Smoothing The Path For Capital Inflows

More than 300 participants took place in the Vietnam Industrial Property Forum 2022

Deputy minister of Planning and Investment Tran Duy Dong at the forum

Deputy minister of Planning and Investment Tran Duy Dong

Vietnam has been preparing the necessary conditions to receive a new wave of investment. The nation has put itself in a strong position to become an important global production base by continuing to perfect its institutions and policies and giving priority to projects that use modern and environmentally friendly technologies.

Industrial parks and economic zones have improved their infrastructure to reach international standards. Pilot studies on a number of industry-specialised clusters have been implemented to formulate production and supply networks, allowing them to participate more in global value chains.

Since 2015, the Ministry of Planning and Investment has coordinated with the United Nations Industrial Development Organization and a number of other international bodies to transform some traditional industrial parks into ecological industrial zones. The industrial development space has moved from horizontal to vertical and ensures jobs for workers. In these areas, businesses have engaged in cleaner production, more efficient use of resources, and industrial symbiosis.

To complete the strategic development planning of the new industrial park model, the Ministry of Planning and Investment would like to listen to opinions from domestic and international investors on issues related to the development of industrial parks. Conversations will be had about how urban services and eco-industrial parks can best use their advantages to synchronously develop urban areas, housing, and public utility service works while remaining supportive and specialised enough to cater for different groups of industries, especially the logistics services associated with the e-commerce industry.

VIR's editor-in-chief Le Trong Minh

VIR's editor-in-chief Le Trong Minh

As international trade is still facing interruptions due to geopolitical uncertainties and pandemic control policies in some countries, Vietnam is considered a bright spot for global investment flows thanks to its stable political and business environment and its effective implementation of drastic measures to meet the government’s goals of adapting to the pandemic and recovering production. Many large scale investors are moving their attention to Vietnam to find business opportunities and diversify supply sources, leading to a strong increase in demand for infrastructure and industrial real estate.

However, the strict requirements from multinational corporations and the government's decision to focus on high-quality investment flows will require the adjustment of policies and mechanism corridors. New trends will be formed in the coming time.

As the leading press agency in Vietnam, and under the Ministry of Planning and Investment, VIR wishes to convey more updated and practical information to domestic and international investors through this forum, allowing a better understanding of the new opportunities that are opening up from the movement of international investment capital.

At the same time, the editorial board of VIR also hopes that the information from this forum will be especially useful for the Ministry of Planning and Investment as the advisory body of the Party and the government in the process of consultation to form orientations, guidelines, and policies for industrial real estate development and investment attraction.

Trang Bui, general manager, Cushman & Wakefield Vietnam

Trang Bui, general manager, Cushman & Wakefield Vietnam

Three main bottlenecks need to be removed. The supply chain shift into Vietnam happened too quickly, causing skyrocketing land prices in some key areas and higher costs for manufacturers. Despite their huge potential, some locations near key areas have not yet received investment capital. The nation has not yet properly utilised the potential of the key economic region and surrounding areas.

Although the country has spent about 5.8 per cent of its GDP on infrastructure development, it is still a long way from developing an integrated network with the deep-sea port system, inter-regional highways, and waterways. Moreover, the completion of key projects often takes three to five years and frequently runs over schedule. This is hindering progress as investors would rather wait until the infrastructure is completed.

Vietnam is focusing on attracting high-level industries, however, the workforce still lacks skilled personnel and management.

The social security regime to support the main production force at factories is not good enough. Many unskilled workers migrate from rural areas to key economic zones but they are offered inappropriate facilities and services. The workers, therefore, have not been able to focus on settling down and improving their skills, making them unable to meet investors’ requirements fully.

Lance Li, CEO of BW Industrial Development JSC

Lance Li, CEO of BW Industrial Development JSC

The recent wave of investment in industrial property is definitely a good sign for the local market, which is especially clear when looking at the economic figures for the first quarter of this year. It is positive that so many investors have been coming to the country to set up their manufacturing bases.

You can also see that the prime minister’s dealings with the US have been fruitful. Vietnam is now attractive to many foreign investors and I believe that even more investment will be coming. From our point of view, we welcome competition that makes the market healthier and more sustainable.

Global supply chains have been significantly impacted in the past couple of years and people are now not talking about just-in-time but about just-in-case. They are being redesigned and reorganised and Vietnam sits in a healthy position during this change.

We, as infrastructure providers, should take the opportunities that arise and provide better services and solutions for incoming foreign investors.

More overseas funding coming in means more opportunities for us. Facilities to start manufacturing processes are needed along with storage systems for products. We have ready-built factories and warehouses that can meet the requirements.

We also have a large land bank. Currently, there are 2.2 million square metres of gross floor area completed or under construction that can meet all the requirements of tenants.