Industrial rents to rise 5-13% in next 3 years: CBRE
An aerial view of the 500-hectare VSIP I industrial park in Thuan An town, Binh Duong province, southern Vietnam. Photo courtesy of Becamex.
Industrial land leases in northern Vietnam are predicted to climb 5-10% over the next three years, while those in the southern region may rise 8-13%, according to real estate consultancy firm CBRE Vietnam.
The company attributed the rising rents to growing demand thanks to Hanoi's Ring Road 4, Ho Chi Minh City's Ring Road 3, and other expressways.
Average occupancy rates of existing industrial parks in five key northern industrial cities and provinces, including Hanoi, Bac Ninh, Hung Yen, Hai Duong, and Hai Phong, reached 78% in the first half of 2022, down 2% year-on-year. This was due to new industrial parks entering operation in Bac Ninh, CBRE reported.
Meanwhile, occupancy rates in four key southern industrial localities, including HCMC, Dong Nai, Binh Duong and Long An, reached 92%, down 2% year-on-year.
The market recorded many large-scale deals over 10 hectares in logistics, furniture manufacturing, and solar energy over the period, with numerous transactions also occurring in northern second-tier markets like Vinh Phuc, Bac Giang, and Quang Ninh, the report said.
Positive occupancy rates have resulted in higher land rent, with first-tier provinces seeing an average rise of around 5-12% in the north and 8-13% in the south. Warehouse rentals have remained stable due to abundant supply, according to CBRE.
The consultancy expects industrial land supply to expand by more than 14,000 hectares for both markets in the next three years, with second-tier industrial provinces accounting for about 21% in southern and 42% in northern Vietnam.
In particular, new supply in Hanoi will be greater than in HCMC but will terminate earlier, creating more opportunities as well as higher competitive pressure between the first- and second-tier industrial zones. Meanwhile, the southern region's growth momentum is stronger.
Analysts also noted that Vietnam's economic policies and effective vaccination programs have built a solid foundation for international firms to place their faith in the country’s recovery.
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