DEEP C Industrial Zones remain a reliable investment location

According to real estate consultancy firm CBRE's report on the real estate market in the fourth quarter Q3/2023, the industrial real estate occupancy rate in the tier-1 market is being kept at a positive threshold.

Manufacturers from different industries and countries are still expanding in both the southern and northern regions, demonstrating the sustainable development of many fields and a positive trend in the Vietnamese industrial real estate market. The north and south have average occupancy rates of 81 per cent and 92 per cent respectively.

The absorption area in the northern market has reached its highest level for the past five years, exceeding 800 hectares (ha) – a rise of 37 per cent on-year. As for the southern market, due to the limited available land, the absorption area was 32 per cent lower than the same period last year, standing at 500ha.

In addition, the ready-built warehouse and factory market also saw a busy year. The northern region recorded the highest ever new supply with 770,000 square metres, with the south showing a similar number.

Although supply increased, the occupancy rate for ready-built factories remained stable at 86 per cent in the north and increased slightly to 85 per cent in the south. The absorption area in the southern region in the second half (H2) of 2023 was 3.8 times higher than in H1, thanks to positive policy shifts.

The semiconductor and electric vehicle industries made their presence felt in Vietnam in 2023, with growing local focus and business interest in high-tech and sustainable industries, these sectors are expected to drive demand in the future.

As a Belgian-invested enterprise coming to Vietnam, DEEP C first launched IZ projects in Haiphong and continued to expand with two IZs in the neighbouring Quang Ninh province and has plans to expand operations in Vietnam over the coming years.

The inauguration of the $18.6 million POSCO Vietnam Processing Center project

Bruno Jaspaert, general director of DEEP C Industrial Zones, said that localities in the northern region have a conducive investment environment with enormous growth potential in the country.

This does not mean that the southern market is less attractive, as it has its own advantages, but according to Jaspaert, space in the south is increasingly limited, with higher wages and living costs than in the north.

“If we compare the trade between the south and the north, we will see that currently the north has better factors. However, the north is certainly not the only place for investors to choose; it also depends on many other things, such as appropriate infrastructure or the proximity of certain raw materials and production facilities to supply chains," said Jaspaert.

“In short, each locality has its own advantages and I believe we will see more and more regional industrial zone clusters being formed in the future,” he added.

Jaspaert explained the demand for green industrial real estate and sustainable development from foreign investors in Vietnam will surge as secondary investors become increasingly interested in this area, along with renewable energy, due to the introduction of carbon taxes.

At the same time, as available land becomes increasingly scarce, rent will become more expensive, leaving land values as a significant factor in attracting investors to Vietnam in the future.

In 2023, DEEP C Industrial Zones drew in 21 new projects worth $970 million. Many of those projects were in vehicle manufacturing and component production for the renewable energy industry, helping to strengthen these two ecosystems at DEEP C.

Some notable ones included the Boltun project that produces lightweight alloy screws and bolts for electric vehicles, the Sunrise Group project for manufacturing steel and aluminium wheel rims, the TENOWO GmbH project that makes technical nonwoven fabrics for the automotive industry, and the Shilla Corporation project that produces wind turbine components.

South Korea's second-largest corporation SK Group has invested in the ECOVANCE high-tech biodegradable materials project with a total investment of $500 million at DEEP C Haiphong I.

Two new projects have been inaugurated at DEEP C Haiphong Industrial Zones already this year, with the first being the POSCO Vietnam Processing Centre, valued at $18.5 million for processing diverse products made from steel, aluminium, zinc, and more.

The commencement of TENOWO's new $19 million new manufacturing plant at DEEP C Haiphong II

German-backed TENOWO Haiphong Co., Ltd has inaugurated its new manufacturing at DEEP C Haiphong II Industrial Zone also, covering an area of nearly 2ha from an investment of $19 million. The plant will focus on manufacturing sustainable, high-tech nonwoven products for various industrial applications.

Elmar Wind, chairman of TENOWO Haiphong Co., Ltd. said, “Choosing Haiphong as our new manufacturing base was a strategic decision. We are proud to contribute to the development of Haiphong city and Vietnam's thriving manufacturing sector.”

TENOWO offers a diverse portfolio of high-tech nonwovens for a wide range of industries, including automotive, acoustics, construction, healthcare, composites, and filtration, with seven global manufacturing sites across Europe, the US, and Asia.