Numerous large-scale groups have relocated their facilities from China to Vietnam in order to avoid the impact of the US-China trade war, showing the potential for strong development of industrial real estate.
|The list of large groups relocating factories from China to Vietnam |
According to the white paper on Vietnam’s industrial real estate in the first half of this year published by Savills Vietnam, to date, three large groups completed the relocation, including aerospace manufacturer Hanwha Aero Engines Co., Ltd. from South Korea, automotive components manufacturer Yokowo from Japan and garment and textile producer Huafu Industrial Co., Ltd.from Hong Kong.
Besides, two groups have moved, namely AirPods manufacturer Goertek (to a factory in Bac Ninh), and electronics – TV manufacturer TCL (moved to Binh Duong).
In addition, a series of enterprises operating mainly in the fields of electronics, textiles, footwear, and spare parts production, such as Foxcom, Lenovo, Nintendo, Sharp, Kyocera, and Oasis, are under consideration.
According to Savills Vietnam, the US-China trade war, additional investment, and new free trade agreements have all had a positive effect on Vietnam’s industrial sector.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) entered into force in January while the EU-Vietnam Free Trade Agreement (EVFTA) was signed in June 2019. This historic and ambitious agreement will eliminate 99 per cent of customs duties and has raised interest in industrial property.
Regional Comprehensive and Economic Partnership (RCEP) negotiations are underway and expected to be finalised at the end of 2019. The agreement will increase co-operation between ASEAN countries and the six Asia-Pacific states with existing free trade agreements.
In the first quarter of this year, about 326 industrial zones were established, with a total area of 95,500 hectares. 251 of these industrial zones are in operation with an area of 60,900ha, accounting for 74 per cent of the total, while 75 industrial parks are under construction, compensation, and site clearance on a total area of 29,300ha, according to Savills Vietnam.