Competition heats up for southern industrial zones

Competition heats up for southern industrial zones, Illustration photo/ Dantri

According to the ‘Competition in industrial real estate in Vietnam’ report released at the end of February by the Vietnam Competition and Consumer Authority under the Ministry of Industry and Trade, the southern region has more than 400 industrial zones (IZs) with a total area of up to 109,000 hectares.

Binh Duong is the southern province with the most significant industrial real estate space with a market share of up to 13 per cent, equivalent to more than 14,500ha. It is the third-largest province in Vietnam in terms of attracting foreign investment and has the highest occupancy rate in the entire country at 99 per cent.

The five provinces of Binh Duong, Ba Ria-Vung Tau, Ca Mau, Dong Nai, and Long An account for more than 50 per cent of the total market share. Except for Ca Mau, these locations are suitable for manufacturers because they will reduce transportation costs for freight transportation from and to Ho Chi Minh City.

The southern market has warmed up since last year, with IZs returning to production and many large foreign-led projects continuing to land in the south. As a result, land prices have regained their momentum, reaching $117 per square metre, with a 7.3 per cent increase on-year. Rent for warehouses reached $4.70 per sq.m, up 4.9 per cent on-year, with solid speed recorded in Long An in particular.

The northern region, meanwhile, boasts around 63,500ha of industrial land with 238 IZs and clusters already in operation or under construction.

The northern industrial real estate market experienced high occupancy rates and more businesses were attracted last year. Quang Ninh province stands out with an area of ​​11,300ha for IZs, equivalent to 18 per cent of the total area.

Quang Ninh, Bac Ninh, Hung Yen, Haiphong, and the capital of Hanoi account for more than half of the total market share.

Recovering after last year’s pandemic issues, key IZs in the north are still a promising destination for investors. The most typical example is Samsung increasing production capacity by nearly 50 per cent for its factory in Bac Ninh.

Hanoi has also welcomed TOMECO’s high-tech supporting industrial factory project in Hanoi South Supporting Industrial Park.

With many economic recovery policies from the government, the occupancy rate of the northern IZs remained at 80 per cent, a rapid growth compared to 72 per cent in the third quarter of 2021.

The fact that IZs quickly adapted, maintained, and ensured production and business in Q4 of last year helped industrial land prices recover momentum.

Industrial land prices reached $110 per sq.m, up 7.1 per cent over the same period last year. Similarly, warehouses for rent also recorded good growth momentum compared to autumn last year, reaching 4.9 per cent over the same period of the previous year, according to Cushman & Wakefield Vietnam figures.

The central region is now the least developed, with 260 IZs put into planning with a total scale of up to 62,800ha due to difficulties in overcoming a challenging climate and undeveloped infrastructure system.

Thanh Hoa is currently the central province with the most significant scale of industrial real estate in the central region with a market share of 19 per cent, equivalent to 12,100ha of planned land.