- News in Vietnam
- 19 November 2021
The price of industrial land on the southern coast increased sharply
Ba Ria – Vung Tau has an industrial land rental price of 94 USD per square meter, an increase of 45% year on year – the highest increase in the Southeast region.
Report of the first nine months of the year, the southern industrial real estate market of Savills said that the south of economic region had an average growth rate of 10.5% in industrial land rent over the same period, of which Ba Ria – Vung Tau emerged as the only locality with a sudden increase in rents.
Specifically, currently, the industrial land rental price in Ba Ria – Vung Tau has reached the threshold of 94 USD per square meter. This rent has increased by 45% in the past 12 months, which is more than four times higher than the rental growth rate of other industrial metropolis of the South.
Ho Chi Minh City has an industrial land rent of $161 per square meter, up 9% year-on-year. Long An has an industrial land rental price of 138 USD per square meter, increasing 12% over the same period. Binh Duong and Dong Nai have industrial land rental prices of 108 and 104 USD per square meter, respectively, a 1-6% increase in rents compared to last year.
Regarding occupancy rate, industrial parks in Ho Chi Minh City are saturated, reaching the highest (100%) while Ba Ria – Vung Tau, Long An, Binh Duong, Dong Nai have tenant coverage in industrial parks 80-95%. Therefore, new tenants will move to neighbor industrial capitals to expand production with more vacant industrial land than Ho Chi Minh City.
The rent of ready-built factories and warehouses in the Southern economic region is 4.7 USD per m2, up 6.8% over the same period. The supply is mainly concentrated in Dong Nai, Binh Duong, and Long An. Particularly, Ho Chi Minh City has the highest ready-built factory rental price in the Southeast region, reaching 5.4 USD per m2, followed by Long An, reaching 5.1 USD per m2.
Mr. John Campbell, Head of Industrial Real Estate Services Savills Vietnam, assessed that the Government’s reopening plan after social distancing strengthens confidence for businesses and investors, especially the group of customers who rent land and industrial factories for production. Next, the gradual reopening of international routes also promises that the industrial development of the last quarter of 2021 to the beginning of 2022 will be more prosperous by catching up with the wave of foreign investment.
Mr. John Campbell analyzed that industrial capitals in Vietnam have begun to recognize the use of emerging technologies such as artificial intelligence (AI), 3D printing, robotics, etc., to upgrade production capacity. In the post-lockdown period, industrial production will soon recover. “The opportunity to accelerate industrial real estate is still huge shortly,” said Mr. John Campbell.