Investors seek industrial land near Hanoi, HCMC

By An Le
Wed, April 27, 2022 | 11:30 pm GMT+7

Land scarcity and surging real estate prices in Hanoi and Ho Chi Minh City have pushed investors to seek industrial land in satellite areas, according to Colliers Vietnam.

VSIP Bac Ninh Industrial Park in Bac Ninh province, northern Vietnam. Photo courtesy of VSIP Joint Venture Co.

VSIP Bac Ninh Industrial Park in Bac Ninh province, northern Vietnam. Photo courtesy of VSIP Joint Venture Co.

HCMC's industrial real estate market received no new supply in Q1/2022. However, it remained stable with the occupancy rate reaching 90% and average rent at $190 per square meter, according to a report by the real estate services company.

The report said that the city would have five new industrial parks providing 4,200 hectares this year, giving no specific timelines.

Though the demand for industrial land has constantly increased, investors have to move to neighboring provinces like Binh Duong, Dong Nai, and Long An due to limited supply.

These satellite provinces have risen strongly over the past five years with long-term potential in attracting major companies like Nam Long, Vingroup, and Novaland.

Deputy Prime Minister Le Van Thanh recently approved the 400-hectare Prodezi Industrial Park infrastructure project in Long An. Prodezi Long An JSC, the investor, plans to pour VND4,604 billion (over $200 million) into the project.

Dai Loc Long An JSC last week started construction of the 308-hectare Nam Thuan Industrial Park in Duc Hoa district of Long An, with a total investment of VND5,300 billion ($231 million).

VSIP Joint Venture Co. a partnership between Binh Duong-based Becamex IDC Corp. and a coalition of Singaporean companies, in March started work on the 1,000-hectare Vietnam - Singapore Industrial Park (VSIP) III, the third such a VSIP project in Binh Duong and the 11th in Vietnam.

Binh Duong authorities also plan to build the 1,000-hectare Cay Truong Industrial Park this year, expand Nam Tan Uyen Industrial Park and Rach Corn Industrial Park.

Binh Duong recently saw Capitaland’s $242 million acquisition of an 18.9 hectare site and Gamuda Land’s $54 million acquisition of a 5.6 hectare site. The deals are expected to attract more foreign experts and enterprises to come to the industrial province in future.

In the north, Hanoi remains the most promising market for investors to set up factories or warehouses, according to Colliers Vietnam.

Despite no new supply in the first quarter due to social distancing in Q4/2021, the capital city remained the leading industrial real estate market in the north, with a stable occupancy rate of 90% and average rent of $142 per square meter, the report noted.

Like the south, adjacent provinces like Bac Ninh, Hai Duong, and Hai Phong have also attracted investors seeking available industrial land.

Hai Phong authorities planned to build an additional 15 industrial parks with a total area of 6,200 hectares during the 2021-2025 period. Meanwhile, Hai Duong planned to construct six industrial parks this year with a total area of 1,097 hectares. Of this, 754 are set for leasing.

According to Colliers analysts, as international flights resume, the industrial real estate market in Greater Hanoi and Greater HCMC will become more vibrant, and land rents may increase by at least 10% on average by the end of the year.

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