Industrial real estate will flourish in 2024

Over the years, the industrial real estate segment has seen steady growth in demand for purchase and rental. In 2024, the industrial real estate segment will continue to record positive signals.

According to the Vietnam Association of Realtors (VARS), industrial real estate will continue to maintain its top position throughout 2023 as Vietnam continues to be a new production and business base for technology enterprises, especially in the high-tech sector.

In 2023, the country will have 7 more industrial parks (IPs) in operation and 13 IPs under construction. Many big “eagles” come from Hong Kong and Taiwan (China).

According to VARS, industrial real estate rental prices increased by about 20% compared to the previous period, with the Northern region witnessing the strongest price increase. The average rental price in this area is 135 USD/m2/rental cycle, an increase of 33% compared to 2022.

In the South, the average rental price is 188 USD/m2/rental cycle, an increase of 15% compared to 2022.

Similarly, PropertyGuru's report also pointed out that two products recorded good absorption in 2023 were warehouses and factories for rent with an occupancy rate of more than 80% and industrial land for rent with absorption of over 90%.

Commenting on the development of this segment in 2024, Mr. Nguyen Van Dinh - Chairman of VARS predicted that the industrial real estate segment will continue to flourish in 2024.

In 2024, industrial real estate will continue to flourish. (Photo: Finance Magazine).

In the next 10 years, Vietnam plans to increase the land area for industrial parks by 115,000 hectares, with about 558 industrial parks nationwide, nearly 1.5 times the current number. Many new industrial park investment projects have been approved for investment and are starting to implement the next phases.

Industrial real estate supply is witnessing growth in both the North and the South. Demand for industrial real estate is still very large, especially the demand for multi-purpose multi-storey warehouses and ready-built factories.

“ Notably, Vietnam will continue to be a country chosen by many foreign investors. Investors from Singapore, China, Korea, the US... will be potential customers of Vietnam's industrial real estate. This will help FDI capital in industrial parks and economic zones continue to maintain an increasing trend. It is expected that in 2024, FDI capital in industrial parks and economic zones will account for about 45% of the total registered FDI capital increase of the whole country,” said Mr. Dinh.

Sharing the same view, Associate Professor Dr. Dinh Trong Thinh (Academy of Finance) commented that although the real estate market has faced many difficulties recently, the industrial real estate segment is still growing sustainably.

Mr. Thinh analyzed that due to the growth of Vietnam's economy, attracting domestic and foreign investors to invest; the country's political and social stability, the improvement of the investment environment, and Vietnam's policies towards foreign investment are increasingly suitable...

In addition, Vietnam has focused on investing in new infrastructure and industrial park real estate. Over the years, Vietnam has invested in and put into use thousands of kilometers of inter-regional highways, helping to promote convenient economic and cultural exchanges between regions in the country.

“ We need to have clean land to meet the demand, and at the same time have a master plan for the whole country, each locality, each sector to come up with appropriate priority policies. This plan also needs to have a vision and be stable over a long period of time so that businesses can confidently develop, ” said Mr. Thinh.

According to Ms. Pham Thi Mien - Deputy Head of Market Research and Investment Promotion Consulting Department, VARS, in 2024, industrial real estate is still considered a good growth segment. This segment continues to be a new production and business fulcrum for technology enterprises, especially in the high-tech sector.

In addition, FDI capital flows remain positive with the advantage of preferential tax policies. Transport infrastructure is increasingly synchronized and modernized with a commitment to invest in infrastructure that is among the top in the region. Industrial park support services are increasingly improved.

Many new industrial park investment projects have been approved in principle and are starting to implement the next phases. The supply of industrial park real estate is witnessing growth in both the North and the South. The demand for industrial real estate is still very large…

In addition, the planning of many provinces and cities for the period 2021 - 2030 has been approved, which will partly resolve the problems related to legal procedures for industrial parks. These factors will help industrial park real estate in 2024 continue to maintain its position and continue to grow.

Chau Anh

Source