Welcoming the wave of FDI investment, industrial real estate rental prices continue to increase

Industrial real estate attracts investment

In the first months of the year, the restoration of socio-economic activities and the opening of international flights to Vietnam have brought positive signals to the industrial real estate market.

According to the analysis of the global real estate consulting firm Jones Lang Leasalle (JLL), the industrial real estate market in Ho Chi Minh City in particular and the southern region in general has had many positive changes. Notably, the increase in land rental costs in industrial zones and high occupancy rates have become a rare bright spot in the current market situation.

Research by JLL Vietnam shows that, in the last quarter, in the southern region, the occupancy rate of industrial zones reached 85%. Besides, the industrial zone land rental price in the southern provinces also increased strongly. The unit recorded an average rent of $120 per square meter for the entire lease term, a 9% increase year-on-year.

In Ho Chi Minh City alone, the rental price of industrial land in the first quarter of 2022 averaged 190 USD per m2 for the whole cycle, the occupancy rate reached 90%. The annual rent growth rate of the industrial capitals in the South has always reached 8-9% a year in the past few years.

According to experts, the reason for the increase in industrial real estate rental prices is due to the new wave of FDI investment pouring into Vietnam after Vietnam reopened and businesses’ demand for production expansion went up.

The representative of Colliers said that at present, Ho Chi Minh City has many industrial parks that are running out of land for rent, which also promotes the industrial capitals as satellite areas such as Binh Duong, Long An, and Dong Nai to become attractive hot spots. the investors. According to Colliers, industrial real estate groups including factories, warehouses, and logistics all have high growth potential in 2022 thanks to fast-growing e-commerce in big cities.

Mr. Nguyen Van Dinh – Vice Chairman of Vietnam Real Estate Association forecasted that in the coming time, segments such as industrial real estate along with resort real estate will continue to be the segments attracting investment activities. .

Increase supply, promote industrial real estate development

According to the assessment of the Department of Housing and Real Estate Market Management (Ministry of Construction), a number of new industrial park projects approved for investment and implemented in the first quarter of 2022 will contribute to supplementing the supply chain. for the industrial real estate market in the future.

Specifically, as a factory and warehouse project with a scale of 13.4 hectares in Phu An Thanh Industrial Park (Long An), Capita Land Development (CLD) invested 1 billion USD to develop the industrial park, logistics area and CLD’s first urban area in Vietnam.

In addition, a number of other prominent projects such as VSIP 3 industrial park in Binh Duong, Amata Long Thanh high-tech industrial park, Dong Nai received land lease decisions. With the ready-built factory market, in addition to completing construction of existing projects, there were also two new projects started in Phu An Thanh industrial park, Long An and Frasers Property in Binh Duong industrial park. These projects are estimated to provide the market with more than 85,000 m2 of ready-built factories by the end of 2022.

Mr. John Campbell – Deputy Director of Savills Vietnam Industrial Services Department, assessed that since Vietnam reopened international routes, manufacturers can come to see the project directly, sign factory lease contracts, setting up bases in Vietnam, completing investment registration certificates and business registration certificates. This promotes high growth in the industrial land rental market, factories and warehouses.

Mr. John Campbell said that the Vietnamese government is encouraging companies to move to Vietnam, especially in the high-value-added industry, tax incentives for technology companies or R&D, renewable energy. Smart farming and construction have created a huge boost to help industrial real estate grow positively. “The industrial park market is facing a big breakthrough opportunity in the period of 2022 and beyond,” forecasted Mr. John Campbell.