Despite challenges, Vietnam is still a destination for industrial park real estate investors
According to information from the "White Paper on Industrial Real Estate 2020" by Savills Vietnam, thanks to the stable growth rate, the export-oriented economy, the increase of free trade agreements (FTAs) and the force With a young workforce, preferential investment policies and strategic geographical location, despite a challenging year in 2021, Vietnam continues to be an attractive destination for public real estate investors.
Picture: Internet
GET A LOT OF FOREIGN INVESTMENT
Currently, according to statistics, 394 industrial parks have been established in Vietnam with a total area of approximately 122,000 hectares. Of which, 286 industrial parks are in operation and 108 industrial parks are under construction or in the process of site clearance. The rapid development of industrial zones, according to Savills, is partly due to recent times, the industrial real estate market in both the North and the South has received a lot of investment capital from China and Singapore.. Projects in the field of production and processing such as: textiles, garments, electrical equipment, electronic components.
In which, there are 4 projects by investors from China, with a total value of up to 300 million USD. Chinese investors mainly invest in industrial parks in Hai Phong, Bac Giang... accounting for 20% of projects. Hong Kong investors invested in 8 projects with a total investment capital of nearly 700 million USD. Industrial park projects receiving investment are Hai Ha (Quang Ninh), Van Trung (Bac Giang), An Duong (Hai Phong)...
There are also Taiwanese (Chinese) investors investing in two northern industrial parks with a total capital of about $380 million, and Singaporean investors investing in two projects with a total capital of $90 million. Transactions are from Japanese and Thai investors with Binh Minh industrial park (Vinh Long) and Korean investors with a project in Dong Van 4 industrial park (Ha Nam), with a total investment of 20 million dollars.
According to Savills, in the coming time, there will be 6 new industrial real estate projects in provinces and cities such as Hai Phong, Bac Ninh, Long An... with a supply area of up to 3,733 hectares. The Department of Economic Zones Management has approved the master plan map for 561 industrial park projects coming here with an area of over 201,000 hectares.
However, industry 4.0 is attracting the attention of global countries and Vietnam is no exception. By raising the value chain, competitors begin to upgrade their production capacity. Using emerging technologies such as artificial intelligence (AI), 3D printing, automation.
With such a trend, it is not only about building factories like before, but also ecological industrial parks. Currently, the Ministry of Planning and Investment and Unido have developed a plan to create more such industrial zones to promote clean and low-carbon technology to help reduce greenhouse gas emissions and water pollutants. Currently, 5 industrial parks selected as pilot projects will be evaluated for performance after 3 years of implementation. For example, DEEP C Hai Phong 1 industrial park is the only European-managed industrial park in Vietnam.
READY TO PROTECT INVESTORS
In order to become an attractive destination, the report also emphasizes the first factor that is the message from the Government that is always ready to protect foreign investors with FDI in Vietnam, in the context that the The Covid-19 pandemic is developing complicatedly, affecting all aspects of the country's economy, especially in the 2nd and 3rd quarters of 2021.
In the current context, the epidemic is not only a "challenge" for Vietnam but also a "challenge" for the whole world. because "Zero Covid" is a perfect fit. This has created favorable conditions for Vietnamese real estate in general and industrial real estate in particular.
In the recently released regional economic overview report, ADB predicts that Vietnam's GDP is likely to grow by 3.5% in 2021 and 6.5% in 2022. the region continues despite the pandemic. The salary of manufacturing workers will increase from 252 USD/month in 2018 to 315 USD/month in 2021. This is quite competitive salary compared to China and Malaysia.
In terms of supply, Vietnam has 394 established industrial parks, which is quite a large number compared to most other countries in Asia - one of the internal conditions to attract more investment flows. from abroad. In particular, according to Arcadis 2020, currently the most cost-effective market for industrial construction is Ho Chi Minh City, with the average basic construction cost from 309-389 USD/m2. Particularly for the factory operated by the investor, this cost is from 349-460 USD/m2.
Besides, in Vietnam, the restructuring of industrial zones is also being carried out. According to the National Assembly's Finance and Budget Committee, Vietnam's industrial park models are outdated, and industrial parks of hundreds of hectares are no longer suitable. In order to catch up with the investment wave and create favorable conditions for investors, new industrial parks have also appeared with updated planning models. Clustering of industrial zones will help advance the value chain and benefit specific industries.
To continue to attract investors to Vietnam, Savill recommends that Vietnam continue to improve the legal framework for industrial park development. At the same time, Vietnam needs to increase the supply of qualified labor and invest more in education, information technology, science... to gradually shift to high value-added industries.
