Industrial real estate investment climbs in early 2023

Industrial real estate investments in Vietnam have risen in early 2023, with Vietnam-Singapore Industrial Parks (VSIP) a prime example.

The construction of VSIP Can Tho, also known as Vinh Thanh Industrial Park, the first VSIP industrial park in Vietnam’s Mekong Delta, is set to begin in mid-June, Can Tho Chairman Tran Viet Truong said last Friday.

VSIP Group - a joint venture between Singapore's Sembcorp Development and Vietnam's Becamex IDC - has built 12 IPs across the country to date.

The 293.7-hectare facility, with an investment of $160 million, is located in Vinh Trinh commune, Vinh Thanh district. Can Tho is building two roads leading to the industrial park.

Sembcorp announced last Friday new collaborations in sustainable urban development in Vietnam by building five more VSIPs, worth $1 billion.

The Vietnamese government on the same day presented Sembcorp and Becamex with an investment license to develop the 500-hectare VSIP II in Nghe An province. The license is an expansion of the successful 750-hectare VSIP Nghe An I established in 2015.

VSIP plans to build a third IP in the southern province of Binh Duong as a zero-emissions facility, the first of its kind in the country, CEO Kelvin Teo of Sembcorp Industries confirmed while meeting Binh Duong Chairman Vo Van Minh in January.

With a total investment of $280 million, the 1,000 hectare IP will be located in Bac Tan Uyen district, about an hour’s drive from Ho Chi Minh City. A road leading to VSIP III is being expanded to six lanes.

In January, Hai Phong kicked off construction of a VND1,066 billion ($45.42 million) road linking its central administrative political area to urban areas and economic sites, including VSIP Hai Phong.

The project to extend the Do Muoi road in the northern coastal city is being funded by the municipal budget and is set for completion in 2024. Construction of the $1 billion VSIP Hai Phong kicked off in 2010. It features 500 hectares of industrial facilities and 1,000 hectares for residences and services.

In the same month, the northern province of Bac Ninh approved the handover of 91 hectares of land to Trung Quy-Bac Ninh Investment JSC to build the 300-hectare Thuan Thuan III Industrial Park's Section B.

In the neighboring province of Bac Giang, FECON Hiep Hoa Joint Stock Company has been selected to develop the Danh Thang-Doan Bai Industrial Cluster on an area of 75 hectares in Danh Thang and Doan Bai communes, Hiep Hoa district.

The firm plans to start constructing the VND1 trillion ($42.42 million) facility later this year and initiate operations in the third quarter of 2024.

Four industrial parks in the northern province of Ha Nam have been added to the national plan for industrial park development under a decision signed by Deputy Prime Minister Le Minh Khai last week.

The four are the 250-hectare Dong Van V, 250-hectare Dong Van VI, 230-hectare Kim Bang I, and 210-hectare Chau Giang I in Duy Tien township and Kim Bang district.

Industrial real estate in Vietnam will continue to attract foreign investors thanks to its affordability, Colliers Vietnam said in its latest report for the fourth quarter of 2022. The sector is expected to post significant growth in 2023 thanks to supporting industries such as car manufacturing, electronic components, and e-commerce, along with state investment policies in key economic regions, according to the property consultant.

"The next challenges lie in how to attract and retain more high-quality investment capital, and an example is the puzzle of transforming the current industrial park model into a more sustainable one in the years to come," said Chi Vu, senior manager, Industrial Services, Colliers Vietnam.