Industrial real estate market warms up with new transactions
The latest report of the Vietnam Association of Realtors (VARS) showed that industrial real estate continues to be a bright spot in the real estate market with many more investment projects in industrial zones (IZs) approved.
VARS can see great interest from global manufacturers, especially investment in specialized products such as ready-made warehouses, ready-made workshops, logistics items (storage facilities) and data centers.
Foxconn, for example, is speeding up its strategy on diversifying production chains in Bac Giang. It has signed an MOU on the lease of 50.5 hectares of land in Quang Chau Industrial Zone to expand its production scale with total investment capital of $300 million.
Meanwhile, Matsuya R&D from Japan has decided to invest $6.7 million more in the production line in Dong Nai IZ and Taiwanese Giant Manufacturing will add $13 million in the VSIP 2 IZ in Binh Duong, and Taihan Precision Technology $5.3 million in Cam Giang, Hai Duong.
Other large corporations such as Boeing, Coca-Cola, Meta, SpaceX, Netflix and Apple are also seeking business and cooperation opportunities in Vietnam.
Meanwhile, according to VARS, the supply of industrial real estate, especially large land areas, remains limited.
Thanh Pham from CBRE Vietnam said in some areas belonging to IZs in the tier-2 market, tax remission and land rent exemptions are applied, and companies manufacturing products there can enjoy more favorable conditions.
These areas have begun attracting large manufacturers as well as operators of ready-made workshops.
From 2022 to the second quarter of 2023, CBRE recorded a number of large-scale transactions, where land plots with 10 hectares or more were transacted in Northern provinces such as Bac Giang, Thai Binh and Quang Ninh.
The land plots are mostly for the electronics and automobile industries.
Meanwhile, Ba Ria-Vung Tau is the most bustling tier-2 market in the southern region with big investments from the US, China and Japan.
VARS reported that the average rent is $100-120 per sq m and the figure will increase, especially in the tier-1 southern industrial real estate market.
The highest rent has been reported for HCM City, which is between $180 and $300 per sqm, followed by Long An ($125-275 per sq m)
The rents are $100-250 per sqm in Binh Duong and $100-200 in Dong Nai. The prices are cheaper in northern IZs with the rents of $90-120 per sq m.