Northern industrial properties poised to become lucrative investment channel

Statistics by Dat Xanh Services Institute for Economic - Financial - Real Estate Research suggest that the total industrial property supply in 2024 rose by 9 per cent, reaching around 15,800 hectares.

Bac Giang, one of major industrial hubs in northern Vietnam. Photo: baodautu.vn

New projects from diverse localities have continued to secure planning approvals and investment policies, with several projects exceeding 100ha in scale.

By the fourth quarter of 2024, the total industrial land area in the northern region had exceeded 16,800ha, up 0.9 per cent on-quarter and 15.2 per cent on-year.

In areas with robust industrial production such as Bac Ninh, Haiphong, and Thai Nguyen, occupancy rates remained robust, surpassing 83 per cent.

The ready-built warehouse and factory market also exhibited robust demand, with average occupancy rates reaching 73 per cent and 85 per cent, respectively.

The average industrial land rental price stood at $130 per square metre, up 4.8 per cent on-year. Notably, the rental prices in localities with strong demand, such as Bac Ninh and Hung Yen, surging by approximately 10 per cent.

Northern Vietnam eyed 68 new industrial park (IP) projects last year, with Bac Giang surging as a prime destination enticing a total of 16 new ventures covering 3,400ha.

New IPs offer nearly 2,000ha of leasable land, catering to the needs of electronics, textiles, and car manufacturing. These zones have reduced the overall occupancy rate down to 68 per cent, thereby facilitating market access for new investors.

Do Thu Hang, senior director of Advisory Services at Savills Hanoi, shared her insights on the 2025 property market outlook at a seminar in Hanoi on February 13.

“Strong FDI inflows are expected to drive even more robust growth in the already heated industrial property sector. Amid ongoing US-China tensions and the China +1 strategy, whereby businesses seek additional production locations outside China, Vietnam is well-positioned to benefit due to its proximity to China, competitive production costs, and rapidly improving logistics infrastructure,” said Hang.

According to Hang, the southern industrial leasing market, including Ho Chi Minh City, Binh Duong, Dong Nai, and Long An, rental costs have surged and exceeded VND5 million ($200) per sq.m for the entire lease term in some areas.

The rental costs in the north remain comparatively lower, approximately 20 per cent below those in the south. Coupled with abundant land reserves and favourable accessibility, this creates a competitive advantage, contributing to robust foreign direct investment inflows.

Savills’ senior director emphasised that this accounts for the presence of numerous global players that have already set up manufacturing facilities in the northern region.

Localities demonstrating robust growth in the industrial property segment, such as Bac Ninh, Haiphong, and Nghe An, likewise provide advantageous conditions to spur supporting industry development.

Soon, provinces such as Ha Nam, Thai Binh, and Nam Dinh are also expected to witness positive industrial property growth, owing to low rental costs, well-developed infrastructure, accessibility to key transport routes, and a robust network of supporting businesses.

Thomas Rooney, senior manager of Industrial Services at Savills Hanoi predicted localities south of Hanoi, such as Nam Dinh and Thai Binh, could witness notable industrial property development in the near future.

“With competitive land prices, abundant labour, and strategic locations, these localities are increasingly drawing investor interest, particularly in high-value industrial sectors,” he remarked.

The IP expansion is also anticipated to bolster demand for serviced apartments, especially from foreign experts, engineers, and technicians working in these sectors.

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