COVID-19 has caused temporary difficulties for upcoming business plans, but with a long-term investment strategy, industrial real estate in Vietnam is still very attractive. (Photo doanhnghiepphattrien.vn)Hanoi (VNS/VNA) — Vietnam has emerged as a popular destination forindustrial property projects as increased labour costs, trade disputes andCOVID-19 prompt global manufacturers to vary their supply chains throughoutAsia, according to CBRE.
TheUS-China trade conflict benefited Vietnam’s industrial property market in 2019as manufacturers began shifting production to alternative markets.
Averageasking rents for industrial land in Vietnam increased by as much as 10 percent,with some industrial parks reporting rent growth of up to 40 percentyear-on-year, CBRE said.
Vietnam JonesLang Lasalle Company (JLL Vietnam) said land prices in the industrialproperty segment have reached new levels even though the disease has impactedthe land lease process.
COVID-19has caused temporary difficulties for upcoming business plans, but with along-term investment strategy, industrial real estate in Vietnam is still veryattractive.
Inthe second quarter of this year, JLL Vietnam recorded rising land prices withan average of 106 USD per sq.m for a lease cycle, up 9.7 percent compared tothe same period last year for the southern industrial property market.
Meanwhile,the rent price of ready-built factories was still stable at 3.5-5 USD per sq.mper month, because the contract is only short term for 3-5 years and tenantsare also susceptible to the pandemic's impact.
Althoughthere are some barriers to entry, including a shortage of industrial land inprime locations and a lack of infrastructure in key areas, Vietnam’smanufacturing industry and industrial real estate market stand to benefit fromthe rapid changes in global trade and supply chains, as long as trade withdeveloped countries remains a key growth driver, according to CBRE./.
VNA
