Industrial property market set to grow

The country's industrial real estate market has been forecast to develop strongly this year and in the future.-Photo dantri.com.vn

Nguyen Tran Nam, chairman of the Vietnam Real Estate Association, made the statement at the Vietnam Industrial Property Forum 2019 held by the Central Institute for Economic Management (CIEM), the Vietnam Real Estate Association (VNREA) and Thuong Gia Magazine on Tuesday in Ha Noi.

Vietnams industrial real estate market had seen strong development, creating confidence among foreign investors, Nam said. This would be the basis for more growth, helping the country to become one of the most attractive investment destinations in Southeast Asia for the manufacturing industry.

With advantages created by socio-economic development and policies, Vietnam's industrial real estate market would have more opportunities to develop.

"If investors take advantage of these opportunities and State policies to encourage development, this market will develop," Nam said.

At the forum, Nguyen Dinh Cung, CIEM director, confirmed this was a golden time to invest in industrial real estate and localities to upgrade urban, industrial zones and local economic regions.

“The attractiveness of the domestic industrial real estate market is higher than the regional average and continues to grow thanks to many factors such as low labour costs, reasonable rents and preferential corporate income tax,” Cung said.

However, the development in this segment faced a lack of infrastructure connecting industrial zones with other infrastructure, according to Cung. The zones had also failed to reach their potential. State policies had been unclear and not strong enough to support investors and promote development.

State policies should develop industrial zones together with services and living quarters for labourers because that motivated them to work harder to buy houses, Cung said.

Administrative procedures needed to change to deal with market demand. Localities should co-operate with investors to solve problems in the development of industrial zones and other projects.

The development of the IZs should be connected with the development of logistics infrastructure, the start-up ecosystem, innovation and urbanisation towards sustainable development in industrial parks and ecological zones.

"It needs market forecasting, systematic planning, connectivity and synchronisation to ensure sustainable development and competitiveness in the future,” Cung said.

Tran Quoc Trung, deputy director of the Economic Zone Management Department under the Ministry of Planning and Investment, said investors should research and diversify industrial zones, such as eco-industrial parks, support industry parks and intensive industrial zones for specific sectors.

Meanwhile, the State would complete regulations on industrial parks, urban areas and services to synchronously develop technical and social infrastructure, he said.

The State would also complete regulations for investment, tax, finance and land to support industrial infrastructure and industrial parks in areas struggling with socio-economic development.

Le Anh Dung, sales director of TNI Holdingd Vietnam, a member of TNG, said infrastructure had been a key factor to attract investors

"We need to continue to improve infrastructure, especially port and airport infrastructure to support cargo transport to other countries,” Dung said.

“Vietnam should develop more deep-water ports such as Cai Lan in Quang Ninh, Nghi Son in Thanh Hoa, Vung Ang in Ha Tinh, Chan May and Lang Co in Hue, Da Nang and Long An.

“When a port is close to an investment site, within 150km, foreign investors will choose that site to develop their projects.”

Dang Hung Vo, a real estate expert, agreed that Vietnam needed to continue to invest in infrastructure development, including highways, deep-sea ports, improving the quality of electricity and water system, and alternative energy systems.

To retain investors in the long term, the Government should also simplify administrative procedures and improve connectivity between economic sectors.