The demand for Vietnam’s IP land rentals will sharply grow in 2023 thanks to policies promoting a return to investing in the Southeast Asian country.

The industrial real estate segment wants to be a bright spot for the country in 2023, and the prospects are there for new funding from neighbouring countries if Vietnam can utilise its advantages to the fullest.

Vietnam has not yet reached its full potential in industrial property development, due to inadequate regulations and a lack of social infrastructure.

The logistics sector has seen a number of large-scale investments in the first months of the year as it experiences a period of significant growth that is vital to the ongoing development of the country’s economic recovery.

The provinces of Binh Duong and Long An are still active markets in the South, with both land price and rental rate soaring, while the industrial zones in the North are also attractive.

The industrial real estate sector is considered a bright spot this year, and property businesses with industrial parks are expected to benefit from increased demand and rental prices.

Despite a new outbreak of COVID-19 in Vietnam, the industrial property sector saw positive signs with new industrial zones established and key industrial projects beginning operations, according to Savills Vietnam.

Foreign capital continued flowing to industrial real estate via mergers and acquisitions (M&A) in five months of this year, particularly in Hanoi and Ho Chi Minh City.

The supply of industrial property in the South is expected to rise further in the next five years to capitalise on the increasing demand in the region, and further strengthen its leading position in terms of supply, according to JLL Vietnam.

Vietnam is pushing ahead in its mission to become the ideal manufacturing hub for overseas investors by taking advantage of a largely pandemic-free landscape and building on 2020’s successes.

Industrial property continues dominating the market thanks to the fast growing manufacturing industry.

Vietnam will see strong growth in industrial property next year due to higher demand for industrial parks as business expand production or relocate out of China, according to Savills Vietnam.

The increasing demand and the drying up of land banks in industrial zones has bumped up rental prices in first-tier property markets in Vietnam.

It has been a tough year so far for property investors, but one segment is weathering the storm better than most: industrial property.

“Someone said the land rent in IZs has surged to $150-200 per square meter. But rent of $100 is considered high already,” said Do Nhat Hoang, director of the Foreign Investment Agency (FIA).

Despite the COVID-19 outbreak piling pressure on the toughest segments of the real estate market in hospitality, retail, and industrial property, positive signs have also been unearthed.  

The coronavirus outbreak will certainly have an effect on the global economy in the coming months. Vietnam, with its proximity and close trade and supply relationships with China, is no exception.

The industrial property landscape in Vietnam is changing with localities looking at raising costs of land. 

VietNamNet Bridge - Analysts believe that 2019 will be the year of industrial property, with a new infusion of FDI inflow.