Despite the recession, “eagles” still flock to Vietnam to “nest” in industrial zones, the industrial real estate market is more vibrant than ever.
In 2021, Vietnam has 357 newly established industrial zones, the highest in Southeast Asia.
According to the Ministry of Planning and Investment, the total foreign direct investment (FDI) registered in Vietnam in 2021 will reach over 31.15 billion USD, of which FDI capital for real estate business accounts for 8. .4% corresponds to the amount of 2.616 billion USD.
In the first quarter of 2022, registered FDI capital into the Vietnamese market reached 3.2 billion USD, disbursed up to 4.42 billion USD. In which, the sectors attracting the largest capital are processing and manufacturing industry (60%) and real estate (30%).
In recent months, Vietnam has welcomed many FDI eagles to invest in industrial zones to expand its scale and production capacity, such as Coca-Cola (Singapore/US) investing 136 million USD in Phu An Thanh Industrial Park. (Long An); Libra International Investment (Singapore) invests 210 million USD in Thanh Thanh Cong Industrial Park (Tay Ninh), Shinkong Synthetic Fibers (Taiwan) invests 85 million USD in Phu My 3 Industrial Park (BRVT), Teijin Frontier Co.Ltd (Japan) ) invested 40 million USD in Tien Hai Industrial Park (Thai Binh)… but most notably Lego Group (Denmark) invested in VSIP 3 Industrial Park (Binh Duong) with a capital of more than 1.3 billion USD.
At the Webinar “Looking for investment opportunities in Industrial Parks – The rising trend of the market” Organized by VKI (INTECH Group) took place on May 26, 2022. Mr. Le Huy Dong – Hanoi Office Manager, Industrial Real Estate Services Division (Savills Vietnam) commented: “Demand for land in industrial zones and ready-built factories has increased dramatically“.
In the past two years, Vietnam’s industrial real estate market has become the most attractive investment country in Southeast Asia.
In 2021, the total area of industrial zones in some northern provinces is 20,567 ha, of which the leased area is 13,143 ha, the average occupancy rate is estimated at 87%. The long-term land rental price (until the end of the land use term) in industrial zones in the North is about 100 USD/m2. In which, the highest rental price for industrial land in Hanoi is up to 129 USD/m2 and the lowest price in Hai Duong is only 79 USD/m2.
Meanwhile, industrial zones in the Southern economic region (2021) have a total area of 47,057 hectares, the leased area is 29,679 hectares, the occupancy rate is also 87%. The average land rent is up to 115 USD/m2, the highest in HCMC is 161 USD/m2 and the lowest is in Tay Ninh with only 85 USD/m2.
Entering 2022, industrial land prices still maintain a strong growth momentum and set new peaks, averaging $120/m2/lease cycle (up 9% y/y) thanks to the wave of FDI investment. poured into Vietnam right after opening.
The need to expand production of enterprises is gradually existing. As for the ready-built factory market, the average rental price is 4.8 USD/m2/month across the country, only increasing by 0.93% compared to the fourth quarter of 2021.
In 2021, Vietnam entered the top 10 emerging logistics markets globally, rising 3 places to 8th place out of 50 countries. Among ASEAN countries, Vietnam is only behind Indonesia and Malaysia, ahead of Thailand, the Philippines and Cambodia.
The value of the e-commerce market in Vietnam in the period of 2020 is estimated at 11.8 billion USD, considered one of the fastest growing digital economies in Southeast Asia, with a growth rate of 36% in 2020. .
All these factors are increasingly promoting the development of the industrial real estate market across the country as businesses need to expand their scale and production capacity to meet the market’s needs.
Sharing about Vietnam’s industrial real estate vision in the near future, Mr. Le Huy Dong said:In order to enhance the global value chain, the major players in the industry started to upgrade their production capacity by using emerging technology such as artificial intelligence (AI), 3D printing.“.
That shows, the future of industrial real estate will be an industry 4.0 and smart manufacturing. The manufacturing industry can achieve 16% growth in strategy 4.0 by 2030, if SMEs start to implement mid-tier technologies and new technologies can help this sector increase by 7- 14 billion USD.
Vingroup has started using 1,200 ABB robots in some of its welding processes, while KTG Industrial JSC has developed a 4.0 technology ready-built factory in Dong Nai province.
Besides the application of technology, the sustainable eco-industrial park model is also considered a new trend to enhance clean technology and low carbon.
In the future, IPs will aim to be restructured to cluster, which can help production activities in IPs create a higher value chain and bring benefits to specific industries in the field of processing and processing. create.
Although the industrial real estate market is becoming more and more exciting, in 2020 and from the beginning of 2021 until now. There have been many owners of IPs experiencing debt pressure and want to sell or sublease assets to raise capital.
Sale or sublease is becoming a smarter and more viable option, helping businesses convert real estate into cash efficiently.
Following the Economic Lifestyle
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