In the past 6 months, despite the inevitable impacts of the pandemic, the Industrial Real Estate market in Vietnam still witnessed many positive signs, including a number of mergers and acquisitions deals, an increase in industrial land areas, etc.
A vibrant northern region
According to the Ministry of Planning and Investment, until June 20, 2021, Vietnam has attracted a total of US$15.27 billion in Foreign Direct Investment. The manufacturing and processing sector attracted a total of US$6.97 billion (accounting for 45% of the total investment capital), in which there are 273 new projects which receive a total investment capital of US$3.09 billion and 286 existing projects with a total investment capital of US$3.38 billion.
A vibrant northern region
According to the Ministry of Planning and Investment, until June 20, 2021, Vietnam has attracted a total of US$15.27 billion in Foreign Direct Investment. The manufacturing and processing sector attracted a total of US$6.97 billion (accounting for 45% of the total investment capital), in which there are 273 new projects which receive a total investment capital of US$3.09 billion and 286 existing projects with a total investment capital of US$3.38 billion.
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Graph 1: Breakdown of total Foreign Direct Investment capital in the first 6 months of 2021Mr. John Campbell, Industrial Real Estate Manager at Savills Vietnam, has stated that the northern region received the majority of newly registered investment capital for the manufacturing sector, totaling up to US$1.97 billion, accounting for 64% of the total investment capital; followed by the southern region with US$728 million (23%), while the central region attracted US$395 million (13%).
Aggregated by provinces, Bac Giang Province has gained the highest total newly registered capital of US$589 million, followed by Quang Ninh with USS$569 million and Bac Ninh with USS$222 million. The representative of the southern region, Binh Duong, ranked 4th with US$208 million.
Aggregated by investors, the largest production projects in the first 6 months of 2021 are those of Jinko Solar (Hong Kong, China), which is based in Quang Ninh Province, and Bac Giang Province-based Fukang Technology (Singapore), which attracted a total investment capital of US$498 million and US$270 million, respectively.
A bustling market
The market also witnessed a number of new merger and acquisition deals in the first 6 months of 2021. Typically, Boustead Projects Co., LTD. has reached an agreement to acquire a 49% stake in KTG & Boustead Industrial Logistics JSC.
If successful, this partnership will bring together 13 properties (10 of which belong to KTG and 3 belong to Boustead Projects) with a total asset value of up to US$141 million, total land area of approximately 840,000 m2 and 550,000m2 of total rental area.
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Graph 2: Total FDI capital of the first 6 months of 2021 by Province
ESR Cayman Ltd. (the leading Logistics Real Estate platform in Asia-Pacific) and BW Industrial Development JSC (a developer and operator of Industrial and Logistics Real Estate in Vietnam) have formed a joint venture to develop 240,000 m2 of industrial real estates in My Phuoc 4 industrial park. This partnership marks the entry of ESR Cayman Ltd. into the Vietnam market, expanding the group's scope of activities in the growing region of Southeast Asia.
Regarding new projects, Logos Property's 81,000m2 project in Bac Ninh’s VSIP 1 industrial park is expected to come into operation in the fourth quarter of 2021. A relatively new investor in the market, Vietnam Industrial Park Group JSC, has acquired 250 hectares of land area with an investment capital US$300 million. The company aims to develop sustainable, high-end factories and warehouses for lease in Vietnam with an investment portfolio located across the country, including Bac Giang, Hai Phong, Hai Duong, Dong Nai and Long An.
Regarding new projects, Logos Property's 81,000m2 project in Bac Ninh’s VSIP 1 industrial park is expected to come into operation in the fourth quarter of 2021. A relatively new investor in the market, Vietnam Industrial Park Group JSC, has acquired 250 hectares of land area with an investment capital US$300 million. The company aims to develop sustainable, high-end factories and warehouses for lease in Vietnam with an investment portfolio located across the country, including Bac Giang, Hai Phong, Hai Duong, Dong Nai and Long An.
Theo Duy Quang
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