A view of Quang Chau industrial zone in Bac Giang province (Photo: VNA) Hanoi (VNS/VNA)- The industrial market is the only real estate sector that hasenjoyed positive progress in both rental rates and occupancy rates during theCOVID-19 pandemic.
Some provinces with hot industrial real estate markets include Long An,Dong Nai, Binh Duong, Binh Dinh, Thanh Hoa, Quang Ninh, Hai Duong and Bac Giang,according to the Vietnam Real Estate Brokerage Association.
In 2020, the average occupancy rate in industrial zones was up more than 70percent year-on-year. The average factory rental price nationwide was 60-80,000VND per sq.m and the purchase price of land in industrial zones withinfrastructure ranged from 3 to 5 million VND per sq.m, according to Nguyen Van Dinh,Vice President cum General Secretary of the Vietnam Real Estate BrokerageAssociation.
A report from the association showed the number of proposals toresearch investment in new construction of industrial parks in 2020 alsoincreased sharply compared to previous years.
Meanwhile, CBRE Vietnam said as of the fourth quarter of last year, averageoccupancy rates of existing industrial parks since 2019 in five key northernindustrial cities and provinces (Hanoi, BacNinh, Hung Yen, Hai Duong and HaiPhong)reached 89.7 percent, a 2.1 percentage points increase year-on-year.
Similarly, the occupancy rate of four key southern industrial cities andprovinces reached 87.0 percent, a 2.5 percentage points increase from ayear prior.
Due to the production movement from China as well as the European Union (EU) –Vietnam Free Trade Agreement (EVFTA), demand for industrial land is increasingacross Vietnam. CBRE recorded that asking rents in some industrial parks in Hai Phong,Bac Ninh and Hai Duong in the North and HCM City, Dong Nai and Long An in thesouth increased from 20 percent to 30 percent.
The performance of ready-built factory and warehouse market remained stable dueto large supply added in 2019 and 2020 as well as delayed leasing activity fromtravel restrictions.
The strong growth of e-commerce and logistics companies since the outbreak ofCOVID-19 boosted demand for storage space and distribution facilities.
As a result, the need to find land for developing logistics facilitiesincreased significantly, reflected in the 20 percent of total inquiries forthis sector, recorded by CBRE.
In prime locations with limited industrial land supply, high-rise warehouseshave also started to emerge to create larger storage space for the needs ofe-commerce companies, a representative of CBRE Vietnam said.
With its resilience during the pandemic, the industrial sector in Vietnam hasbecome attractive for both international and local players, according to therepresentative.
In 2020, despite the pandemic, international warehousing giants such as GLP,LOGOS, and JD.com invested Vietnam. Vingroup, a major local realestate developer, also recently joined the market with two new industrial parksexpected to be ready in 2021.
Expansion of existing factories and new construction of manufacturingfacilities in the context of accelerated relocation strategy will be the mainsource of demand going forward.
While industrial land rent has reached a high level in well-located industrialparks, tenants have to seek new land supply in areas further from existingindustrial hubs.
In addition, industrial real estate developers are making changes in productdevelopment to adapt to the new situation. Outstanding features are theapplication of modern technology to management and operation of the facility,providing service packages including legal and human resources to helpcustomers save time and costs during project implementation, the representativesaid.
This is gradually creating a new model of industrial real estate development inVietnam, integrating industrial property provision and investment withmanagement support services.
The Vietnam Real Estate Brokerage Association said there will be many newindustrial zone infrastructure development projects approved in the nearfuture.
Along with that, many logistics projects servingindustrial zones will also be promoted and the rental price of warehouse andfactory premises in 2021 is forecast to not increase compared to 2020.
At present, Vietnam has 260 industrial parks in operation and 75 underconstruction./.
Some provinces with hot industrial real estate markets include Long An,Dong Nai, Binh Duong, Binh Dinh, Thanh Hoa, Quang Ninh, Hai Duong and Bac Giang,according to the Vietnam Real Estate Brokerage Association.
In 2020, the average occupancy rate in industrial zones was up more than 70percent year-on-year. The average factory rental price nationwide was 60-80,000VND per sq.m and the purchase price of land in industrial zones withinfrastructure ranged from 3 to 5 million VND per sq.m, according to Nguyen Van Dinh,Vice President cum General Secretary of the Vietnam Real Estate BrokerageAssociation.
A report from the association showed the number of proposals toresearch investment in new construction of industrial parks in 2020 alsoincreased sharply compared to previous years.
Meanwhile, CBRE Vietnam said as of the fourth quarter of last year, averageoccupancy rates of existing industrial parks since 2019 in five key northernindustrial cities and provinces (Hanoi, BacNinh, Hung Yen, Hai Duong and HaiPhong)reached 89.7 percent, a 2.1 percentage points increase year-on-year.
Similarly, the occupancy rate of four key southern industrial cities andprovinces reached 87.0 percent, a 2.5 percentage points increase from ayear prior.
Due to the production movement from China as well as the European Union (EU) –Vietnam Free Trade Agreement (EVFTA), demand for industrial land is increasingacross Vietnam. CBRE recorded that asking rents in some industrial parks in Hai Phong,Bac Ninh and Hai Duong in the North and HCM City, Dong Nai and Long An in thesouth increased from 20 percent to 30 percent.
The performance of ready-built factory and warehouse market remained stable dueto large supply added in 2019 and 2020 as well as delayed leasing activity fromtravel restrictions.
The strong growth of e-commerce and logistics companies since the outbreak ofCOVID-19 boosted demand for storage space and distribution facilities.
As a result, the need to find land for developing logistics facilitiesincreased significantly, reflected in the 20 percent of total inquiries forthis sector, recorded by CBRE.
In prime locations with limited industrial land supply, high-rise warehouseshave also started to emerge to create larger storage space for the needs ofe-commerce companies, a representative of CBRE Vietnam said.
With its resilience during the pandemic, the industrial sector in Vietnam hasbecome attractive for both international and local players, according to therepresentative.
In 2020, despite the pandemic, international warehousing giants such as GLP,LOGOS, and JD.com invested Vietnam. Vingroup, a major local realestate developer, also recently joined the market with two new industrial parksexpected to be ready in 2021.
Expansion of existing factories and new construction of manufacturingfacilities in the context of accelerated relocation strategy will be the mainsource of demand going forward.
While industrial land rent has reached a high level in well-located industrialparks, tenants have to seek new land supply in areas further from existingindustrial hubs.
In addition, industrial real estate developers are making changes in productdevelopment to adapt to the new situation. Outstanding features are theapplication of modern technology to management and operation of the facility,providing service packages including legal and human resources to helpcustomers save time and costs during project implementation, the representativesaid.
This is gradually creating a new model of industrial real estate development inVietnam, integrating industrial property provision and investment withmanagement support services.
The Vietnam Real Estate Brokerage Association said there will be many newindustrial zone infrastructure development projects approved in the nearfuture.
Along with that, many logistics projects servingindustrial zones will also be promoted and the rental price of warehouse andfactory premises in 2021 is forecast to not increase compared to 2020.
At present, Vietnam has 260 industrial parks in operation and 75 underconstruction./.
VNA
