According to a newly published market research report on the industrial real estate segment of Savills Vietnam, the performance of the industrial sector in the first five months of 2021 still recorded certain improvements despite the positive results. Social distancing and travel restrictions in the country have made it difficult for investors wishing to lease industrial land.
A representative of Savills said that the growth momentum of industrial real estate benefits positively from M&A deals and new supply of industrial real estate. Regarding M&A activities, the market has witnessed new deals in 2021. Typical deals can be mentioned as Boustead Projects acquiring 49% stake in KTG Bac Ninh Industrial Development Joint Stock Company (in the area. Yen Phong industry) for about 6.9 million USD. ESR Cayman Limited and BW Industrial Development Joint Stock Company (BW) cooperate to establish a new joint venture with the goal of owning and jointly developing 240,000 m2 in My Phuoc 4 Industrial Park near Ho Chi Minh City.
The Vietnam Real Estate Brokers Association also said that in the first quarter of 2021, Vietnam will continue to be an attractive destination, attracting international investors and manufacturers. Therefore, the development prospect of industrial zones (IZs) in Vietnam remains good. Currently, most of the provinces and cities that are capable of industrial development have a very active phenomenon of proposing to develop new industrial zones. Regarding new supply, as of the first quarter of 2021, statistics from the Ministry of Planning and Investment show that there are 370 industrial zones established in the whole country with a total natural land area of about 115,200 hectares. These IPs are estimated to have provided about 3.6 million new jobs in both the North and the South. In the first quarter of 2021, dozens of industrial projects in 13 provinces and cities were approved, promising to provide thousands of hectares of new industrial area.
The average asking price of industrial land by specific area is as follows, in the North, the average asking price of industrial land is about 1.8 million VND/m2/lease period. In the Central region about 768 thousand VND/m2/lease cycle and in the South about 1.7 million VND/m2/lease period. The operation of warehouses and ready-built factories remained stable year-on-year due to the large supply put into operation in 2019 and 2020.The average asking price for factory rental in industrial parks is about 60,000-80,000. VND/m2/month.
John Campbell, Head of Industrial Real Estate at Savills Vietnam, said that the sudden increase in demand for land, factories and warehouses caused rents in industrial parks near major cities to escalate. Rising prices remain a concern for low-value and low-margin manufacturing industries such as textiles and furniture. The current foreign exchange rate remains at an acceptable level for high-value multinational manufacturers operating in the fields of technology, high-tech support and automated machinery.
Source: Laodong.vn