JLL: Development trends that will shape property market in 2019

JLL: Development trends that will shape property market in 2019
February 18 11:50 2019

According to real estate and investment management services firm Jones Lang Lasalle (JLL), the mid-priced and affordable real estate segments will dominate the market in 2019. In HCM City, the supply of finished apartments in all segments has reached 160,000 units, corresponding to a rate of 17 apartments per 1,000 people (1.7%).

Stephen Wyatt, General Director of JLL Vietnam, said, "If this rate is high, we should invest in high-end apartments, but if this is low, we should focus on the mass housing market; this is the segment with real demand for apartments."

At the same time flexible workspaces are becoming more and more popular around the country, largely due to the limited supply of traditional office space in sought-after locations. Flexible space is often considered the answer to small companies and start-ups’ needs rather than traditional offices because of reduced costs due to sharing space and facilities.

The market for flexible workspaces is still in its infancy though the first serviced office, Regus, has been operating in Vietnam since 1999. During the last five years, more than 50 spaces have opened up across the country. Flexible spaces are owned and operated by both local companies and international chains.

JLL predicts that with the strong growth in e-commerce, technology companies would continue to hunt for their ideal office building and will quickly become the main tenant category, providing an opportunity for investors who can build offices at a ratio that keeps up with demand.

For technology companies, their office location must be able to attract talent and have convenient transportation with live-work-play facilities integrated into the surrounding environment.

In Vietnam, online shopping activities are increasing in step with the rapid growth of smartphones and 4G networks. Because of this, there is increasing pressure on logistics systems, supply chains, distribution and retail channels, and factories and warehouses.

According to JLL’s Wyatt, compared to other countries in its neighborhood, Vietnam’s logistics market is still in its infancy. Wyatt points out that, “The logistics industry will grow along with e-commerce.”

JLL’s final trend is that the “hotel” lifestyle is popular with millennials, or people born between 1980 and 2000. People of this generation are unlikely to stay with their parents and prefer to have their own space. This opens up opportunities for both single and shared dwellings and developments in key city districts will be popular with this market.