Time of Industrial real estate

Time of Industrial real estate

Industrial real estate development will positively impact other markets such as housing, Office for lease

The latest statistics of Savills Vietnam show that many corporations have been relocating factories from China to Vietnam as: Hanwha, Yokowo, Shuafu, Goertek, Foxcom, Lenovo, Nintendo, Sharp, Kyocera, Oasis... These corporations operate mainly in the fields of electronics, textiles, footwear, parts manufacturing.

Many factors attract investors into IPS

According to John Campbell, Senior consultant Savills Vietnam Industrial Services, the main American-Chinese trade tensions; The Free Trade agreements (FTA) that Vietnam participated in has given the opportunity to invest capital, which has a positive impact on the real estate industry in Vietnam. In particular, the comprehensive and progressive agreement of Trans-Pacific Partnership (CPTPP), the Vietnam-EU Free Trade Agreement (EVFTA) will remove 99% of customs duties and goods will increase attraction in the field of industrial PROPERTY.

John Campbell said that the proportion of filling IPS in key provinces grew by the year, the Abundant Land Fund and the typical projects increasing in the contrary also promoted the interest of foreign investors into Vietnam. "Industrial PROPERTY develops positive and direct impacts to other markets such as housing, office for lease... Multinational corporations will bring a huge team of experts, workers to the area where they put factories, office work from which these segments are predicted to thrive in the coming time "-Senior consultant of Savills Viet Male comment.

Meanwhile, CBRE Vietnam leads the value of industrial land between China and Vietnam with a pronounced disparity. Accordingly, the price of industrial land in Vietnam averages more attractive, from 100-140 USD/m2/lease cycles, whereas prices in China to 180 USD/m2/cycle.

JLL Vietnam Company also statistics the rental rates in Vietnam industrial zones have increased direction and fill rate has been helpful. According to JLL, average rent price of the quarter II/2019 increased by 15.8% compared to previous quarter. At 162 USD/m2/lease cycle, HCMC (HM: HCM) continues to be the market for leasing land and the highest factory in the south. Followed by Dong Nai 160 USD/m2/lease cycle. Long An is also very potential, which is considered a new option next to 2 traditional investment areas, Binh Duong and Dong Nai.

According to JLL, due to existing IPS has high fill rate, time to the existing IPS and new IPS to bring to the market will meet the new demands of investors. The five leading industrial markets in the Southern key economic zone have an average fill rate of highs with 81% in the II/2019 quarter. The lead is still HO Chi Minh City, Binh Duong and Dong Nai.

In terms of future prospects, there will be about 18,290 hectares of land that have been oriented for industrial development in the southern region, most of the supply is concentrated mainly in Long An provinces, Binh Duong and Dong Nai.

A corner of high-Tech Park District 9, HCMC. Photo: IMPERIAL DYNASTY

As noted by the reporter, in the context of the booming industrial ESTATE in order to stay ahead of the trend of foreign direct investment capital in Vietnam in the past time, many IPS in HCMC have worked hard to improve , changes to attract business (DN), investors. To improve the efficiency of land use, some IPS have invested in building high-rise factories. As at Tan Thuan KCX (District 7), the investor has constructed 3 blocks of high-rise factories for lease or the Linh Trung KCX is building high-rise factories expected completion by the end of this year.

Another trend is that IPS are moving from traditional models to models "commercial areas, services, high-tech clusters attached to modern urban" to increase competitiveness, attractive attraction with ENTERPRISES, investors. Tan Thuan representative said IPS located near the center are pushing for transformation towards green, sustainable industry; Improving the efficiency of land use, attracting investment in technology to promote economic development...

Mr. Le Hoang Chau, chairman of HO Chi Minh City Real Estate Association, Vietnam Industrial PROPERTY Market Review has many opportunities to develop when the corporations shift from China to Vietnam. However, we do not exceed expectations and illusions about the tremendous benefits that this trend has to offer. By currently Vietnam's competitiveness is lost to Thailand, Indonesia, India...

"Receive and behave with this shift trend so that the best for the market is questionable. In my way, we need to improve the quality of infrastructure, human resources, improve competitiveness from the development of infrastructure and supporting industries to attract industrial PROPERTY. The office will be vibrant; Apartment for rent, household as well as services related to education, recreation, entertainment, shopping... will also be promoted from the development of industrial real ESTATE "-Mr. Le Hoang Chau said.

Also related to development of production premises in the current context, Ms. Lam Hieu Tam, development specialist of the INDUSTRIAL Park-deputy general director of Kizuna Company, said that besides the traditional industrial zone model, which is very difficult to DN and has just reached , industrial zone companies should research the new type model of providing services, upgrading the information technology infrastructure, using renewable energy. IPS can provide small scale built factory and need to be accompanied by customers from the time customers learn to invest in production workshops and throughout the process of production. "This will really be a new step in providing the production ground for small and medium ENTERPRISES, often struggling with the construction of factories in accordance with standard, modern, cost saving"-Mrs. Lâm Dieu tastes commented.

Conscious selection of investors

DR. Historian Ngoc Khuong, real ESTATE finance specialist, said that it is necessary to recognize the fact that foreign investors moving from China to Vietnam are to take advantage of cheap manpower, labor-intensive production industry. While Vietnam should be determined to attract only high-tech ENTERPRISES, the industry can enhance the workmanship team for employees. Currently the price of Vietnam land leasing is cheaper so foreign partners only focus on the model of land use and labor intensive, this greatly affects the infrastructure and the environment in which the following generations will be affected.

"We need to awake the investor selection during this period, which needs to pick which area to attract. Most importantly, the local must consider, put requests to sift investors when the land is delivered to the ENTERPRISES as IPS; Select which land rental unit gives great value to society, for the environment instead of accepting large lease, high price but create more instability, do not bring high value to society "-TS History of Ngoc Khuong analyzed.