JAPANESE INVESTORS HAVE SWITCHED FROM SETTING UP BUSINESS IN VIETNAM IN MANUFACTURING INTO FINANCIAL INVESTMENT, RETAIL.
In indirect foreign investment in Vietnam, Japan ranks sixth in the list of countries conducting M&A in Vietnam with more focus on small or medium but long-term and potential large area. The field of production only accounts for 10% of the total value.
However, the recent survey has shown there is a new wave of Japanese investment in other sectors such as construction, real estate, transportation or financial investment. The report of The Japan External Trade Organization, or JETRO, a Japanese government-related organization that promotes trade and investment reflects the proportion of new investment projects in the construction, real estate increased from 3% in 2013 to 6% in 2014, while the capital had risen to 13%, compared with 2 % of a year ago.
In real estate sector, Tokyu Corporation has joined invested with Becamex IDC to develop Tokyu Binh Duong Garden City in an area of over 110 hectares with a total investment of about USD 1.2 billion. Daibiru Corporation also acquired the office building Corner Stone in Hanoi with value of the deal at USD 60.1 mil. These are example that Japanese investors recognizing the potential development of Vietnam’s changes in real estate market as the land ownership have been approved and effective from Jul 2015. As reported, M&A deals in real estate in 2014 accounted for 61% of M&A deals.
In financial investment, in 2014, Daiwa PI Partners and Vietnam Opportunity Fund of Vina Capital invested USD 45 million in the International Dairy Joint Stock Company, making foreign ownership increase to 70%.
In retail sector, Vietnam is also considered as an attractive market with growing mid-income consumer group. The largest retailer Aeon Japan after years of market research has poured more than USD 500 million for two commercial centers were opened in Ho Chi Minh City, Binh Duong and a new center in Long Bien (Hanoi). The group also plans to expand through acquiring shares of two local supermarket being Fivimart and Citimart.
It appears that Japan is holding strong among the leading investors in Vietnam, together with Korea and Singapore.
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