Industrial parks in Ho Chi Minh City, Hanoi, Dong Nai, Bac Ninh,
Binh Duong fill 89-99%, The remaining vacant land is very limited, rent
increases 5-10% per year.
A recent report by Savills Vietnam shows that industrial park real
estate rental prices are still escalating during the new epidemic due to the
decreasing supply. The fact that the existing supply has almost filled up the
room and the new supply needs more time to prepare for launch, has created
leverage that causes the rental cost of industrial real estate to skyrocket.
These indicate that the market is still in a high bull cycle.
The latest industrial real estate market data of Savill recorded
an increase in occupancy rate in the northern key economic area over the same
period. The occupancy rate in Hanoi is up to 90%, Bac Ninh (up to 95%),
Hung Yen (89%) and Hai Phong (73%). Meanwhile, the southern area recorded
the occupancy rate in Ho Chi Minh City at 88%, Binh Duong at 99%, Dong Nai
(94%), Long An (84%), Ba Ria - Vung Tau (79%). ).
Although the cost of renting industrial land has increased, a
report by Savills Vietnam from 54 markets in 21 countries shows that Vietnam is
currently the place with the lowest operating costs in the ranking, becoming an
extremely attractive destination for multinational companies. At the same
time, from 2020, the Government of Vietnam has been planning to invest in
infrastructure and industrial parks to attract businesses in the supply
chain. Timely policies such as corporate tax exemption and reduction ensure
competition in the region such as Indonesia, Thailand and other Southeast Asian
The fact that industrial parks do not have much existing supply
leading to an increase in rents also brings a positive business picture for
industrial real estate giants despite the re-emergence of the pandemic and
complicated developments. There are many signals that 2021 will be a
bountiful year for industrial real estate developers who already have a large
Compared to the general level of the world, Vietnam is still
considered a country with good disease control, and also benefits from the wave
of investment shifting away from China. Therefore, the demand for
industrial real estate increased, leading to better business results of some
enterprises in this industry in the first quarter of the past year.
Troy Griffiths, Deputy General Director of Savills Vietnam
confirmed, when the US-China trade war has not shown any signs of cooling down,
many companies have applied the China + 1 model to look for new locations to
diversify and secure supply. With its adjacent location to China, as well
as converging many strategic advantages, especially the very competitive
industrial real estate rental costs, Vietnam is being interested by many
domestic and foreign businesses and considered as a alternative destination to
Mr. Troy Griffiths analyzed, Thanks to the Free Trade Agreement
between Vietnam and the European Union countries EVFTA signed in August 2020,
the cost of renting industrial park land has grown quite steadily. The
planned industrial parks are expected to be the objects to attract foreign
capital in the coming time.
Through the Free Trade Agreement, the cooperation relationship
between the EU countries and Vietnam will be strengthened, promoting the
recovery of the manufacturing industry after the quiet period caused by
Covid-19 . The free trade agreement will also add impetus to the
transition from low-value, labor-intensive and low-skilled industries to
high-value industries. than.
"Industrial real estate will continue to be the darling of
the real estate industry in general, with high demand and increased capital
market activity," said Troy Griffiths.