Vietnam leads Southeast Asia in terms of infrastructure development spending

HANOI, September 22 (Engineering Daily) -- According to CBRE, large-scale urbanization along with positive economic prospects is putting pressure on the development of high-level infrastructure in Vietnam.

CBRE has released the report "Connecting ASEAN Countries - Infrastructure, Integration and Growth of Real Estate Market". It highlights key projects in the countries and assesses the impact of connectivity between countries in the region on industries and real estate.

Vision of the ASEAN Economic Community aims to a free trade and free movement of skilled labor among countries. Each country is also focusing on developing its own infrastructure.

According to CBRE, urban population growth in Vietnam has increased from 27% in 2005 to 34% in 2015, while in Thailand this figure is 50%. Currently, Vietnam is leading in Southeast Asia for infrastructure development, accounting for 5.7% of GDP. However, investment in infrastructure in ASEAN still lacks the participation of private capital, which is a challenge in the region. More than 90% of Asia's infrastructure investment comes from the public sector, according to ADB.

Two metro lines in Ho Chi Minh City and Hanoi are key infrastructure projects to promote the development of satellite economic zones. There are also other important projects under implementing such as Bach Dang Bridge, Van Don International Airport, National Highway 4B, etc. and projects in the planning stage such as East Economic Corridor. The highway connects Ho Chi Minh City and Phnom Penh with the goal of promoting the development of the automotive, electronics, tourism, agriculture, construction and transportation industries.

Putting Vietnam in the context of the region helps to assess the potential effects of changing the dynamics of economic development in the region. In the real estate sector, the logistics sector will benefit greatly from increased intra-nation trade and inter-nation trade thanks to large investments in infrastructure development in the short and medium term.

In the long run, the fragmentation of urban areas as well as the outward expansion of cities and towns will provide many opportunities for investors, owners and residents.