Despite the ongoing difficulties in the overall market, the industrial real estate sector continues to thrive, with businesses leasing factory space and warehouses recording positive business results.
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| Industrial real estate continues to grow strongly. Pictured: ILD Coffee Vietnam factory, a joint development between LDC and Instanta. |
Impressive growth
The stock market witnessed a spectacular surge in industrial real estate stocks. Notable stocks on the Ho Chi Minh City Stock Exchange (HoSE) recorded impressive growth, including SIP, KBC, SZC, BCM, and IDC. SIP and KBC showed exceptional strength with trading volumes soaring by over 300%, driving up share prices by approximately 10%. SZC, BCM, and IDC also performed strongly, with liquidity increasing by 90-140%.
Businesses in this sector are experiencing favorable business results in the third quarter of 2024. For example, Saigon VRG Investment Joint Stock Company (stock code SIP) saw a 16% increase in revenue and a 56% increase in profit. This result was contributed by the provision of services, dividends received, and profits from the sale of investments.
Saigon VRG Investment Joint Stock Company operates four industrial parks: Phuoc Dong, Dong Nam, Le Minh Xuan 3, and Loc An - Binh Son, with a total area of over 3,200 hectares. Of this, more than 1,000 hectares of commercial land remain unleased, distributed across Tay Ninh, Dong Nai , and Ho Chi Minh City.
The industrial real estate market in Vietnam is considered to be more vibrant and promising than ever, receiving many positive signals.
Kinh Bac Urban Development Corporation (KBC) also made a strong impression with its Q3/2024 financial report. Kinh Bac's net profit reached over 196 billion VND, a 41.7-fold increase compared to the same period last year. The main contributor to this result was revenue from industrial park operations, which reached over 580 billion VND.
With abundant land reserves in the expanded Quang Chau, Tan Phu Trung, and Nam Son Hap Linh industrial zones, Kinh Bac Urban Development Corporation is projected to continue generating huge profits from land leasing activities. According to Vietcombank Securities Company (VCBS), Kinh Bac's current land holdings could bring in nearly 7,000 billion VND from leasing revenue.
Similarly, IDICO Corporation – JSC (IDC) recorded net revenue of VND 2,276 billion, a 58% increase compared to the same period last year. Notably, IDICO's after-tax profit reached VND 574 billion, an impressive 195% increase. According to the company's explanation, this positive business result stems from the recognition of one-time revenue from industrial park infrastructure lease contracts.
Following the general trend, Hoa Phat Group Joint Stock Company (HPG) also recorded strong growth in the industrial real estate sector. Specifically, revenue from the sale and lease of real estate in the third quarter of 2024 reached VND 730 billion, a significant increase compared to VND 30.6 billion in the same period of 2023. This boost came from Hoa Phat leasing 70 hectares of land in the expanded Pho Noi A Industrial Park.
The race to acquire land
The industrial real estate market in Vietnam is considered to be more vibrant and promising than ever, receiving many positive signals.
A recent report by Savills Vietnam shows that Vietnam's industrial and digital sectors are thriving, supported by strong FDI inflows, large-scale infrastructure projects, and a favorable legal environment. The country's shift towards high value-added manufacturing, coupled with expanding logistics and data center capabilities, is boosting Vietnam's position in the global supply chain.
With competitive costs, a strategic location, and numerous trade agreements, Vietnam is well-positioned to capture this new wave of investment. As the country increasingly integrates into global markets, Vietnam will play a key role in the future of Southeast Asia's industrial sector, becoming an ideal destination for advanced industrial and logistics solutions.
“Vietnam’s strong FDI inflows, strategic location, competitive costs, e-commerce growth, open trade policies, and role in the global supply chain are essential for the long-term supply and performance of the industrial real estate segment. Notably, with the development of e-commerce and increased FDI, the demand for warehouses and ready-built industrial space has surged,” said John Campbell, Director and Head of Industrial Real Estate (Savills Vietnam).
Based on current momentum, experts predict that industrial real estate will continue to carry the overall market, leading the recovery. Consequently, money will once again flow strongly into the coffers of major players like Kinh Bac, Viglacera, Becamex, and IDICO…
In addition, the potential of industrial real estate is attracting a number of major players to join the race. For example, in its upcoming strategy, TTC Land will expand its industrial and logistics real estate segment in the Southern market. Similarly, Taseco Land has also recently paid special attention to the industrial park real estate sector.
Recently, DIC Holdings, a member of DIC Corp, collaborated with Van Thuong Industrial Park Infrastructure Development Co., Ltd. to be given priority as the general contractor for the infrastructure construction of a 400-hectare project in Phu My town (Ba Ria - Vung Tau).
Other prominent names such as Ha Do, Vinaconex, Becamex, Viglacera… are also showing great ambition in the race to acquire land. A representative of Phat Dat Real Estate Development Joint Stock Company said that the company plans to return to the industrial real estate market.
Given the dynamic developments in the market, Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, predicts that the race for industrial real estate will continue to heat up in 2025, as this is currently the "star" segment of the market.
Source: https://baodautu.vn/batdongsan/bat-dong-san-cong-nghiep-thang-lon-d230449.html
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