Industrial real estate market changes
According to the Vietnam real estate market research report for the first quarter of 2024 by Avison Young Vietnam, rental demand is high but supply in the three main industrial centers of Ho Chi Minh City, Da Nang and Hanoi is not enough to meet the demand, new industrial parks (IPs) are increasingly developing towards neighboring provinces and cities.
New industrial zones are increasingly developing towards neighboring provinces and cities.
At the same time, the industrial real estate market is changing, many plans to convert traditional industrial parks into modern and environmentally friendly industrial park models are being implemented.
In the North, the rental price of infrastructure in industrial parks in Hanoi is at 214 USD/m2/term, up 1% compared to the previous quarter, gradually decreasing in areas far from the capital, ranging from 120 to 165 USD/m2/term in Bac Ninh, Bac Giang, Hung Yen and Vinh Phuc provinces. Some localities such as Hai Phong, Quang Ninh, Thai Binh and Ha Nam have the potential to become the next industrial hotspots, with rental prices ranging from 90 to 120 USD/m2/term by the end of the first quarter of 2024.
Meanwhile, in Da Nang , rental prices remained unchanged compared to the previous quarter at USD 95/m2/term and no new supply was recorded in the first quarter. Four out of five existing industrial parks in Da Nang are almost fully leased.
As a key industrial region of the country, the Southeast region has 100 industrial parks and export processing zones (EPZs) with the highest total industrial land area in use in the country as of the first quarter of 2024. In addition to stable supply, the average rental price in Ho Chi Minh City remained unchanged compared to the previous quarter, at 230 USD/m2/term.
In Dong Nai and Binh Duong, the average rental price in the first quarter reached 170-175 USD/m2/term, stable compared to the end of last year. Long An and Ba Ria - Vung Tau provinces are expected to become the next destinations for industrial real estate investment thanks to reasonable rental prices at 100-110 USD/m2/term.
"Manufacturing activity in Vietnam has picked up in the first three months of 2024, improving confidence in the outlook for the coming year and manufacturers are now stepping up recruitment. Foreign direct investment continues to be pumped into the manufacturing and real estate sectors in Vietnam, bringing long-term positive potential for the industrial real estate segment. Competition to attract FDI among provinces is expected to be higher in the coming time," said Mr. David Jackson, General Director of Avison Young Vietnam.
Green certified offices on the rise
Avison Young Vietnam also pointed out that new office supply in key markets in Vietnam grew insignificantly in the first 3 months of the year. However, changes in rental prices, office occupancy rates, and the increase in the number of green-certified office buildings reflect the ongoing transformation in the office sector in Vietnam.
In Ho Chi Minh City, the supply of Grade A offices will increase sharply from the second half of 2023, with about 150,000 square meters of green office space, helping to meet the demand for high-end office space of large enterprises, which has been in short supply for a long time. Rental prices and occupancy rates remain stable at 50.7 USD/m2/month and 89%, respectively.
The Hanoi office market reflects a different picture. In the first 3 months of 2024, there was competition in rental prices between new and existing office buildings, especially in central districts. New projects offered competitive rental packages and flexible contract terms to attract new tenants. Meanwhile, existing buildings adjusted rental prices and policies to retain tenants. This competition caused Grade A office rental prices in Hanoi to decrease slightly by 2% in the first quarter of 2024 compared to the same period last year.
Ms. Nhung Vu, Director, Office Services at Avison Young Vietnam, said that the developments in the office market in Ho Chi Minh City and Hanoi in the first quarter of 2024 signaled a shift in the balance of advantages, with tenants having the advantage in negotiating in the short term. “However, rents are expected to continue to increase in the medium and long term, so tenants need to have a long-term strategy for their workplace, whether it is renting new, relocating, expanding offices, or even investing in their own buildings,” the expert advised.
Source: https://www.congluan.vn/fdi-tiep-tuc-tang-bat-dong-san-cong-nghiep-khoi-sac-post291780.html
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