Ken Atkinson: the stronger segments are likely to be residential apartments

Updated: Jul 25, 2020

Mr. Kenneth (Ken) Atkinson - Founder of Grant Thornton Vietnam and British Business Group Vietnam, on an exclusive interview with VinaForum &

1/ How do you see the potentials of the Vietnam Real Estate Market before the pandemic, now and the future

Before the pandemic struck I would say the real estate market was firing on all cylinders, driven by the growing Vietnamese middle class, foreign direct investment and a booming tourism sector. Of course the market looks very different now particularly the hotel and resort sector, and the retail sector. Whilst recent launches of new residential apartments seems to have bounced back there is a question in my mind about the sustainability because we do not know the proper impact of unemployment yet, but I believe the probability is any slow down is likely to be short lived. I would  expect that retail will take longer to recover because of the fact that many consumers got more used to e commerce during the time of social distancing. However there will be more focus in malls towards F&B and entertainment to compensate for this.  Industrial will continue to be strong because of the continued inflow of foreign investment, which will likely accelerate due to the ratification of the EU Vietnam Free trade Agreement and relocation of factories from China to Vietnam.

2/ How do foreign companies / investors view the Vietnam market?

I think foreign investors still have a keen interest in the Vietnam market because of the market dynamics and in particular the key statistics of population size (96 million) and the relatively low urbanization rate of 34% plus the growing middle class and the reduction of average household size as younger generation move into their own accommodation as opposed to living with parents.

The stronger segments are likely to be residential apartments and affordable housing (more so in HCMC than Hanoi because of supply), industrial and office should remain relatively resilient. Investors will be looking for distressed assets in the hotel and resort sector but as we have learnt from past external shocks they rarely appear.

The main interest is likely to focus on HCMC and Hanoi and surrounding provinces and maybe some second tier cities like Danang, Can Tho and Nha Trang.

3/ What do you think about the impacts of Coronavirus Pandemic?