Despite the fourth wave of COVID-19 in Vietnam, the market for Industrial Park Real Estate (IPRE) still records a positive growth with rental prices constantly on the rise and a series of mergers and acquisition deals worth millions of dollars executed.
From the initial stage of transformation to the powerful transition to a new position amidst a gloomy economic environment caused by the pandemic, the IPRE sector consistently manages to achieve optimistic results, achieving a year-on-year growth rate of 9.9% as of May 2021.
According to reports from market research organizations, in the first 6 months of 2021, Vietnam is also an attractive destination for international investors and manufacturers. Therefore, the development prospect of IPRE in Vietnam remains extremely positive. The average occupancy rate in industrial parks across the country currently remains at 85-90%, more specifically, 90% occupancy in Hanoi, 95% in Bac Ninh, 99% in Binh Duong, etc.
Assessing the positive signs of the market, experts express that while the US-China trade war still has not shown any signs of cooling down, many companies have applied the China + 1 model, which looks to move manufacturing to new locations in order to diversify and secure supply. Vietnam is currently one of the alternative destinations that foreign companies have picked to implement this model. Therefore, IPRE will continue to be the cash cow of the overall real estate industry, with high demand and increasing capital market activities.
The magnet to attract foreign investment
In order to maintain strong growth and attract even more investors into the Vietnam market, early planning for long-term solutions is essential, starting from this moment in time.
The currently proposed solutions are focused on: Diversifying supply in the neighborhood areas of Hanoi and Ho Chi Minh City to reduce the "heat" of rental prices; renovating the industrial park development model; completing the legal framework for industrial park development; and increasing the supply of qualified and skilled labor. The linkage between industrial zones is also crucial to minimize disruptions to the goods production and logistics chain. As a result, production costs decrease, and competitiveness of products from Vietnam increases compared to other countries in the region. In fact, in the midst of the transformation period, industrial parks which meet the above requirements have managed to attract more top investors, creating billion dollars-worth of deals in recent years. Most recently, the news which attract the attention of investors in the capital city more than any is one which involves N&G Corp. signing an agreement with a major Korean partner to push for the establishment of the Vietnam - Korea Techno Park Complex within the South Hanoi Supporting Industrial Zone.
Picture: The South Hanoi Supporting Industrial Zone measures up to 640ha of land area, and is targeted to expand further.
The South Hanoi Supporting Industrial Zone receives investment in phases, with a total expected investment capital of up to US$5 billion. The Industrial Zone is is built within and is the starting point in the development roadmap of Phu Xuyen industrial-service satellite urban area, located in the South of Hanoi. The master plan of this industrial-service urban area ensures that it is capable to be scaled up to become a satellite city for industrial manufacturing, commerce and logistics, worthy of international stature. The project is being carried out by a leading design corporation in Japan, Nikken Sekkei Civil (NSC).
With a plan to become an industrial zone focusing on the development of supporting industries and high tech, the project has been of interest to many domestic and international investors due to its convenient location, adjacent to the 1A National Highway and 1B National Highway – the Phap Van - Cau Gie expressway, suitable for high volumes of traffic. The leasing area is flexible according to investors' needs; with duration of the lease lasts up to 70 years. Furthermore, projects manufacturing supporting industries products is able to enjoy preferential policies on corporate income tax and import and export tax. Currently, the project has completed phase 1, with leasing area ready to be handed over immediately to investors for the construction of factories.
From the initial stage of transformation to the powerful transition to a new position amidst a gloomy economic environment caused by the pandemic, the IPRE sector consistently manages to achieve optimistic results, achieving a year-on-year growth rate of 9.9% as of May 2021.
According to reports from market research organizations, in the first 6 months of 2021, Vietnam is also an attractive destination for international investors and manufacturers. Therefore, the development prospect of IPRE in Vietnam remains extremely positive. The average occupancy rate in industrial parks across the country currently remains at 85-90%, more specifically, 90% occupancy in Hanoi, 95% in Bac Ninh, 99% in Binh Duong, etc.
Assessing the positive signs of the market, experts express that while the US-China trade war still has not shown any signs of cooling down, many companies have applied the China + 1 model, which looks to move manufacturing to new locations in order to diversify and secure supply. Vietnam is currently one of the alternative destinations that foreign companies have picked to implement this model. Therefore, IPRE will continue to be the cash cow of the overall real estate industry, with high demand and increasing capital market activities.
The magnet to attract foreign investment
In order to maintain strong growth and attract even more investors into the Vietnam market, early planning for long-term solutions is essential, starting from this moment in time.
The currently proposed solutions are focused on: Diversifying supply in the neighborhood areas of Hanoi and Ho Chi Minh City to reduce the "heat" of rental prices; renovating the industrial park development model; completing the legal framework for industrial park development; and increasing the supply of qualified and skilled labor. The linkage between industrial zones is also crucial to minimize disruptions to the goods production and logistics chain. As a result, production costs decrease, and competitiveness of products from Vietnam increases compared to other countries in the region. In fact, in the midst of the transformation period, industrial parks which meet the above requirements have managed to attract more top investors, creating billion dollars-worth of deals in recent years. Most recently, the news which attract the attention of investors in the capital city more than any is one which involves N&G Corp. signing an agreement with a major Korean partner to push for the establishment of the Vietnam - Korea Techno Park Complex within the South Hanoi Supporting Industrial Zone.
Picture: The South Hanoi Supporting Industrial Zone measures up to 640ha of land area, and is targeted to expand further.
The South Hanoi Supporting Industrial Zone receives investment in phases, with a total expected investment capital of up to US$5 billion. The Industrial Zone is is built within and is the starting point in the development roadmap of Phu Xuyen industrial-service satellite urban area, located in the South of Hanoi. The master plan of this industrial-service urban area ensures that it is capable to be scaled up to become a satellite city for industrial manufacturing, commerce and logistics, worthy of international stature. The project is being carried out by a leading design corporation in Japan, Nikken Sekkei Civil (NSC).
With a plan to become an industrial zone focusing on the development of supporting industries and high tech, the project has been of interest to many domestic and international investors due to its convenient location, adjacent to the 1A National Highway and 1B National Highway – the Phap Van - Cau Gie expressway, suitable for high volumes of traffic. The leasing area is flexible according to investors' needs; with duration of the lease lasts up to 70 years. Furthermore, projects manufacturing supporting industries products is able to enjoy preferential policies on corporate income tax and import and export tax. Currently, the project has completed phase 1, with leasing area ready to be handed over immediately to investors for the construction of factories.
Ánh Dương
Theo Nhịp sống kinh tế
Theo Nhịp sống kinh tế