Industrial real estate price continually rise due to strong demand

The latest market overview report for the first 9 months of 2019 of JLL Vietnam Consulting Company said that the average rent in the Northern industrial parks reached 95 USD/m2/lease cycle, increasing 6.7% compared to With the same period last year and the price trend will continue to increase, there is no sign of cooling down due to strong demand from investors.

Industrial zones in the Northern provinces continue to attract foreign investors

The Northern key economic region is still an attractive destination for production activities. By the third quarter of 2019, the average occupancy rate in all industrial parks operating in the five most dynamic provinces and cities in the region (Hanoi, Hai Phong, Bac Ninh, Hung Yen and Hai Duong) reached 69%, increasing 200% compared to the first quarter of 2019. In particular, the highest rate belongs to Hanoi and Hung Yen.

According to JLL, the large amount of increasing demand now coming from manufacturers who want to leave China are businesses heavily affected by the protracted trade war and businesses with diverse needs chemical production catalog.

Among countries and territories investing heavily in the industrial real estate market in Vietnam, China, Korea, Japan and Singapore have emerged. The Northern key economic zone is an attractive destination thanks to its strategic location and synchronous infrastructure.

By the end of the third quarter of 2019, the total area of industrial land for lease in the North reached 9,371 hectares and the new supply continued to increase. Bac Ninh and Hai Phong are the two leading industrial markets in this area which still have vacant land to welcome investors.

"The average rent in the market reached 95 USD/m2/lease cycle, increasing 6.7% over the year and is at the fastest growing period in the price cycle", JLL acknowledged.

Besides Hanoi, which is the economic center with the highest price, Bac Ninh and Hai Phong still have market leading rents thanks to strong industrial base and large existing tenant list. The average monthly rent for the factory ranges from 4-5 USD/m2/month in the North.

In Nam Dinh Vu Industrial Zone (Hai Phong), Mr. Vu Cong Tru, Director of Strategy and Marketing at Sao Do Group, said that Nam Dinh Vu Port has attracted 19 foreign investors, including Investors from Korea, Japan, Taiwan (China)...

According to Mr. Head, up to the present time, Nam Dinh Vu's turnover reached 138 million USD. The company is promoting marketing activities, promoting investment attraction to continue attracting FDI inflows with foreign investors coming to Nam Dinh Vu port with the expectation that sales can reach USD 500 million to USD 1 billion. 2020.

The average rent in Nam Dinh Vu is 75 USD/m2. The industrial zone is located in Cat Hai Economic Zone, so businesses that come to rent here also benefit from the 10% corporate income tax policy for 15 years (free of tax in the first 4 years, in the next 9 years reduced 50 % tax). This is also one of the advantages to help Nam Dinh Vu Industrial Park attract investors.

The industrial real estate market continues to have great prospects for growth both in terms of investors and rental prices.

JLL said new investors from Asia, such as Japan, South Korea and China, will still be interested in Vietnam's industrial real estate due to the wave of manufacturers leaving China. signs of cooling off and Vietnam is expected to continue to attract investors.

"Land prices are expected to continue to grow from now to the end of the year due to strong demand from investors", said JLL.

Particularly in Bac Ninh, land prices have increased 12% compared to last year and are expected to increase. Approximately 615 hectares of industrial land is planned for release in the next 12 months.

Sharp Corporation has just announced plans to build a new factory in Vietnam, while US shoe production company Brooks Running is also moving its production line from China to neighboring countries.

However, companies already present in Vietnam also raise concerns about finding highly skilled labor, and a range of supply chain requirements of quality corresponding to their source. used in China.

In order to attract more foreign investment, to welcome the benefits of companies moving here, Vietnam will need to improve its infrastructure network and the process of conducting cross-border transactions.

According to Hai Minh