Japanese Hinokiya and Vietnamese TWG are moving ahead with a plan to set up a joint venture to develop real estate projects in Vietnam after signing a cooperation agreement on June 22.

According to TWG’s CEO Le Cao Minh, the first project to be co-developed will be a Japanese style housing project in HCMC, covering an area of 9.7 hectares.

In mid-May, BW Industrial, a joint venture between Warburg Pincus and Becamex IDC, presented before the public. With initial capital of $200 million, of which 70 percent is from the foreign partner, BW Industrial plans to provide modern storehouses, ready-made workshops, and industrial properties.

Warburg Pincus’ CEO Charles R. Kaye said many foreign investors are coming to Vietnam because of high growth rate. He believes that industrial real estate and logistics markets will have a big impact on economic growth, noting that there are now many foreign investors relocating their factories to Vietnam.

According to the Foreign Investment Agency (FIA), FDI into the real estate sector is increasing steadily with $5.5 billion worth of capital registered in the first six months of the year, which accounted for 27.25 percent of total registered FDI capital.

The committed investment capital is higher than the $3.05 billion in 2017, which accounted for 8.5 percent of total FDI capital of the year.

Meanwhile, investors are targeting many different market segments, including housing development, industrial production, retail premises, offices and tourism real estate.

FIA noted that many large-scale projects have been registered recently. In late March, Amata Vietnam received a license to develop an industrial city in Quang Ninh covering an area of 714 hectares.

Most recently, South Korean investors got a license to build the Lotte Mall Hanoi project, a complex of shopping mall, hotel, office building and condotels, capitalized at $600 million.

However, the project is small compared with the Smart City project in the communes of Hai Boi and Vinh Ngoc of Dong Anh district in Hanoi. The mammoth project has investment capital of $4.138 billion, registered by a Japanese corporation.

Meanwhile, the M&A market has become very busy. Nomura Real Estate has acquired 24 percent of ownership in Sunwah Tower, an A-class office building with usable area of 20,800 square meters in the central business district 1 in HCMC.

After taking over a 0.9 hectare project in Tay Ho district in Hanoi, CapitaLand will expand its investment portfolio with 12 projects to develop residential quarters, one integrated complex, and 21 serviced house blocks in six cities of Vietnam.