Industrial land prices peaked due to the influx of new FDI when Vietnam reopened, plus the need to expand production of existing businesses.
The price peak fell on the southern market
According to Colliers Vietnam, by the end of the first quarter of 2022, the price of industrial land in the South has increased sharply. With 204 ha of leasable area and the occupancy rate has reached 90%, Tan Thuan Export Processing Zone in District 7 is leading in Ho Chi Minh City in terms of rents with an average of 270 USD/m2/term.
Following Tan Thuan Export Processing Zone are Hiep Phuoc 1 and Hiep Phuoc 2 Industrial Parks in Nha Be District, with an average rental price of 250 USD/m2/term. Currently, the occupancy rate at Hiep Phuoc 1 Industrial Park has reached 100%, the remaining land for lease is in Hiep Phuoc 2 Industrial Park with a leased area of 345 hectares, the new occupancy rate is 35%.
In Colliers Vietnam's "summary table", 17 out of 20 industrial parks in Ho Chi Minh City have the average rental price above the threshold of 120 USD/m2/term and only 3 industrial parks in Northwest Cu Chi, Mechanical - Cars (Hoa Phu) and the Southeast have an average rental price of less than $120, but all three have occupancy rates of at least 82%.
Ho Chi Minh City, Binh Duong and Dong Nai are currently the focal points of price increase of the southern industrial real estate market, despite the significant expansion in supply in the first quarter of 2022, in particular, major new projects The operation mode has helped the supply of industrial land and ready-built factories in this area increase significantly to 26,724 hectares and 3.8 million square meters, respectively.
Obviously, the restoration of international flights to Vietnam has created more heat for the industrial real estate market in recent months. JLL Vietnam said, with a new wave of FDI investment pouring into Vietnam after reopening, along with the need to expand production of existing businesses, the price of industrial land in the South continued to rise and set The new average price peak was $120/m2/term in the first quarter of 2021, up 9% over the same period last year.
A similar situation also happened in the North when the average industrial land price maintained a rapid increase to 109/m2/term in the first quarter, up 9.2% over the same period last year.
The flexible adaptation to the epidemic by businesses and localities has stimulated FDI inflows into real estate, industrial parks and manufacturing. Typically, the VSIP Bac Ninh project increased its investment capital by nearly $941 million and the Goertek Group's manufacturing plant project in Que Vo Industrial Park (Bac Ninh) increased its capital by nearly $306 million.
Need more classy industrial parks
Foreign investment in the processing and manufacturing industry - an important indicator for real estate developers to shape business strategies - has recovered strongly when Vietnam reopens.
The restoration of international routes to Vietnam has created more heat for the industrial real estate market in recent months. Industrial land prices continued to rise and set new peaks.
In the first four months of this year, the total newly registered capital, additional capital and contributed capital of foreign investors in the processing and manufacturing industry reached USD 6.18 billion (of which 40% of capital poured into the processing industry). new projects), an increase of 1 billion USD (equivalent to nearly 20%) over the same period last year. It should be recalled that, due to the influence of then anti-epidemic measures, foreign investment in the processing and manufacturing industry in the first 4 months of 2021 decreased by 13% compared to the same period in 2020 and only reached 5.18 billion USD.
In 2022, the opening of flight routes and the application of vaccine passports to restore the economy, along with efforts to attract investment from localities, the industrial real estate market, especially the North, will be promoted. expected to continue to be the choice of foreign investors.
However, attracting foreign investment after the pandemic and in the context that the "filter" of FDI is upgraded in the direction of scale, technology content and added value, poses challenges for developers. industrial real estate that, whether welcoming "eagles" or "sparrows", it is also necessary to "build a nest" to be decent and modern. Experts note, infrastructure, logistics costs, labor quality ... are still decisive factors to the choice of foreign investors.
“Besides the factors of price and location, the appearance of green development industrial park models and the application of technology in management and operation are predicted to be competitive advantages in attracting investment. future investment", JLL Vietnam analysts assessed.
In addition, according to the trend, the ready-built factory market needs to move to a larger scale to catch the needs of tenants, especially foreign customers who choose to lay the foundation or expand production in Vietnam, but want to save time, costs and quickly go into operation. Due to the increasingly limited industrial land fund, multi-storey ready-built factories are considered as a solution in the near future for investors to help expand space and increase land use efficiency.
