- News in Vietnam
- 24 October 2022
Land for lease in IPs are much sought-after by foreign investors
Demand for plotted land in industrial parks of foreign investors is rising sharply and estimated to stay long until next year.
Reported by experts in industrial real estate, this market in Hanoi industrial parks will be kept stable with occupancy rate of 92% in Q3/2022 and average rent of around $146/m2/term.
The market of ready-built warehouse in Hai Phong, being significantly advantaged by sea port and its orientation of centralized logistics development, is more thriving than adjacent areas.
Bac Ninh is also one of the dominant locality with its most advanced warehouse source meeting huge demand of big manufacturers like Samsung and Canon.
Additionally, development indexes of industrial real estate of Southern market in Q3/22 are recorded positively with average rent in HCMC of $200/m2/term, rising 6% compared to previous quarter and settled occupancy rate of 91%. However, the market is not expecting any new supplies.
Infrastructure development has been prompting connection and leverage for the adjacent industrial parks, especially the vicinities of HCM city which are currently attractive to foreign investors, said expert.
At the same time, the business zone market in the Mekong Delta is booming as well, showing a significant change in the industrial park rental market across the South in general.
According to experts, development of infrastructure and logistics in Vietnam has prompted the process of mass production and transportation to be eased off and more convenient. Therefore, the demand for industrial park space by foreign investors has massively increased since the second quarter of 2022 and this trend is forecast to continue until the upcoming year.
Regarding the industrial zone real estate market, expert hopes the planning of industrial zones would be in more detail with areas allocated for logistics, commercial, service, R&D and data center functions. Currently, the Government has been striving to improve the progress of investment promotion procedures, and reduce administrative procedures related to investment, giving much less hassled for industrial park investors in developing new projects
Sharp increase in land prices and compensation costs in Vietnam, however, is now posing plenty of challenges for investors who want to build new industrial park or convert land use purpose from agricultural to industrial.