Southern industrial real estate sees high demand in Q3

Southern industrial real estate sees high demand in Q3. - Illustrative image (source: nhandan.vn)

Hanoi – The industrial real estate market in the south was vibrant and thriving in the third quarter of 2023, with the rental area reaching 143,000 sq.m, up 2.4 times compared to the previous quarter.

Many industrial parks have readied their supplies to welcome foreign direct investment (FDI) capital flows into Vietnam.

According to Cushman & Wakefield in Vietnam, the demand for renting ready-built factories and warehouses in southern localities is diverse, coming from many industries such as textiles, chemicals, and electronics.

In the quarter, factories for rent in Dong Nai, Binh Duong, Ba Ria - Vung Tau, and Long An recorded the highest absorption rate. Dong Nai led with nearly 60 per cent of the total absorption.

The occupancy rate of industrial factories and warehouses for lease in the southern region has reached 74 per cent, with an average rental price of 4.7 USD/sq.m/month. High-demand locations such as Dong Nai and Ba Ria - Vung Tau have experienced the highest annual growth, approximately 2.5 per cent.

In the optimistic trend of the market, some companies operating in supplying industrial park infrastructure have reported a relatively high warehouse occupancy rate.

For instance, warehouses for lease in industrial parks managed by Sonadezi Corporation and its member companies have recorded an occupancy rate of 92 per cent, attracting approximately 130 million USD in FDI and 720 billion VND (nearly 29.7 million USD) in domestic direct investment (DDI).

In Dong Nai, 33 industrial parks have leased a total of 6,024 ha, reaching nearly 86 per cent of the available land for rent. As of November 2023, Dong Nai attracted approximately 1.037 trillion USD in FDI and over 2.64 trillion VND in DDI, up 48.2 per cent and 32.15 per cent of the set plan, respectively.

So far this year, the leased area reached 24.73 ha, with projects primarily renting warehouses for manufacturing and business purposes.

Meanwhile, Ba Ria – Vung Tau lured 751 million USD of FDI from new projects, and 503 million USD from capital-added projects, respectively up 2.78 times and 15.3 per cent compared to the same period last year.

The total supply of industrial factories and warehouses in the south is forecast to rise by about 2.5 million sq.m by 2026. This is expected to be new motivation for the market, especially in the context of industrial land available for lease has become increasingly scarce.

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