Industrial property anticipates shift of big investors

According to the report of the second quarter of 2023 of the Ministry of Construction, the demand for renting industrial parks (IPs) in the quarter remained stable. The increase in FDI capital in some provinces like Bac Giang, Bac Ninh, Quang Ninh, Nam Dinh makes the demand for industrial property to rise slightly.

The occupancy rates at IPs in northern and southern provinces reached about 80 percent and over 85 percent, respectively. The average land lease prices in the second quarter were basically stable compared to the previous quarter and rose about five to seven percent over the same period last year.

Industrial property continues to maintain attractiveness - photo: Binh Minh

So far, Vietnam has formed a system of more than 400 IPs on a total natural land area of over 128,000 ha, a total industrial land area of over 86,000 ha. The IPs have completed factory infrastructure with international quality, piloted studies on a number of industrial clusters in order to form production networks, supplies chains and participate more deeply in the global value chain.

At the Vietnam Industrial Property Forum (VIPF) in 2023 with the theme “Capturing opportunities from new capital flows” recently held in Ho Chi Minh City, Deputy Minister of Planning and Investment Tran Quoc Phuong emphasized that over the past time, Vietnam has continued to maintain macroeconomic stability, control inflation, improve business investment environment and enhance its international position. Vietnam has effectively participated in and implemented 16 signed free trade agreements (FTAs). It also has advantages in human resources and the domestic market with nearly 100 million people with a rapidly growing middle class, creating a market with large purchasing power.

At the forum, Chong Chee Keong, General Manager of Industrial Property at Frasers Property Vietnam, said that Vietnam is emerging as a new location in industrial development and attraction. This means that there will be a shift of low-end projects to new industrial areas to enjoy investment incentives.

In economic centers like Ho Chi Minh City, Binh Duong and others, priorities will be given to new industrial projects focusing on research and development.

In addition, small- and medium-sized enterprises (SMEs) tend to set up factories and production bases in Vietnam to anticipate the shift of “eagle” businesses and investors. For these businesses, the requirement is to have factories and facilities quickly to immediately receive orders and start operation. Paul Fisher - Country Director of JLL Vietnam - said, “We have noticed the growing interest of the international community, in which some investors have started to close transactions in the Vietnamese market. It is expected that FDI inflows into Vietnam will continue to increase in the coming time.”