Industrial real estate: Need to accelerate to catch the ”wave” of investment

Experts estimate that the number of industrial parks needs to be improved in the next few years because the rental demand of businesses will continue to increase due to the trend of shifting supply chains from China to Vietnam.

The occupancy rate of industrial zones is high
According to the development plan of industrial parks in Vietnam, there are currently about 563 industrial parks (IZs), with a total area covered about 210,900 hectares. However, some IPs have not yet operated. Up to now, the actual number of industrial zones announced is 406, of which 361 projects are located outside economic zones, 37 projects are in economic zones and 8 other industrial power projects are located in border gate economic zones. The occupancy rate of industrial zones in Vietnam currently reaches 70.9%, equivalent to the level at the end of 2020.

Statistics of Savills Vietnam Company show that, in 6 key northern provinces, the supply of industrial zones reached 11,000 hectares. The occupancy rate so far is about 83% and there is only about 2,000 hectares left. The occupancy rate of industrial zones in Hanoi, Bac Ninh and Bac Giang has reached 96%, but there is still future supply coming from some new projects. Other localities such as Hung Yen with occupancy rate of about 77% and Hai Phong at 68%. In the southern region, the industrial zone in Ho Chi Minh City. Ho Chi Minh, Binh Duong and Dong Nai have very little vacant space. Long An and Ba Ria - Vung Tau will be alternative investment destinations thanks to good supply. Many factories are expected to be built in the near future thanks to their convenient location near major ports. In 6 key southern provinces, occupancy rates reached 84%. For ready-built supply, rent in the first 8 months was at an average of 6 USD/m2/month with a capacity of 88%. City. Ho Chi Minh City continues to be the market with the highest rental rates, followed by Binh Duong, Long An and Dong Nai.

industrial real estate  need to accelerate to catch the  ??wave ?? of investment
Actual photo at Phuoc Dong Industrial Park & Port, Long An
A report on the industrial real estate market recently published by SSI Securities Joint Stock Company shows that the total area of industrial land put into operation in 6 key industrial cities/provinces in the North has increased. 6.0% over the same period, to 10,600 ha in the first quarter of 2022. With this increase, the occupancy rate of industrial parks is at a high level (86.6%) as demand continues to exceed new supply. Meanwhile, the current occupancy rate of the five key southern industrial provinces/cities increased by 4.4% to 26,000 ha, bringing the occupancy rate of the southern provinces to 89.6%. In which, the new supply mainly comes from Ba Ria - Vung Tau, Dong Nai and Binh Duong.

Therefore, to meet demand, the North is expected to increase the supply from 3,600 hectares of newly opened industrial park land in the period of 2022 - 2023. Meanwhile, many investors in the South are also planning to expand their investment. industrial park infrastructure to welcome foreign investment. Accordingly, the industrial zone land area in the South is expected to increase by more than 3,500 hectares in the next two years to meet the growing demand in the region.

Opportunities and challenges in parallel
In the medium and long term, analysts of SSI Securities Company believe that the demand for land lease in industrial zones by foreign investors continues to be evaluated positively and will be the driving force for the development of industrial parks. development of the industrial park infrastructure construction industry.

Mr. John Cambpell - Deputy Director, Head of Industrial Services at Savills Vietnam, assessed the Government's tax incentives for high-tech companies as the driving force for these companies to enter the Vietnamese market. Male. These incentives also apply to investment projects in smart agriculture, sustainable and environmentally friendly initiatives.

According to Mr. John Campbell, when looking at industrialized economies around the world or in Europe, a lot of industrial zones are shifting to a more eco-friendly and economic model. Therefore, it is only a matter of time before Vietnam develops along this path. Likewise, in Southeast Asia, no other country is a party to as many free trade agreements (FTAs) as Vietnam. This helps build trust among high-value manufacturers globally. Vietnam has a young and dynamic workforce, a growing middle class with higher incomes. Vietnam has a stable and favorable environment for foreign businesses to invest in the long term.

Profit margin is one of the most attractive points for investors

Statistics show that compared to other markets in Asia and Southeast Asia, profit and output in Vietnam is currently one of the most attractive to investors. For example, for an industrial park (IZ) in operation, the last 6 sales and sublease deals have been done with a yield and profit of 8 - 11%. That shows that investment in industrial zones in Vietnam is bringing in quite good profits.

However, the expert of Savills also said that there are still certain challenges as currently, compensation costs plus land prices in Vietnam have increased a lot in recent times. Therefore, this is a challenge for investors who want to establish new IPs or convert agricultural land to industrial use.

Along with that are 2 long-term challenges including labor qualifications and infrastructure. According to Mr. John Campbell, Vietnam has a large labor force, many new manufacturing investments and the economy is moving up the value chain but still lacks a supply of skilled labor. Therefore, when attracting the attention of investors, the Government must also ensure that the quality and quantity of skilled labor are not too disparate compared to other markets in the region. So far, Vietnam has outlined in its socio-economic development strategy from 2021 to 2030 to reform education, improve the quality and accessibility of training, but this is not possible. do it overnight. In terms of infrastructure, South Vietnam is in dire need of improved transport networks, especially roads. Although Vietnam spends a lot of resources on infrastructure investment, it is still limited compared to some countries in the region.

Demand for apartments in Hanoi and Ho Chi Minh City. Ho Chi Minh all increased

The level of interest and the number of postings of most types of real estate in Ho Chi Minh City. Ho Chi Minh City increased significantly in the first 8 months of this year compared to the same period in 2021. Batdongsan.com.vn big data recorded in the first 8 months of 2022, the demand for apartments in Hanoi and Ho Chi Minh City . Ho Chi Minh City both increased over the same period last year.

Specifically, the number of times to buy apartments in Hanoi and Ho Chi Minh City. Ho Chi Minh City increased by 9% and 4% respectively. The number of apartment rentals in these two cities increased even more strongly, 25% and 48% respectively. Attracting a large amount of interest, the type of apartment with the selling price has increased in the past 8 months.

Notably, the growth rate of apartment prices in Hanoi is about twice or even three times higher than that of Ho Chi Minh City. Ho Chi Minh City, depending on the segment. Accordingly, pLL

Link:
https://thoibaotaichinhvietnam.vn/bat-dong-san-cong-nghiep-can-but-toc-de-don-song-dau-tu-113393.html

 

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  1. Ngày đăng: 10-11-2022
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