The Northern Industrial Real Estate market is getting more attractive
In the second quarter of 2023, the industrial real estate market saw an increase in new supply, mainly concentrated in the northern region. Additionally, there is a rising demand for renting industrial workshop spaces in some provinces; the occupancy rate of existing industrial zones nationwide reached 80% in the northern region. This indicates that industrial real estate in this area is still gaining traction…
Information from the Ministry of Construction reveals that the industrial real estate market in the second quarter of 2023 received a boost in new supply, primarily concentrated in the northern region.
Several projects initiated in the first half of 2023 include VSIP 3 Industrial Park with an area of 1,000 hectares (Binh Duong); Vinh Thanh Industrial Park Phase 1 with an area of 293.7 hectares (Can Tho); Song Lo II Industrial Park with 165.65 hectares, SHI IP Tam Duong Industrial Park with 162.33 hectares (Vinh Phuc); Gia Loc Industrial Park, An Phat 1 with an area of 180 hectares, Kim Thanh Industrial Park, Tan Truong Dai An, Phuc Dien expansion with an area of 214.57 hectares (Hai Duong); Hai Long Industrial Park with 296.97 hectares (Thai Binh); Xuan Cau Industrial Park and Non-Tariff Zone with 752 hectares (Hai Phong); Industrial Zone 5 within the Lý Thường Kiệt Industrial and Service Township with 192 hectares (Hung Yen)…
While the supply is increasing, the demand for renting industrial workshop spaces in the second quarter showed a slight decrease compared to the previous period, but the decline is more pronounced in the southern region. In contrast, some northern provinces experienced a slight increase in demand, such as Bac Giang, Bac Ninh, Quang Ninh, Nam Dinh, and Hai Phong, due to contract signings with multiple foreign partners in the early stages of 2023. Additionally, the occupancy rate of existing industrial zones across the country reached 80% in the northern region; the average land rental price in basic industrial zones remained stable throughout the rental cycle.
Before this, Cushman & Wakefield’s industrial real estate market report for the second quarter of 2023 also indicated that due to the maintained advantages in location and investment attraction potential, the northern region continues receiving investment waves in various provinces. Quang Ninh and Hai Duong are leading this trend due to the availability of industrial land and reasonable rental prices.
In reality, the Vietnam Real Estate Brokers Association (Vars) believes that Vietnam is positioned as a potential location for expanding production and stands out as a bright spot in the shift of supply chains and logistics in the Asia-Pacific region.
Currently, a series of “eagles” from the US and South Korea, with substantial FDI inflows, are seeking development opportunities in Vietnam. Specifically, according to Nikkei Asia, Apple’s supply chain partners such as BOE, Quanta, Compal, Goertek, Foxconn, have factories in industrial parks in Bac Ninh, Bac Giang, Vinh Phuc, and now plan to open and expand factories in Bac Ninh, Nam Dinh, Nghe An, Quang Ninh.
Furthermore, a delegation of Korean business representatives accompanying the Korean President also expects to enhance cooperation with Vietnam in supply chains, new technologies, energy, and the environment. Many large corporations have already invested in Vietnam but still have expansion plans, for instance, Samsung intends to increase its investment capital to 20 billion USD; LG is investing an additional 5 billion USD in Vietnam; SK is actively investing in Vietnam through investments in Masan and Vingroup.
According to Vars’ assessment, the market has witnessed the emergence of numerous new industrial parks invested in with a focus on modern automation and “green” criteria aimed at reducing CO2 emissions. This is a crucial factor contributing to the competitiveness and attractiveness of Vietnam’s industrial zones in the FDI race. Therefore, in the near future, these standards are expected to become the top criteria for investors, especially foreign investors.
Furthermore, the multi-story factory model is gaining attention and implementation in the northern region. Bac Ninh is the pioneering province, followed by Hung Yen, in applying this model. The industrial real estate cash flow solution with the multi-story factory model is expected to become an appealing investment channel in the near future.
Source: VnEconomy.vn
