This content is an excerpt from Savills Impacts, a global report on real estate trends that will shape the market in 2025. It is curated and supplemented with local insights from Savills Viet Nam. 

Following a period of global disruptions and deep shifts in socio-economic dynamics, the global real estate market is entering a new cycle, one that requires investors to reposition their strategies. In Vietnam, following an extended period of market cleansing, the real estate sector is beginning to show positive signs of recovery, driven by administrative reforms and infrastructure investment. In this context, the real estate investment strategy in Viet Nam for H2.2025 must be clearly redefined, grounded in international lessons and tailored to local realities.

The Impacts 2025 report by Savills highlights that the era of sustainable growth, which once made real estate a preferred profit-generating asset class, has now reached a plateau. The prolonged impacts of the COVID-19 pandemic, shifting monetary policies, and a global economy in long-term stagnation have fragmented the market, introduced new layers of unpredictability and required a fundamentally different investment mindset. Elevated interest rates have made bond yields more competitive, while expectations for capital appreciation in real estate have narrowed. Passive investment models, largely reliant on financial leverage and spread yield, are no longer a guaranteed return. Against this backdrop, investors must pivot towards an active strategy, built on core cash flows, operational excellence, and long-term positioning.

Rethink Strategy in a Post-Correction Market

Between 2016 and 2024, Viet Nam’s real estate market saw rapid growth across residential, office, and retail segments, especially in Ha Noi and Ho Chi Minh City (HCMC), driven by fast urbanisation and the rising demand for modern living. However, due to the pandemic, supply chain disruptions, credit tightening, and protracted legal bottlenecks, the market has since undergone a deep correction. Project delays, limited supply, and cautious investor sentiment have become common themes.

In response to these challenges, structural reforms have been accelerated. The implementation of the revised Land Law, Housing Law, and Real Estate Business Law (effective from August 2024) has helped remove bottlenecks in the project approval process and enhanced transparency, a key factor in attracting long-term capital. In parallel, public investment in infrastructure has been fast-tracked nationwide, from Long Thanh International Airport and the North-South Expressway to ring roads in Ha Noi and HCMC, strengthening regional connectivity and activating a new wave of growth in satellite urban areas.

Neil MacGregor, Managing Director of Savills Viet Nam, comments:

“Investor sentiment will improve significantly as planning approvals are granted, and projects can be brought to market. Easier access to land through auctions and a streamlined site clearance process will increase capital inflows into Viet Nam’s real estate sector.”

He also notes that peripheral markets stand to benefit the most from improved infrastructure, especially areas capable of supplying affordable housing. Meanwhile, in central locations, the branded residences model is expected to garner strong interest, mirroring trends seen in Bangkok and the Middle East, and drawing attention from domestic and international high-net-worth individuals, particularly as Ha Noi and HCMC increasingly assert themselves on the global stage.

According to Savills data, the first quarter of 2025 showed promising signs of recovery: Ha Noi recorded sales of nearly 8,000 apartments, an increase of 49% year-on-year; Grade A office space in HCMC reached an 88% occupancy rate; and the retail segment maintained its resilience with a 94% occupancy rate. Altogether, these indicators suggest the market is not only entering a new growth cycle but also undergoing a structural transformation, marking a pivotal phase that is promising and a test of conviction for long-term investors.

From Passive Assets to Service-Oriented Real Estate: Looking Ahead to H2 2025

The Impacts 2025 report highlights two major strategic directions that are reshaping the global real estate landscape. The first is theme-based investment, as opposed to traditional geographic or asset-class strategies, focusing on sectors such as data centres, healthcare, education, senior housing, and logistics. These are typically counter-cyclical segments closely aligned with long-term societal trends. Investment allocation in these sectors has increased from under 4% in 2008 to 13% by 2023.

In Viet Nam, this trend is gradually taking shape. According to MacGregor, “The growing middle and upper class in Viet Nam is driving demand in healthcare and education, while also supporting the expansion of retail and hospitality. Education has always been a priority for Vietnamese families, with the average household spending a higher amount on children’s education than neighbouring regions. As private education becomes more accessible, the sector holds considerable room for growth. Similarly, increasing health insurance coverage will unlock further opportunities in healthcare. In addition, as Viet Nam’s population begins to age, we expect more real estate developers to explore investment models focused on retirement communities and elderly care.” He also notes that Viet Nam’s logistics real estate remains full of potential, particularly as transport infrastructure and e-commerce continue to evolve in tandem.

The second strategic direction is a shift toward sustainable cash flow, driven by an emphasis on tenant experience. Investors are being compelled to focus on asset quality, operational efficiency, and alignment with occupier needs. Viet Nam is witnessing a surge in Grade A office developments, especially in Ha Noi, in response to a broader movement toward quality among occupiers.

The Director adds, “Today’s tenants are looking for more than just workspace. They’re increasingly concerned with factors that enhance employee well-being. Indoor air quality, natural light, gym and shower facilities are becoming key criteria in selecting a building.” He continues to say, “At buildings managed by Savills, we’ve implemented software that enable tenants to engage with events, fitness clubs, and other community activities.”

In parallel, domestic developers have begun rolling out projects with internationally recognised sustainability features, including green-certified office buildings with environmentally conscious design and operations. MacGregor, however, concludes that “there is still much work to be done to embed sustainability into real estate design and operations in Viet Nam; from reducing the carbon footprint during construction, to improving energy and water efficiency, and managing waste through treatment and recycling.”