Bright spots in industrial real estate and prospects

Industrial real estate remains a bright spot .

According to Mekong Asean , Ms. Duong Thuy Dung - CEO of CBRE Vietnam - assesses that industrial park real estate will remain a bright spot in the coming period, as Vietnam benefits greatly from the shift in global supply chains.

According to Ms. Dung, industrial land for lease currently has an occupancy rate of almost 100%. In first-tier markets such as Binh Duong, Dong Nai, Long An, Hai Duong, Bac Ninh, Hung Yen, etc., there is almost no land left for lease. Instead, second-tier markets such as Ba Ria Vung Tau, Tay Ninh, Thai Binh , Thai Nguyen, etc., are gradually becoming attractive destinations with abundant land and lower prices.

CBRE expects industrial park rental prices to continue rising in the coming years, at a rate of approximately 5-9% per year in the North and 3-7% in the South.

Furthermore, Ms. Dung believes that the market for factory space for rent will thrive with the improvement of the logistics sector. With high demand, helping foreign investors reduce the time spent searching for land and obtaining permits, this is an attractive product, with occupancy rates reaching up to 80%. Rental prices are also continuously increasing.

Real Estate - Industrial Real Estate: A Bright Spot and Prospects — Industrial real estate remains a bright spot in the coming period, as Vietnam benefits greatly from the shift in global supply chains. (Illustrative image from the internet)

"A new door" for investment funds

According to the Vietnam Financial Times, experts believe that, with advantages from macroeconomic factors and attractiveness across most segments, Vietnam is becoming a promising investment destination for capital and investors, especially offering more opportunities for industrial real estate - a segment that directly benefits from new investment waves.

The strong wave of investment is believed to stem from Vietnam upgrading its partnerships with a number of major economies such as the US, Japan, South Korea, China, and most recently, Australia... With the strong inflow of capital into the economy, industrial parks are seen as "magnets" attracting significant investment.

According to MBS Securities' report on the outlook for industrial real estate businesses, the industrial real estate sector's prospects in the coming period will continue to be driven by stable macroeconomic conditions, along with Vietnam's continued strong attraction of FDI thanks to improved relations with major powers.

MBS also believes that, entering 2024, traditional industrial parks will gradually lose their competitive advantage. Instead, industrial parks focusing on green and sustainable elements will become increasingly attractive to investors, particularly those targeting high-tech projects using clean materials and reducing carbon emissions, which is the current trend. Furthermore, investment capital is tending to shift to the secondary market due to its large supply and low rental prices.

Mr. Thomas Rooney, Senior Manager of Savills Hanoi's Industrial Consulting Department, assessed that Group 2 industrial park markets are showing significant potential for attracting foreign investment. For example, in the Northern key economic region, Bac Ninh stands out for attracting FDI. According to the Bac Ninh Statistics Department, in 2023, new FDI attracted to industrial parks in the province reached US$1.104 billion (exceeding 163.7% compared to 2022). Bac Ninh attracts not only manufacturing and logistics businesses, but also domestic and foreign investors leasing space.

Furthermore, Vinh Phuc is also a noteworthy market. Currently, there is a lot of investment activity taking place quietly there, and more information about foreign investors starting projects this year will be available.

According to Thomas Rooney, land utilization rates in localities south of Hanoi, such as Hung Yen and Ha Nam, are showing positive signs. Competitive land prices are opening "new doors" for investment funds, allowing them to take advantage of attractive profit opportunities early. In addition, abundant labor resources, proximity to major consumer markets, convenient access to seaports, and well-developed transportation infrastructure are also factors reinforcing the attractiveness of this region.

In the near future, Nam Dinh and Thai Binh are projected to be the next Group 2 markets with outstanding development in industrial real estate. These localities, traditionally known for their textile and garment industries, have recently witnessed a new influx of capital into higher-value industrial sectors.

Dao Vu (T/h)

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