Chau Duc Industrial Park in Chau Duc district, Ba Ria - Vung Tau province (Photo: VNA)The availability of land in industrial parksshould remain constrained in 2024 due to challenges in land valuation, theconversion of agricultural land to industrial land through auctions anddifficulties in land compensation and resettlement, according to SSI Research.
Currently, several listed industrial parkinvestors have signed Memorandums of Understanding (MoUs) in the second half of2023 for leasing industrial land to new tenants. As a result, these agreementswill be converted into official contracts and recorded as revenue in 2024.
However, there are currently around 34industrial parks in the process of completing their legal procedures, and sevenindustrial parks undergoing accelerated land clearance in provinces such as HaiDuong, Thai Nguyen, Thai Binh, Ba Ria - Vung Tau, according to the latestassessment by FPT Securities (FPTS).
Therefore, the nationwide supply of industrialpark land is expected to reach 142,000 hectares in 2024, an increase of 12,000hectares, or 9% from last year. The expansion will contribute to a significant36% increase in the available land area for leasing compared to 2023.
On demand side, the northern region is forecastto experience high demand for industrial park land leasing this year, driven bythe shift in production facilities, particularly in the electronics andsemiconductor sectors, said SSI Research.
In the southern region, there is also animprovement in the demand for industrial park land from manufacturing companiesin textiles, wood, leather shoes, logistics, and the food and beverageindustry.
As the supply is still insufficient, it isexpected that the average land rental prices for listed industrial park investorswill increase by 15.5% year-on-year in 2024.
Meanwhile, FPTS said that the rental prices forindustrial park land in tier 1 markets are projected to increase by 4% in theNorth and 7% in the South this year.
The tier-1 markets in the northern regioninclude Hanoi, Bac Ninh, Hai Duong, Hai Phong and Hung Yen provinces. In thesouthern region, they encompass Ho Chi Minh City, Binh Duong, Dong Nai, andLong An provinces.
According to the securities firm, the trend ofrising industrial park land will persist in the long term, aligning with theDecision on the allocation of targets for national land use planning in the2021-2030 period and the vision until 2050, as well as the national land useplan for the five-year period of 2021-2025.
Given positive forecasts on industrial park rental prices, severallisted companies involved in the sector, such as Kinh Bac City DevelopmentHolding Corporation (KBC), IDICO Corporation (IDC), and Sonadezi Chau DucShareholding Company (SZC), are poised to benefit.
For KBC, Trang Due 3 Industrial Park, spanning a vast area of 687hectares in An Lao district of Hai Phong city, will contribute to its overallbusiness performance as early as 2024. Despite the ongoing completion of legalprocedures for the project, there are already prospective tenants eagerlyawaiting approval to lease the land.
This is primarily due to the industrial park's advantageousgeographic location within Dinh Vu - Cat Hai Economic Zone, which offers morefavourable tax incentives.
KBC is also actively advancing the development of Trang Cat UrbanArea project, covering nearly 585 hectares in Hai Phong city, with a totalestimated development budget of over 11.3 trillion VND (460.3 million USD). Theentire land area has already been transferred to the company by the Hai PhongCity People's Committee.
In the fourth quarter of 2023, KBC successfully handed over 10hectares of land and cleared 108 hectares of remaining land in the Nam Son HapLinh Industrial Park (Bac Ninh province), as well as delivered 18 hectares ofland in Tan Phu Trung Industrial Park (HCM City).
Additionally, KBC is set to lease out the remaining 22 hectares ofland in Quang Chau Industrial Park (Bac Giang province), effectively achievingfull occupancy of the industrial park.
Regarding IDC, the company has signed MoUs and lease contracts at HuuThanh Industrial Park in Long An province since the second half of 2023. Theleased area spans 35 hectares, a 35% increase from 2023.
For SZC, despite operating primarily in Chau Duc Industrial Park,the company still has potential for stable business operations for 8-10 moreyears. With approximately 500 hectares of unleased land and improvinginfrastructure, there is room for increasing rental prices in the future.
Nevertheless, according to SSI research, industrial real estatecompanies may encounter difficulties with the implementation of the globalminimum tax on January 1, 2024.
This could lead to a reduction in the tax incentives previously providedto tenants in industrial parks, including a two-year corporate income taxexemption and a 50% tax reduction for the subsequent four years./.
VNA
