Recently, commercial real estate market continues to flourish, opening a new potential investing opportunity, and believed to be a “cash cow” sector, by many specialists. This is medium, long-term investment which has high level of profitability, strong demand and guarantees optimistic performance of commercial property, especially buildings are located at CBD and prime location. Within this segment, despite of requiring an enormous outlay, profit margin is good in return.
Vietnam is becoming a light spot with strong economic development and young population. Annually, thousands of new enterprises are established, previous small businesses continues to develop bigger scale and always demand to expand the office, or plan to move the office to the other place that is closer to the city center, while grade A commercial real estate is not always the option in the hand. For that reason, it will definitely happen the transformation process of increasing products’ value. Investors will take their money to grade B in order to restrict the rent increase and vacancy rate. This is the smart strategy to acquire customers.
Apart from whole office, commercial buildings, the market is witnessing the considerable supply of commercial spaces from retail podium inside the apartment buildings. Commercial shophouses often draw the attention of people stopping by, promise the sale and rental potential. Number of commercial spaces is little than other type of properties within every project. On average, the number of commercial properties only account for 2 – 3% of the total units of the building, up to 5% with the bigger project. This make this type of property become scarce, more liquid and attractive.
More than anything, the investor wants to see the good return on the investment. The capitalization rate of the commercial property is from 8 – 12 percent annually, this is much higher than an apartment for rent or bank savings.
Commercial properties in bustling residential areas, developed transport infrastructure are always the type of property in high demand while the stock in city center is depleting. The enterprises aspire to look for premises to start doing business, when investor want to possess profitable assets.
The prerequisite factors for a fruitful commercial real estate investment include the prime location, convenient proximity, potential appreciation, situation inside the big cities. Although commercial property would be appraised as a cash cow, the investor has to do careful research to decide which to buy. Things to be considered could be when to invest and strategy to distribute and manage the funds.
Hai Phat Global is one of the most prestigious real estate agents in Vietnam. We are connecting with the international realty network from Hong Kong, Thailand, Taiwan, China, Korea … to sell and rent out retail podiums for foreigners. We provide comprehensive services on all aspects of acquisition, brokerage, leasing appraisal and legal consultancy.
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Hai Phat Global
Address: 2nd floor, CT2 Tower, The Pride, To Huu Road, Ha Dong District, Hanoi
Hotline: (+84)931 130 668