Illustrative image (Source: VNA)Rising rents and high occupancy rates at key IPs in the north and the south may be cause for concern at multinational corporations looking for locations close to Hanoior Ho Chi Minh City, said Savills Vietnam Industrial Services Manager John Campbell.
Industrial real estate has enjoyed positive gains inboth rental rates and occupancy rates despite the COVID-19 pandemic.
Savills Vietnam data shows that demand forindustrial real estate has been rising since 2018, leading to a shortage.
Average occupancy rates at IPs were high in2020. In northern areas they stood at around 90percent in Hanoi, 95 percent in Bac Ninh, 89 percent in Hung Yen, 82 percent inHai Duong, and 73 percent in Hai Phong. In the south, they were 88 percent in HCMCity, 79 percent in Ba Ria-Vung Tau, 84 percent in Long An, and 94 percent inDong Nai. Most notably, in Binh Duong the average was 99 percent.
Matthew Powell, Director of Savills Hanoi, attributed the marketvibrancy and spike in demand for land to better infrastructure and the abilityto access roads, ports, and airports.
As the demand - supply gap widens, prices aremoving up, Savills Vietnam said.
In HCM City, leases in IPs have reached 147 USD per sq.m and 123 USD per sq.min Long An. In Hanoi they are up to 129 USD per sq.m and 95 USD per sq.m in BacNinh, it noted.
If prices continue to rise, Vietnam’s competitiveness in terms of price will beweakened unless there is more new supply, Campbell warned.
According to the Ministry of Planning and Investment, Vietnam has 284 operatingIPs and another 86 under construction.
Savills’ experts said infrastructure at IPs needs to be improved, while policiesand management mechanisms should be finalised to improve operational efficiency.
This is especially necessary for Vietnam to attract more waves of investment relocatingfrom elsewhere./.
VNA
