News

Industrial real estate has transactions of hundreds of billions of dollars, "revealing" the leading area

1810-2023

Industrial real estate has transactions of hundreds of billions of dollars, "revealing" the leading area

Bất động sản công nghiệp xuất hiện các thương vụ đầu tư hàng trăm tỉ USD, “lộ diện” khu vực dẫn đầu

Regarding the countries with the largest investment in Vietnam, we can mention Singapore with 25% of total investment capital, which costs 1.4 billion USD. China has the second largest total investment capital, it accounts for 23% of investment capital and Hong Kong accounts for 12%.

In a recent Vietnam industrial real estate report, Savills Vietnam representative pointed out the country's largest industrial real estate investment deals, which are worth billions of dollars.

According to Savills, after a volatile first half of the year, Vietnam has stable growth thanks to the main market drivers. The key factors are young and dynamic workers, competitive labor costs, an export-oriented economy, a stable business environment, geographical location, and Vietnam's active participation in the Free Trade Agreement.

Regarding import-export trade, Mr. John Campbell, Deputy Director and head of Industrial Services, Savills Vietnam, commented that from 2016 to 2022, the export turnover of electronics and computers will increase by 193%, and the export turnover of electronics and computers will increase by 193%. Phone exports increased by 68%. It shows that Vietnam is moving forward as an export-oriented economy for high-value-added products.

Regarding investment in production, foreign investment (FDI) in the production and processing sector recorded 8.4 billion USD. It accounts for 63% of total foreign investment capital in the first 6 months of 2023. 379 new projects have newly registered capital of 5.4 billion USD. Of the 345 existing projects, there are 225 projects with increased capital with a total additional capital of 2.1 billion USD.

Bất động sản công nghiệp xuất hiện các thương vụ đầu tư hàng trăm tỉ USD, “lộ diện” khu vực dẫn đầu - Ảnh 1.

Regarding the countries with the largest investment in Vietnam, such as Singapore with 25% of total investment capital worth 1.4 billion USD, China with the second largest total investment capital, accounting for 23% of investment capital, and Hong Kong accounts for 12%.

In Vietnam, the North attracted the largest investment with 3.4 billion USD, which is equivalent to 63% of newly registered manufacturing FDI projects. Meanwhile, the South ranked second with a total investment capital of 1.4 billion USD or 27% of the project. Regarding the number of projects, the North also holds the first position with 238 new projects, the South recorded 122 projects and 19 projects in the Central region.

In terms of provinces, Bac Giang is the province that recorded FDI capital with 1.06 billion USD, which is equivalent to 20% of investment capital. Binh Phuoc with 11% of total registered capital worth 577 million USD and Bac Ninh ranked third with 9% of the total registered capital worth 486 million USD.

Some major investment projects in the first half of 2023 in the Northern region are projects of Fulian Precision Technology, with an investment capital of 621 million USD in Bac Giang, projects of Goerteck (Hong Kong) Co. 280 million USD in Bac Ninh, and project of Boltun Corp & QST International Corp 165 million USD in Quang Ninh.

In the South, projects include Shandong Haohua Tire's project cost 500 million USD in Binh Phuoc, Suntory Pepsico Vietnam's project cost 185 million USD in Long An, and Suntory Pepsico Vietnam's project cost 163 million USD in Binh Duong of Pandora Production Holdings A/S.

According to Savills, Vietnam's industrial production increased 2.6% year-on-year in August 2023. It increased from 2.3% a month earlier. Output increased by 3.5%, up from 2.9% in July.

In 2023, there will be 397 industrial parks (IPs) established with a total land area of 122,900 hectares. Of these, 292 industrial parks are operating with a total land area of more than 87,100 hectares. Another 106 industrial parks are being built with a total land area of 35,700 hectares.

The Northern key economic region recorded 68 industrial park projects with a leased land area of 12,000 hectares. Rented land prices increased at 30% year-on-year, reaching an average of 138 USD/m2/rental period. Tenants in this area mainly operate in the fields of electronics and computers, automobile manufacturing and assembly, machinery and equipment related to solar energy. Some prominent businesses operating in the North include Samsung, LG Electronics, Canon, Hyundai, Honda and Vinfast.

The Northern Economic Zone has a developed road network. It helps strengthen connections between Hanoi and key industrial provinces such as Bac Ninh, Hung Yen, Bac Giang, Hai Duong, Hai Phong and Quang Ninh. This area has three main ports: Hai Phong Port, Lach Huyen Deep Water Port and Cai Lan Port. These three ports help create links to international markets such as Korea, China and Taiwan, and create the region's industrial competitiveness.

Meanwhile, the southern key economic region recorded 122 industrial park projects, with a total land area for lease reaching 24,883 hectares. Land rental prices increased by 15% year-on-year and reached an average of 174 USD/m2/rental period. Tenants are mainly in the fields of food and beverage processing, construction materials, textiles and rubber and plastic products. Some prominent tenants include LEGO, Suntory PepsiCo, Intel, Unilever, Coca-Cola and Kumho Tires.

Regarding infrastructure, the Southern Economic Zone is currently waiting for Ring Road 3 project (expected to be completed in 2026), Ring Road 4 (expected to be completed in 2028) and Ben Luc - Long Thanh Expressway (expected to be completed in 2026). completed in 2025). On August 31, 2023, three main bidding packages at Long Thanh International Airport in Dong Nai and Terminal 3 of Tan Son Nhat International Airport in Ho Chi Minh City were started. Long Thanh International Airport will have 3 phases with a total area of 5,580 square meters

Mr. John Campbell, Deputy Director, Head of Savills Vietnam Industrial Services, said that Vietnam is expected to maintain rapid economic growth in the medium term as exports recover. At the same time, there will be a shift in the global manufacturing supply chain to competitive manufacturing centers in Southeast Asia.

The years 2022 and 2023 have witnessed important milestones for the growth of the industrial sector in the Mekong Delta. In September 2023, investor VSSIP started the first project in Can Tho with a total area of 900 hectares. It is expected to be a complex of industrial, high-tech, service and residential centers. Phase 1 will have a total area of 293.7 hectares, with a total investment of more than 152 million USD. VSIP also invested in building a road costing 7.4 million USD, connecting the project with National Highway 80 in the pre-construction phase. Regarding infrastructure, according to the Development Plan for the period 2021 - 2030, with a vision to 2050, the Mekong Delta is expected to develop more infrastructure with 6 expressways 1,166 km long.

However, Mr. John Campbell also pointed out certain challenges of Vietnam's industrial real estate in the coming time.

First, the quality of all transportation infrastructure in Vietnam is still lower than other countries in the region. Although transportation infrastructure is expanding, development has not yet met the pace of economic and social growth. Urban population and freight transport are the main drivers for infrastructure, while port and seaport potential has not yet reached its full potential.

Second, as Vietnam moves to attract industries with high added value and increase productivity to be on par with other countries in the region, the demand for skilled labor will increase. Although labor costs in Vietnam are only 1/3 of those in China, productivity is also lower at the same level.

Third, new regulations are due to apply at the end of 2022, which has created obstacles for industrial developers, manufacturers and logistics companies. Foreign investors are having difficulty obtaining the appropriate certificates and some projects have been delayed because of this problem.

Bất động sản công nghiệp xuất hiện các thương vụ đầu tư hàng trăm tỉ USD, “lộ diện” khu vực dẫn đầu - Ảnh 2.