Key Takeaways
- • The Vietnam Institute for Real Estate Market Research and Evaluation (VARS IRE) argues that REITs can serve as a "capital turnover" mechanism, converting income-producing real estate assets into capital that can be reinvested.
- • According to NAREITs, Asia had 263 listed REITs with total market capitalization of approximately US$235.8 billion at the end of 2024, while Vietnam has not yet developed a comparable REIT market.
- • Singapore had 39 REITs and Property Trusts with total market capitalization of approximately S$100 billion, per REITAS, and its experience is cited as a model for the supporting ecosystem Vietnam would need.
- • VARS IRE recommends six reforms: legal framework revision, tax mechanisms to limit double taxation, suitable asset classes, a long-term institutional investor base, stronger governance and disclosure standards, and controls on leverage and maturity risk.
- • VARS IRE frames the shift in Vietnam's property market from price-appreciation expectations toward cash-flow and exploitation value as favorable to the REIT model.
Summary
VARS IRE, a Vietnamese real estate research body, contends that REITs can help real estate businesses recover capital tied up in completed assets. In the traditional model, businesses hold substantial capital in finished assets and typically recover it by selling them or pledging them as collateral for debt. According to VARS IRE, the Vietnamese market is moving away from a sales-driven phase, in which values depended on location, land prices, project progress and price-appreciation expectations, toward a phase where an asset's ability to generate cash flow matters more.
VARS IRE says this shift aligns with the REIT operating model, which values assets on occupancy, rental rates, tenant quality, contract terms, net operating income, operating costs and management capability. The institute argues that this could push developers from a "develop to sell" approach toward "develop to create value and exploit long-term" thinking. It also notes that REITs are not the buyers of every property; eligibility depends on legal standing, operational efficiency, cash flow potential, transfer price, expected returns and legal investment restrictions. Related-party transactions must be tightly controlled to protect investors.
Vietnam's gap is largely one of scale and ecosystem rather than the absence of law. According to NAREITs, Asia had 263 listed REITs with total market capitalization of approximately US$235.8 billion by the end of 2024, while Vietnam has no REIT market comparable to the region's major markets. The institute notes that Vietnam's real estate investment fund framework dates to Circular 228/2012/TT-BTC and was further regulated under the 2019 Securities Law and Circular 98/2020/TT-BTC, but these funds differ from international REIT structures in legal form, investment scope and operating mechanics. Techcom Vietnam Real Estate Investment Fund (FUCVREIT) is cited as an example, though its size remains small. Many Vietnamese funds with large real estate weightings invest in real estate company shares rather than directly owning income-producing property.
VARS IRE cites Singapore, which per REITAS has 39 REITs and Property Trusts with total market capitalization of approximately S$100 billion, as evidence that success depends on a broader ecosystem spanning tax policy, stock markets, asset classes, institutional investors, valuation, governance and secondary markets. The institute also flags risks: REITs are sensitive to interest rates and cost of capital, face underlying asset risks such as falling occupancy or tenant defaults, and can amplify losses through excessive leverage. It stresses that REIT share liquidity does not equal the liquidity of the underlying property.
To develop the market, VARS IRE recommends clarifying rules for establishing, owning, transferring and contributing assets to funds; developing tax treatment that limits double taxation; creating asset classes such as offices, shopping malls, industrial parks, logistics, data centers, hotels and rental apartments; building a long-term institutional investor base including insurers, pension funds and investment funds; raising valuation, governance, audit and disclosure standards; and controlling leverage and maturity risk. The institute positions REITs as a complement to, not a substitute for, bank credit, equity and corporate bonds, which typically fund development before assets generate stable cash flow.
VARS IRE says this shift aligns with the REIT operating model, which values assets on occupancy, rental rates, tenant quality, contract terms, net operating income, operating costs and management capability. The institute argues that this could push developers from a "develop to sell" approach toward "develop to create value and exploit long-term" thinking. It also notes that REITs are not the buyers of every property; eligibility depends on legal standing, operational efficiency, cash flow potential, transfer price, expected returns and legal investment restrictions. Related-party transactions must be tightly controlled to protect investors.
Vietnam's gap is largely one of scale and ecosystem rather than the absence of law. According to NAREITs, Asia had 263 listed REITs with total market capitalization of approximately US$235.8 billion by the end of 2024, while Vietnam has no REIT market comparable to the region's major markets. The institute notes that Vietnam's real estate investment fund framework dates to Circular 228/2012/TT-BTC and was further regulated under the 2019 Securities Law and Circular 98/2020/TT-BTC, but these funds differ from international REIT structures in legal form, investment scope and operating mechanics. Techcom Vietnam Real Estate Investment Fund (FUCVREIT) is cited as an example, though its size remains small. Many Vietnamese funds with large real estate weightings invest in real estate company shares rather than directly owning income-producing property.
VARS IRE cites Singapore, which per REITAS has 39 REITs and Property Trusts with total market capitalization of approximately S$100 billion, as evidence that success depends on a broader ecosystem spanning tax policy, stock markets, asset classes, institutional investors, valuation, governance and secondary markets. The institute also flags risks: REITs are sensitive to interest rates and cost of capital, face underlying asset risks such as falling occupancy or tenant defaults, and can amplify losses through excessive leverage. It stresses that REIT share liquidity does not equal the liquidity of the underlying property.
To develop the market, VARS IRE recommends clarifying rules for establishing, owning, transferring and contributing assets to funds; developing tax treatment that limits double taxation; creating asset classes such as offices, shopping malls, industrial parks, logistics, data centers, hotels and rental apartments; building a long-term institutional investor base including insurers, pension funds and investment funds; raising valuation, governance, audit and disclosure standards; and controlling leverage and maturity risk. The institute positions REITs as a complement to, not a substitute for, bank credit, equity and corporate bonds, which typically fund development before assets generate stable cash flow.
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