Vietnam’s industrial property picking up steam in Q1

Various industrial parks up and down the country are seeing new investment capital pumped into them, Le Toan

Fuchs, a leading German lubricants player, has taken on a 20,000 square metres land lease at Phu My 3 Specialised Industrial Park (PM3 SIP) in the southern province of Ba Ria-Vung Tau to build its latest factory. The 55-year lease, agreed in March, is attributed to the province’s competitive prices and excellent proximity to the Cai Mep Port cluster, which currently handles 30 per cent of Vietnam’s container exports.

Mai Son, director of Fuchs Vietnam, said that investing in a new plant in the country shows trust and commitment to customers. “After evaluating many locations, we selected PM3 SIP, as we believe in the potential of Ba Ria-Vung Tau and Cai Mep,” Son said.

PM3 SIP is known for its excellent infrastructure, full range of services, and proximity to Cai Mep Port. Growing numbers of export companies are choosing Ba Ria-Vung Tau due to Ho Chi Minh City’s rising industrial land prices and lack of vacant land. The positive factors mean that IPs in Ba Ria-Vung Tau have successfully attracted multinational tenants in recent years.

“Fuchs is the second European company at PM3 SIP, and no doubt having European tenants will bolster the trust of other Western companies,” added Kazama Toshio, deputy general director of PM3 SIP.

Meanwhile, according to JLL, the southern provinces have seen a new supply of IPs and ready-built factories (RBF).

The supply of IP space and RBFs grew significantly in the first four months, reaching almost 27,000 hectares and 3.8 million sq.m, respectively.

VSIP3 in Binh Duong held a groundbreaking ceremony in March, with more than 30 corporations and companies already interested in researching and developing production, equivalent to 175ha of industrial land.

A month previously, Amata Long Thanh Hi-tech IP in the southern province of Dong Nai was approved to lease additional land. In addition to existing projects, in the first quarter the market also recorded two newly-started projects in Phu An Thanh IP in the southern province of Long An and for Frasers Property in Binh Duong IP. These projects are estimated to provide the market with more than 85,000sq.m of RBFs by the end of 2022.

Meanwhile, in the northern provinces, the commencement of Thuan Thanh I IP in February has bolstered Bac Ninh province’s market, adding 160ha of land for lease and increasing the total industrial land area in the north to more than 10,000ha. In the same province, VSIP Bac Ninh projects increased the investment capital by nearly $941 million over the period, and Goertek’s manufacturing plant in Que Vo IP in Bac Ninh increased its capital by over $300 million. The total supply in the northern region remains stable at 2.2 million sq.m.

The occupancy rate of IPs in the north this quarter remained at 80 per cent, rapidly increasing compared to 75 per cent in the same period last year. The occupancy rate of RBFs also continued to be high, reaching 98 per cent. The supply in 2022 promises to be abundant as provinces bordering Hanoi have plans to deploy IPs in the area. The IPs of Binh Giang 2, Thanh Ha, and Kim Thanh were added to Hai Duong province’s IP planning in March. Elsewhere, Hung Yen approved IP No. 5 in February.

In the RBF market, some prominent projects are expected to be launched this year, such as GD.1, funded by KTG-BKIM in Yen Phong II-C IP, and GD3 from BW Industrial at VSIP Hai Duong, both of which will add to the currently limited supply of RBFs.