Mr. John Campbell, Senior Consultant, Savills Vietnam Industrial Services Department =, said that in the first two quarters of 2019, Vietnam’s industrial real estate market recorded the positive growth and this will create a big push for the housing and office market.

To date, 326 industrial parks have been established with a total area of ​​95,500 ha. The market recorded 251 industrial parks which were operating with 60,900 ha (74% of the filled area), 75 industrial parks (29,300 ha) are under construction, compensation and site clearance; 17 coastal special economic zones have a total supply of 845,000 ha with 3.6 million employees.

 

 

According to this expert, when the occupancy rate of industrial parks is increasing, the labor forces, managers, experts working here will surely need their houses. On the other hand, the manufacturers (enterprises, corporations) also need to set up the working offices and representative offices in the production area to facilitate the management and trade connectivity.

Besides the housings and offices, there are two connected markets with strong demand to connect with the industrial real estate market, it is likely that the retail real estate will benefit from this demand chain. Where the housing and office development exists, where immediately comes the accompanying services to serve this real estate ecosystem.

Mr. John Campbell said that FDI in the industry in the first half of 2019 recorded 1,723 newly registered projects, equivalent to USD 7.41 billion. The manufacturing segment attracted 605 projects, accounting for 71.2% of FDI and USD 13.15 billion, up to 39.8% by year.

According to data from the Ministry of Planning and Investment, Hanoi and Ho Chi Minh City are the two most attractive cities, accounting for 26.3% and 16.7% of total FDI. Followed by Binh Duong, it accounts for 7.4% and in Dong Nai, it accounts for 6.7%. The investment capital from Hong Kong (China) accounts for 28.7% with USD 5.3 billion, followed by South Korea with USD 2.73 billion and China with USD 2.28 billion. In the first 6 months, the industrial parks and economic zones have attracted nearly 340 FDI projects with a total capital of nearly USD 8.7 billion.

Vietnam’s industrial real estate is growing on the rise of FDI capital 10 times during the past decade. The abundant industrial land is facilitating the production projects and increasing the lease options for both ready-built factory workshops (RBF) and custom-built workshops (BTS).

However, this expert said, Vietnam needs to carefully choose the upcoming industrial projects to grow more in the value chain, increase the competitiveness and sustainable development. The cheap labor and investment incentives, especially preferential taxes, will continue to become the leading foreign investment attraction in Vietnam. But as it continues to transition to high-value industries, Vietnam must focus on quality rather than quantity of investment.