Updated: Jul 25, 2020
Mr. Kenneth (Ken) Atkinson - Founder of Grant Thornton Vietnam and British Business Group Vietnam, on an exclusive interview with VinaForum & VnInvestors.com
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?
The full impact of the pandemic will be damaging to all economies but it is too early to determine the real extent. Vietnam will fare better than most because of the success of the Government in very quickly containing the community spread, implementing quarantine and the early closure of the our international borders. This in itself will help make Vietnam attractive to foreign investors especially those who have been considering relocating from China. Vietnam is expected to maintain one of the world’s highest GDP growth rates in spite of the fact that it likely to be almost 50% of last years. Some sectors will prove resilient but hotels and resorts will be badly impacted this year and this is expected to continue into 2021.
However, the Vietnamese have faced many challenges, which they have always managed to overcome with pride and I do not expect overcoming the pandemic will be any different.
4/ Do you have any advice to local developers / project owners / govt. on how to get more investments from overseas investors?
The biggest impediment that most foreign investors refer to is the lack of transparency and long complicated process of land acquisition and compensation as well the continued need being addressed by the Government for removing some of the many business conditions and sub –licenses. There are also still many contradictions or lack of clarity between many pieces of legislation that needs resolving and we understand the Government is working on this.
For local developers many overseas investors will only now invest in projects that are licensed and have been issued with land use rights and construction permits so there are I believe opportunities for developers and owners with well structured and planned projects that have used good local and international consultants.
5/ Some Vietnamese people want to take this opportunity to invest or to buy cheap assets, however they are afraid when is the right time and what price is acceptable. Do you have any advice for them?
My experience over 50 years of business is that you should never wait for the top or bottom of any cycle and the challenge is also to determine when assets are cheap. The key is to do proper diligence and determine the likely future value of the assets you are buying and the likely return on investment, this will help determine whether the asset is an opportune purchase. If both parties feel on conclusion of a transaction that they could have done better then it is probably a good deal.
How you can get yourselves to be seen and to be connected by Vietnamese Investors on VnInvestors.com?
6/ Would you please introduce yourself?
I am the founder of Grant Thornton Vietnam and now serve as senior board adviser. I also hold other outside positions including Vice Chairman of the Tourism Advisory Board and the British Business group Vietnam,. I am British but also hold dual nationality with Vietnamese Citizenship. I have a Vietnamese wife and son.
I have worked and lived in Vietnam since 1989 and have lived here permanently since 1993.
I have lived in Hong Kong and also UK my home country before I adopted Vietnam as my home.
I have always found Vietnam to be a very friendly country to live in and it has always had a vibrancy, which I always felt comparable to Hong Kong and New York, especially Ho Chi Minh City.
Vietnam has a lot more culture than other countries I have lived and of course a fantastic tourism offering by way of beaches, national parks and heritage sites.
7/ You said that you have been here for around 30 years. Have you experienced any challenges in your living and doing business here?
Wow I think I could possibly write a book about the challenges and experiences I have had in my 30 years here. It was made easier by the fact that I lived in Hong Kong and spent a lot of time in mainland China for 10 years before coming to Vietnam. Of course especially in the early days there are always challenges as you adapt to life in a new environment, and one where the language is particularly hard for foreigners to learn. Early on there were challenges in getting the basic commodities we were used to and finding reasonable accommodation in Hanoi where I spent my first 3 years (1990 -1992). Lack of developed infrastructure and a lack of laws and regulations surrounding business and there was no book to follow but rather we were all writing the book as we went.
In spite of the challenges I have always enjoyed my time in Vietnam and have never considered leaving, even when I was diagnosed with cancer in 1996. I intend to spend the rest of my life in Vietnam and enjoy the success of Vietnam’s economic development. I am waiting to be able to take my first metro ride in HCMC!
Thank you very much for your sharing, Ken! We hope that you can soon enjoy your 1st metro ride in HCMC.
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