The property market in Vientiane, the capital of Laos, has begun to moderate at a sustainable pace according to the latest research from Colliers International.
In its Vientiane (Laos) Property Market Report the agency noted that the Gross Domestic Product of the country increased by around 7.5 to 8 percent per year over the course of the past few years. The government has a plan to improve Laos from a landlocked country to a land-linked one with new roads and a high-speed train.
New special and specific economic zones have also become a new magnet for foreign investors.
Vientiane’s population is expected to continue its rapid increase over the next 20 years, presenting opportunities and challenges. The young population will stimulate growth over the next 20 years.
Colliers reported that in 2009, some 45 percent of apartments for lease in Vientiane were completed, and that the total supply at the end of 2013 will be approximately 300.
The total area of office space in Vientiane is almost 49,700 sqm, and nearly 79 percent of that figure was added to the market from 2010 to 2012. Limited office space is still evident in high occupancy rates.
In the retail sector, 45 percent of the total supply was added in 2011 – 2012. The retail supply in Vientiane at the end of 2013 is approximately 128,000 sqm.
“Many foreign investors are entering Laos either as part of their business expansions or for new opportunities, so the number of expat and foreign tourists has continued to increase during the past few years and will stimulate growth over the next few years,” the report noted.
The number of apartments in Vientiane is limited according to Colliers, and no new supply is expected during the next two years. As this dearth of supply is likely to continue, occupancy rates in all projects will remain high.
Although some expats still rent their own houses, but lack facilities such as swimming pools, gyms, cleaning services, internet, and security guards, many of them who work in Vientiane are moving to apartments.
“The number of foreign investors wanting to extend their businesses to Laos, and also invest in new projects, has kept increasing so this is a positive factor for the apartment business,” the report concluded.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote
this story. To contact him about this or other stories email andrew@propertyguru.com.sg