countries such as China, Thailand, Cambodia, Indonesia, India to Vietnam to enjoy extremely low tariffs.

This will increase demand for industrial land, warehouses and factories, not necessarily from countries in the TPP agreement but also from countries and territories not in the agreement such as China, Hong Kong and Taiwan, which have always wanted to get ahead of the agreement.

In this context, industrial park investors and construction companies will be the biggest beneficiaries when a large number of textile and seafood companies relocate to Vietnam.

For the logistics-infrastructure industry, increased trade will lead to increased demand for logistics services. There will be greater demand for infrastructure, including roads, railways, seaports and airports to facilitate the logistics industry.

Office and housing

In particular, the office and housing sectors will also benefit as increased foreign investment and the need for foreign companies to establish in Vietnam will increase the demand for international standard office space.

CBRE recommends that, due to the current limited supply of high-quality offices in Hanoi and Ho Chi Minh City, future office investors may need to reconsider their development plans to accelerate the office development process.

The expected growth of foreign companies coming to Vietnam means that demand for serviced apartments, rental apartments and even apartments for sale will increase.

Along with that, the Government's permission for foreigners to buy houses in Vietnam from July 1, 2015 will open up opportunities for many foreign customers to own an apartment in Vietnam instead of renting, especially when the selling price of houses in Vietnam is significantly lower than the price of houses in neighboring countries.

Regarding land prices, CBRE said that it may be too early to conclude on the possibility of land price increases, but the increasing demand for industrial land and the limited supply of standard land are two factors that will cause land prices to change, especially in areas most sought after by garment manufacturers such as Binh Duong, Dong Nai and Long An.

"The great thing about the TPP is that it will boost Vietnam's reputation. There will be a greater demand for industrial park development, commercial and residential projects, as well as infrastructure across the country to build better roads, ports, and connectivity services. There will be a lot of activity for real estate developers in all market segments, and they need to prepare their workforce, technology transfer, training, productivity, and compliance to take advantage of these golden opportunities," CBRE's report concluded.

According to VN Economy