Industrial park land

Industrial park land

Vietnam has young and abundant human resources, cheap labor costs, and increasingly improved human resources are the factors that attract many large companies and corporations to set up factories here. The number of young Vietnamese workers who know Chinese, Japanese and Korean is increasing, meeting the job demands of companies. Thus, compared to investment in countries such as Thailand and Indonesia, investing in Vietnam will help the business save a large number of costs for personnel.

Vietnam is in a period of industrialization and modernization. Therefore, the industrial sector is also prioritized for development. The system of infrastructure and utilities is increasingly focused on investment, upgrading, and enhancing regional connectivity to help the process of transporting raw materials and goods to the consumer market quickly and conveniently. In addition, the fact that Vietnam joins the Free Trade Agreement (FTA) has opened up many opportunities for the development of the industrial real estate market. Through this Agreement, a series of tariffs have been eliminated, and investment licensing procedures have been streamlined, which has brought great effectiveness in attracting foreign investment, helping businesses easily make decisions to place factories in Vietnam. Vietnam also has more opportunities to exchange science and technology with developed countries, thereby transforming from exporting low-value goods to exporting higher-value goods.

 

Along with that, the US – China trade war forced large corporations to plan for the relocation of production plants from China to safer countries. Vietnam, with its open policy, good ability to control the Covid-19 epidemic, and benefit from the wave of investment shifts, is considered a safe destination, attracting many large companies in the world to relocate machine from China. With this trend, the demand for renting warehouses and factories in industrial parks is increasing, leading to an increase in industrial land rental prices over time. Statistics in the first quarter of 2021 show that the average land rental price in the northern industrial zones reached a new peak of 107 USD/m2, in the southern industrial zones reached 111 USD/m2 per rental cycle. This rent increased by about 8.1% over the same period last year, leading to an increase in rental income.

Southern industrial real estate thrives in HCMC and neighboring provinces and cities. The occupancy rate up to the second quarter of 2021 in HCMC is 88%, Binh Duong is 99%, Dong Nai is 94%, Long An is 84% ​​and Ba Ria - Vung Tau is 79%. The fact that the existing supply is almost filled and the new supply needs more time to prepare for launch, has created leverage that causes industrial real estate rental costs to skyrocket, rents increase by 5 – 10% per year. Currently, HCMC is still leading in the rate of increase in rental rates for factories and warehouses in the southern region with the rental rate reaching 180 USD/m2/lease cycle. In second place is Long An with the asking price of 120 USD/m2/lease cycle. Next is Binh Duong and Dong Nai with the asking price of about 90 – 106 USD/m2/lease cycle. Finally is Ba Ria – Vung Tau with the asking price of 65 USD/m2/lease cycle (according to the Market Report of Savills Vietnam and CRBE Vietnam). In fact, the rental price of industrial real estate in Vietnam is still low compared to other countries in the region, even 30 – 40% lower. In Singapore, the land rent is over 400 USD/m2. This figure in Indonesia is 200 USD/m2, in Malaysia and Thailand is 200 – 250 USD/m2.

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Related information

Land for school construction

Land for school construction

More than a year since Decree 86/2018 stipulating foreign cooperation and investment in the field of education took effect, foreign direct investment (FDI) in the education sector has reached 97 million USD, up to October 2019. Experts say that having a large investment capital in this field will create many opportunities for the educational real estate segment to develop stronger in the future.

The trend of urbanization will continue to spread at a high speed, therefore developing national education will become a top priority to improve workforce skills and increase work productivity. At the same time, with a population of over 94 million people and a young population structure, Vietnam has many advantages to develop the education sector.

In HCMC, there are currently over 50 international schools. These schools not only teach children of foreign families living and working in Vietnam but also Vietnamese families who want their children to study at international certification institutions. Previously, most international schools in HCMC received many applications from Vietnamese students, however, due to the State’s regulations, the number of domestic students attending these schools is limited.

Land for investment on high-rise building

Land for investment on high-rise building

On December 31, 2020, Vice Chairman of HCMC People's Committee Le Hoa Binh signed Decision No. 4834/QD-UBND approving the Project "Building a housing development program in HCMC for the period of 2021 - 2030". According to this scheme, the target of commercial housing development in the period of 2021 – 2030, is expected to develop 45.2 million m2 of the floor; in which, from 2021 to 2025, it is expected to develop 19.7 million m2 of floor space and from 2026 to 2030 is 25.5 million m2 of floor space.

One of the key perspectives in the housing development of HCMC is to transform the housing model from low-rise to modern high-rise housing, mainly for efficient land use, creating a land fund for traffic development, parks, parking spaces, etc., provided that technical and social infrastructure is ensured; increase the proportion of apartment houses in new housing construction investment projects.

HCMC will give priority to the development of investment projects to build new houses, high-rise apartments along major public transport axes (such as metro line No. 1 in Thu Duc City), or areas with the planned implementation of the corresponding technical infrastructure system in 6 developed urban districts including District 7, 12, Binh Tan and Thu Duc City.

Land for resort tourism

Land for resort tourism

Unlike resort real estate, real estate associated with resort tourism is a concept that is extended to more product lines, diverse in both ownership forms and business exploitation capabilities. At the same time, a prerequisite is that the property must be in a quality tourism ecosystem.

If resort real estate defaults to only accommodation products, real estate associated with resort tourism is a new concept. Accordingly, resort real estate is mainly a product line of investment and exploitation of accommodation services. Real estate associated with resort tourism expands to residential urban products (villas, townhouses, apartments) and commercial real estate services (townhouses) developed based on resort tourism.

According to Mr. Nguyen Van Dinh – Deputy General Secretary of the Vietnam Real Estate Association, at present, the trend of the world is to develop tourism systems in the form of scale, which means that the larger it is, the more attractive it is to tourists. With many functions, it will best meet the diverse needs of tourists who are increasingly fastidious and always require high quality.