Industrial park real estate is said to have many advantages when the demand for land rental in Vietnam's industrial zones continues to grow positively.
At the same time, simplifying legal procedures and decentralizing more powers to localities can help reduce investment licensing procedures in industrial zones. Analysts say that 2022 will be the year industrial park real estate businesses record high growth in revenue and profit.
Illustration: Danh Lam/VNA
Growth thrust
According to the Ministry of Planning and Investment, by the end of 2021, 397 industrial parks have been established, including 352 industrial parks located outside economic zones, 37 industrial parks located in coastal economic zones, and 8 industrial zones. industrial zones are located in border-gate economic zones, with a total natural land area of about 122.9 thousand hectares.
Of which, 291 industrial parks have been put into operation with a total natural land area of about 87.1 thousand ha, industrial land area of about 58.7 thousand ha and 106 industrial parks in the process of construction. with a total natural land area of about 35.7 thousand ha. The occupancy rate reached about 70.9%, approximately compared to the end of 2020.
In the 6 months of 2022, the Deputy Prime Minister signed the decision to establish 9 new industrial parks with a total area of 2,472 ha, the total investment capital of the projects reached 29,411 billion VND.
The projects also stipulate the construction period from 3 to 4 years from the date of establishment and the operation period from 50 years from the date of establishment.
SSI believes that the supply of these new industrial parks can come into operation by the end of 2023 to 2025. However, SSI also believes that the legal procedures related to the licensing of investment in industrial parks have been approved. simplified, but the progress of compensation and clearance is still quite slow, which may lead to slow progress of the project's operation.
According to SSI, the demand for land rental in Vietnam's industrial parks continues to grow positively when the opening of routes and the application of vaccine passports to revive the economy help contracts be signed MOUs (MoU. ) in the time before completing investment procedures; VND/USD exchange rate is more stable than in countries like Indonesia, Thailand, India, Malaysia; Vietnam's FDI attraction policies such as corporate income tax exemption to 0% in the first 4 years of operation, 50% corporate income tax reduction in the next 5 years; preferential policies on social housing for workers in industrial zones. In addition, industrial park real estate businesses also benefit from the wave of production shifting to Vietnam.
In addition, the Government's Decree 35/2022/ND-CP stipulates the management of industrial parks and economic zones, notably with the removal of procedures for establishing industrial zones to reduce administrative procedures for employees. industrial park developer.
At the same time, decentralize more state management power to the Ministry of Planning and Investment and the Provincial People's Committee in the operation of industrial zones.
SSI believes that simplifying legal procedures and decentralizing more powers to localities can help reduce investment licensing procedures in industrial parks, especially industrial parks will be able to receive investment licenses. investment license as soon as it is approved for investment.
Confident with high growth plan
According to Mirae Asset Securities (Vietnam), 2022 will be the year that businesses in the industrial park real estate industry record high growth in revenue and profit.
This securities company believes that a large ready-to-exploit land fund and high rental prices will help businesses have revenue and profit growth.
Some companies will convert the revenue accounting method from annual amortization over the lease period to one-time accounting, which will help businesses recognize extraordinary revenue and profit in 2022.
The rental price, although continuously increasing in recent years, is still at a low level, so Vietnam's industrial park real estate enterprises have a competitive advantage compared to other countries in the region. Specifically, compared with Indonesia and Thailand - countries with advantages in FDI like Vietnam, the average rent in 2021 is 20-33% lower.
However, not only advantages, Mirae Asset Securities (Vietnam) also pointed out the difficulties that industrial park real estate enterprises in 2022 will face such as land fund development costs increased significantly compared to 2019.
Specifically, in 2022, the cost of compensation and site clearance has increased by 10%-50% compared to 2019, affecting the site clearance progress of businesses. At the same time, a strong increase in supply can create an equilibrium point and cause rents to slow down.
According to a report of the Ministry of Natural Resources and Environment, the industrial park's land area by 2030 is nearly 211,000 hectares, an increase of more than 85,000 hectares compared to 2022 (an average increase of 10,000 hectares per year). The industrial land fund is expected to increase sharply in the period of 2023 and onwards, which may cause rental prices to slow down.
Although there are still difficulties to be faced, it is clear that the opportunities for the industrial park real estate industry are huge. Therefore, most industrial park real estate businesses have set high growth business plans for 2022.
According to SSI, the business plan for 2022 of industrial park enterprises has grown positively with total revenue reaching VND 38,294 billion, up 25% compared to the same period last year and planned profit after tax reaching 12,317 billion, up 537% over the same period in 2021.
Regarding business results in the first quarter of 2022, the total revenue of listed industrial parks reached VND 14,740 billion, up 0.4% over the same period in 2021, but profit after tax reached 3,405 billion dong, down 2.7% over the same period last year.
The first-quarter profit picture of industrial park real estate businesses is quite contrasting. While many businesses make great profits, there are also businesses that make losses.
Businesses with strong growth in profit after tax such as IDICO Corporation - JSC (stock code: IDC) increased by 253%, reaching 283 billion dong. Or Thong Nhat Joint Stock Company (stock code: BAX) has a profit after tax in the first quarter of 2022 reaching VND 48 billion, up 7.2 times over the same period in 2021.
In contrast, Hiep Phuoc Industrial Park Joint Stock Company (stock code: HPI) recorded a loss of 2.6 billion dong due to no new source of revenue when the expansion project of Hiep Phuoc Industrial Park continued to be delayed.
Industrial Development and Investment Corporation - JSC (stock code: BCM) saw a 16.4% decrease in profit after tax over the same period last year when no profit from selling land in Binh Duong new city has been recorded to Capitaland ...
According to Van Giap (VNA)
