Rents for industrial lands in HCM City and Hanoi have increased by two and 1.7 times respectively in the third quarter from a year earlier.
|Vietnam industrial real estate demand has increased in the third quarter of this year. Photo thanhtra.vn|
At the recent 2020 Vietnam Industrial Real Estate Forum, Le Trong Hieu, director of industrial and logistics services at CBRE Vietnam, said the rates in HCM City and Hanoi have risen by much more than the 20-30 per cent growth seen in other localities in both the south and north.
In HCM City, some industrial parks that rented land at US$150 per square metre for a 30-45-year lease term now want $300.
In Dong Nai Province, the rents for industrial lands have increased from $110 to $200.
In some provinces in the north, rents have risen though not by as much as in the south.
In Hanoi, for instance, they have increased from $155 to $260, while in Bac Giang Province they have gone up from $55 to $110.
According to Hieu, these "unprecedented" growth rates have been triggered by surging demand and limited supply.
According to a CBRE Vietnam survey, in the past 12 months the demand for leasing land to build factories and warehouses has increased.
Some industries such as electronics, e-commerce, animal feed, etc have expanded their areas.
Auto manufacturing and components companies are planning to expand their production facilities in the central region.
Experts said increasing investment by the Government in transport infrastructure, effective handling of the COVID-19 pandemic and US-China trade tensions have encouraged manufacturers to look to Vietnam as an investment destination to diversify their supply chains.
Since the country’s economic reopening after the COVID-19 pandemic was put under control, industrial land for lease has been a key source of business.
To meet the increasing demand of the market, in the north, some industrial land areas such as Bac Giang, Thai Nguyen, and Nam Dinh have been re-planned.
Meanwhile in the south, authorities in Binh Phuoc, Tay Ninh and Binh Thuan provinces are planning to become new industrial clusters.
There are 279 industrial parks in the country with occupancy of 71.1 per cent, which have created 3.83 million jobs, according to the Ministry of Planning and Investment.
Another 87 are under construction. VNS
Vietnam has emerged as a popular destination for industrial property projects as increased labour costs, trade disputes and COVID-19 prompt global manufacturers to vary their supply chains throughout Asia, according to CBRE.
Many segments of the real estate market are soon expected to benefit from the EU-Vietnam Free Trade Agreement, which takes effect in August.