Fion Ng - Chief operation officer BW Industrial Development JSC
With the global recessionary outlook, export orders in Vietnam have dropped. But many companies who are talking to us right now are actually thinking about catching the economic rebound in the second half of 2024. To be ready for that, they have to start looking now.
Our customers are looking for space because supply chain diversification has become a top priority, and they are preparing ahead for the economic rebound expected strongly in 2024.
The plan has strong financial backing from international investors despite global and local economic turbulence.
We secured $300 million from international investors in the first quarter of 2023 alone. This transformative investment took BW’s total commitment in Binh Duong from $600 million to $900 million, solidifying its position as one of the province’s largest foreign-led companies. BW is resolute in attracting further investments to the province, with the total projected to exceed $1 billion this fiscal year.
Bruno Jaspaert - CEO, DEEP C Industrial Zones
We saw the biggest investment influence and the biggest room for growth in the north. This is absolutely not because the south is less interesting. However, the north is certainly not the only place for investors to choose, but it also depends on many other factors, such as appropriate infrastructure or production facilities located near the supply chains of the investors and manufacturers themselves.
And yet again, other manufacturers are looking for very specific materials that are easier to find in a specific location such as mining, incoming or outgoing goods.
In the north, there are a number of provinces that are doing very well, such as Haiphong, that have been doing well over past years. Quang Ninh is catching up very rapidly and is quite interested in a long-term vision plan for attracting industries.
There are a number of provinces with particular advantages, and I believe that we will see more and more industrial complexes in the future.
Paul Fisher - Country head, JLL Vietnam
The medium- to long-term prospects for industrial and logistics real estate in Vietnam are strong indeed.
Vietnam benefits heavily from a big wave of investment from China+1, an influx of new highly sophisticated manufacturers and also just a growing diversification of the manufacturing base globally is benefiting and a lot of that is coming to Vietnam and as a result of that trend, the growth in manufacturing is really the backbone of economic growth in Vietnam and that’s also driving growth in the logistics sector.
We’ve seen growth for a number of years now increased, particularly from international investors in the Vietnamese industrial logistics property market, which accelerated from around 2018 when we saw a wave of private equity money that came in and funded a lot of development. We’re also seeing a big growth in the amount of real estate that we have, both industrial and in logistics. JLL’s research forecasts that warehouse space will almost double from 2023 through to 2025.
We’re also seeing a lot of renewed interest and some investors starting to close deals again. We expect that previous upward trend to continue in terms of overseas funding. A number of investors already will be in the office at the precise location, so we likely see a very strong end to this year.
Hoo Swee Loon - Deputy general director Le Mont Group
I believe that the industrial real estate sector in Vietnam will experience robust growth in the near future. Vietnam is becoming a favoured destination for foreign investors in the China+1 strategy, attracting major industrial players to set up operations and resulting in a rapid increase in demand for industrial land, factories, and warehouses.
Moreover, Vietnam is striving to become a modern industrial nation, aiming for the industrial sector to contribute 40 per cent of GDP by 2030. To achieve this goal, the government is issuing policies and strategic actions to facilitate the development and expansion of industrial clusters (ICs). The number of ICs is expected to grow substantially, leveraging their unique advantages.
First and foremost, the planned and constructed ICs make the most of the potential and natural advantages of each region and locality. Additionally, these clusters provide opportunities for new small- and medium-sized businesses.
Furthermore, the production facilities within these clusters have generated tens of thousands of jobs for local labour with competitive wages compared to regional counterparts, enhancing economic competitiveness.