Industrial real estate thrives thanks to FDI

Colliers Vietnam’s latest report on the industrial real estate market shows that Ho Chi Minh City (HCMC) continues to lead the country in rental rates (US$214 - 300/square meter/term) with the occupancy rate of 95 percent. The city has abandoned the planning of three slow-moving industrial parks (IPs) and added the planning of two new IPs with a total area of 668 hectares.

Industrial parks are targeting green, sustainable standards

The city also expects to have an additional supply of large-scale IPs and high-tech parks in the near future when it has just been allowed to shift the purpose of land use from agricultural land of less than 500 hectares to industrial land.

Meanwhile, in the north, the average rent was US$168/square meter/term, up five percent compared to the previous quarter, with the occupancy rate of 94 percent. In the second quarter, the market added 116 hectares of new industrial land for lease from Tam Duong 1 IP (Vinh Phuc Province). Future supply will shift to satellite areas such as Vinh Phuc, Lang Son, Nam Dinh provinces, and Hai Phong City.

Vu Minh Chi, Senior Manager from Colliers Vietnam, assessed that a series of large infrastructure projects have just been completed and commenced nationwide, showing the bright prospects of Vietnam’s industrial real estate market. In the north, the Ha Giang - Tuyen Quang expressway and the Ring 4 project will help connect northern provinces even better. The Ring Road 3 system in the south and the Bien Hoa - Vung Tau, Dau Giay - Phan Thiet, Ben Luc - Long Thanh highways, when completed, will create a traffic route connecting the Mekong Delta and HCMC with the rest of the southeastern region.

The Bien Hoa - Vung Tau expressway - Photo: PL

Vietnam has introduced policies to attract FDI, such as corporate income tax exemption for the first four years of operation, 50 percent corporate income tax reduction for the next five years and other business support incentives.

In addition to the promulgation of Resolution No.115/NQ-CP and Decree 35/2022/ND-CP regarding the development of urban areas, industrial parks and export processing zones, the Government is also speeding up the disbursement of public investment for infrastructure projects like expressways, ports, airports and belt roads in the northern, central and southern regions, creating a more convenient connection between IPs and key economic zones, and accelerating the formation of and more IPs in the north and south.

Meanwhile, more and more foreign investors in the fields of high technology and electronics have chosen Vietnam as a destination. For example, China’s BYD Auto Co. plans to build a factory in Vietnam to produce auto parts to further increase its supply chain in Southeast Asia.

In the coming time, the green, smart and sustainable industrial park model is interested in and implemented by industry giants. For example, VSIP Group’s project in Binh Duong Province is currently implementing the construction of VSIP III Industrial Park according to the model of a green, smart and sustainable industrial park. In addition to cleaning up the environment, this construction model helps reduce the amount of CO₂ generated, contributing to reducing the greenhouse effect and climate change, leaving a positive impact on workers’ spirit, and creating spillover effects to investors around the world.