Rising land prices in northern Vietnam pose concern to investors: Savills
A substantial increase in land prices in Vietnam’s Northern Economic Zone (NEZ) could unnerve investors who seek to set up manufacturing facitiies here, real estate services firm Savills Vietnam said in its latest note.
Land prices remain a key advantage for the NEZ over the Southern Economic Zone (SEZ) and are a vital factor for attracting electronics and automotive players and the new wave of solar manufacturing projects looking for large land banks, noted John Campbell, associate director, head of industrial services at Savills Vietnam.

John Campbell, associate director, head of industrial services at Savills Vietnam. Photo courtesy of the company.
High land prices
According to Savills Vietnam’s Industrial Real Estate Market Report 2023, in the first half of 2023, the NEZ had 68 industrial parks spanning 12,000 ha with occupancy averaging 83%. Land prices reached $138/square meter/one-off term, up from $102 in the same period in 2022, representing an increase of 35.3%.
Bac Ninh province had the strongest land price increase, rising by 48% year-on-year to $156/sqm/one-off term given the rekindled interest of electronics companies and suppliers looking to diversify their supply chains beyond China.
Hung Yen province recorded a 45% year-on-year increase to $132/sq.m/one-off term. It was followed by Hai Duong with a rise of 33% to $101, and Hai Phong with a 28% increase to $129.
Savills's report shows stock of ready-built factories and warehouses in the NEZ reached 3.5 million sqm (net lettable area or NLA), with about 618,000 sqm of vacant NLA. Rent averaged $4.8/sqm/month (excluding VAT) in H1/2023 with occupancy of 83%, decreasing year-on-year with new supply in Hai Phong city and Bac Ninh.
The NEZ receives a steady influx of FDI given its advantageous location and capacity to attract investments. Vietnam's industrial real estate is moving up the value chain with investment projects in high-value sectors.
Attractiveness of NEZ
In H1/2023, northern Vietnam attracted the greatest manufacturing FDI at $3.4 billion, equal to a 63% share of newly registered manufacturing FDI with 238 new projects, data compiled by Savills Vietnam showed.
Bac Giang province had a 20% share or $1.06 billion with notable investments from Fulian Precision Technology (Singapore) at $621 million and LONGi Green Energy Technology at $140 million. Bac Ninh province had the third highest manufacturing FDI nationwide with a 9% share valued at $486 million.

Van Trung IP in Bac Giang province, northern Vietnam. Photo courtesy of Lao Dong (Labor) newspaper.
In terms of industries, in H1/2023, electrical equipment had the greatest newly registered manufacturing FDI with a 21% share valued at $1.14 billion. Computers, electromagnetic, and electrical products had a 20% share of the investment capital, followed by rubber and plastics with 15%.
In the NEZ, computers, electronics, and electrical products attracted the most newly registered FDI with a 19% share of the region's total investment capital. The runners-up were electrical equipment with a 15% share; rubber and plastic products with a 5% share; and motor vehicles with a 4% share.
In the SEZ, rubber and plastic products had the greatest manufacturing investment with a 10% share; metal components had a 4% share, and beverages had a 3% share.
Solar-related manufacturers are moving North, comprising three of the top five manufacturing projects in the NEZ in 2022. The NEZ is home to 77% of the 30 manufacturers of solar energy products, while the SEZ has a 23% share.
Trina Solar has the most substantial investment with a $275-million project in Yen Binh Industrial Park, Thai Nguyen province. Investors are largely from Hong Kong, mainlanf China, and Singapore, however, American solar module manufacturer Thornava Solar commenced manufacturing in H1/2023 at a modern facility in Que Vo Industrial Park, Bac Ninh province with an annual capacity of 1 gigawatt.
In 2023, AD Green, a private Vietnamese enterprise, commenced operations at a $45-million facility with a 3-gigawatt solar panel production space, catering to domestic and international clients.
The NEZ is home to tenants in high-value-added sectors, such as automotive, machinery and equipment, and electronics and computers. Leading corporations include Samsung, LG Electronics, Foxconn, Canon, Hyundai, Honda, and VinFast. Meanwhile, primary tenants in the SEZ are diverse in sectors like rubber and plastic, food and beverages, construction materials, and garments.
“The NEZ is a strategic location with good access for local and international markets. Infrastructure has also drastically improved over the last five years with quality constructed highways to three major ports, including Hai Phong Port, Lach Huyen Deep Water Port, and Cai Lan Port,” noted Thomas Rooney, senior manager of industrial consulting services, Savills Hanoi.
“There have been a number of large-scale projects from automotive to electronics and solar products that have required large land banks for their high value-added production. The NEZ is seen as a major advantage for investors, not only looking to capitalize on one of Vietnams key import and export routes via Hai Phong, but also the access via land through to other markets.”
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