Many industrial parks have been filled
According to a report by Cushman & Wakefield, ready-built factory and warehouse rental activities in the South have become more vibrant, with absorption levels 2,4 times and 6,7 times higher, respectively, compared to the previous quarter. This unit also commented that the thirst for factory and warehouse supply will become more and more severe. That is shown by the fact that many industrial parks and warehouses in Hanoi and Ho Chi Minh City are full.
The reason is indicated by the increasingly strong development of trade, with the need for large warehouse rental areas to store many items and install systems to support picking and packaging. At the same time, part of it comes from the trend of shifting part of production from China to Vietnam.
In addition, Vietnam is becoming a destination for many businesses in the manufacturing sector as well as the field of logistics and factories for rent. Many businesses, when investing in the Vietnamese market, choose to rent existing factories instead of building new factories to shorten the time.
Demand for industrial real estate is increasing in all types.
Besides, the need to rent high-rise warehouse/factory space with an area of 1.000 - 5.000m2 is quite popular today. Enterprises that rent factories with areas in this group operating in the light industry need to look for rented premises near residential areas, where their potential customers are concentrated. This demand also promotes the proliferation of high-rise rental factories.
In particular, the increasing demand for industrial real estate also comes from the increasing flow of FDI capital into Vietnam, accompanied by large M&A deals and the shift in production supply chains around the world. .
Statistics from the Ministry of Planning and Investment also show that total foreign investment capital registered in Vietnam by the end of November reached nearly 11 billion USD, up 29% over the same period last year. Of which, investment capital through capital contribution and share purchases reached nearly 14,8 billion USD, an increase of 5,97% over the same period in 46,4.
According to S&P Global, although M&A activities worldwide will slow down in 2023, Vietnam is receiving many advantages from free trade agreements (FTAs), creating a diverse investment base and increasing investment. into manufacturing and industrial real estate.
Industrial real estate rental prices increased sharply
With data showing growing demand, many experts believe that the development of industrial real estate, especially warehouses and factories, will make a breakthrough in the coming period. For that reason, industrial land rental prices are expected to increase by 6-10%/year in both the North and the South in the next 2 years.
According to statistics, there are currently 397 industrial parks established across the country; 292 industrial parks are in operation with a total natural land area of more than 87.100 hectares and an industrial land area of about more than 58.700 hectares. The occupancy rate of industrial parks across the country is about 80%. Of which, the southern region has a rate of 85%, Binh Duong is home to the largest industrial park area in the country with an occupancy rate of 95%.
Assessing the supply of industrial real estate, Cushman & Wakefield commented that in the near future there will be a new supply of industrial land entering the market, expected to be about 2026 hectares by 5.700, mainly from Binh Duong, Dong Nai, Long An and Ba Ria - Vung Tau.
Warehouse real estate will be the type of interest in the coming period.
Currently, the demand for industrial park land is quite high and is forecast to continue to increase, specifically: The average industrial land rental price is recorded at more than 170 USD/m2/rental period, an increase of 1%. quarterly and increased 8,5% year-on-year. Some industrial parks have recorded price increases of 3 to 5% over the same period.
The average ready-built factory rental price remains stable quarterly and annually, reaching 4,7 USD/m2/month. Most projects keep their rental prices unchanged in the context of competitive supply. High-demand rental locations such as Dong Nai and Ba Ria Vuong Tau have the highest year-on-year growth, in the range of 2,4–2,5%.
Meanwhile, rental prices for ready-built warehouses in the southern key economic region continued to be stable in the third quarter but increased 2,2% year-on-year, reaching 4,4 USD/m2/month. Ready-built warehouse investors still keep rental prices stable to attract tenants in a competitive market context.
According to CBRE Vietnam, the average industrial park land rental price in level 1 markets in the South reached 189 USD/m2/remaining term, continuing to increase slightly by 1% compared to the previous quarter and 13% higher than the previous quarter. with the same period last year. The market recorded large transactions from Chinese and Japanese enterprises in a variety of industries such as mechanical, chemical, plastic, rubber, and electronics.
