return icon

Industrial real estate market hit hard by fourth Covid wave

The latest Covid-19 outbreak, which began in late April, has slowed down the industrial real estate market. There have been only small-scale projects and no large scale one announced.



After a series of large projects were announced in late 2020 and early 2021, including the additional investment of LG Display and the landing of Foxconn and Pegatron in the industrial zones (IZs) in the north, the industrial real estate market has turned gloomy since then.

In the north, the occupancy rate in IZs stayed at 75 percent, while ready-built workshops witnessed reductions in occupancy rates compared with the first quarter of the year as the market welcomes new supply.

Small and medium enterprises (SMEs) are believed to bear the biggest impact of the pandemic with the number of SMEs suspending operation in the first half of the year increasing by 22 percent compared with the same period last year. Of these, the enterprises in the manufacturing and processing sector account for 11.9 percent. This is an important factor that affects the occupancy rate of ready-built workshops.

According to JLL, the fact that IZs in the provinces of Bac Ninh and Bac Giang had to stop production temporarily also restrained the rise of industrial land prices.

The land rent stayed at $107 per square meter for the leasing cycle in Q2 2021, though it represented the 5.9 percent increase over the same period last year. However, the increase has slowed down.

The rent of ready-built workshops have also seen the slighter increase of 4.7 percent compared with the same period last year.

The same situation was seen in the south. The owners of IZs in the south have set up a new peak price of $113 per square meter, an increase of 7.1 percent over the same period last year. Meanwhile, the average rent of ready-built workshops was $4.5 per square meter a month for the whole region, just increasing by 0.5 percent. The slight increase was attributed to the pandemic outbreak.

However, a lot of transactions were wrapped up in Ba Ria – Vung Tau despite the pandemic outbreak. The clients were mostly heavy industry manufacturers which need large land banks. The occupancy rates of land in IZs and ready-built workshops were 85 percent and 86 percent, respectively.

The continued transactions of industrial land showed that both leasors and leases have found a solution to keep production during the pandemic. Meanwhile, ready-built workshops see business expansion of existing enterprises, rather than new enterprises.

The market of industrial land for leasing in the north has new supply from Yen My IZ in Hung Yen, developed by Viglacera Yen My. The supply source raised the total industrial land area for leasing in the north to 9,700 hectares. Viglacera also plans to kick off the Thuan Thanh I IZ project in Bac Ninh in 2021.


The market of industrial land for leasing in the north has new supply from Yen My IZ in Hung Yen, developed by Viglacera Yen My. The supply source raised the total industrial land area for leasing in the north to 9,700 hectares.


The ready-made workshops market has also welcomed new supply, mostly in Hai Duong, raising the total supply floor area in the north to 1.9 million square meters.

The market recorded some merger and acquisition (M&A) deals in Q2, including one in which Boustead Projects bought 49 percent of shares in KTG Industrial Bac Ninh Development JSC in Yen Phong IZ at $6.9 million.

Meanwhile, the market of industrial land in the south has new supply in Tran Anh Tan Phu IZ in Duc Hoa district in Long An province, developed by Tran Anh Group. With the project, the total industrial land area for leasing in the south has increased to 25,220 hectares, while Long An has confirmed its position as another attractive investment destination, in addition to Binh Duong and Dong Nai.

The news that Pegatron would increase its investment capital in Vietnam following the project in Hai Phong City was a positive sign about the real estate market, though the information has not been confirmed.

In addition to the Red-river Delta provinces, the provinces in the Northeast, such as Bac Giang, Quang Ninh and Thai Nguyen, are attracting investors thanks to low rent and improved infrastructure.

The land prices in the region are predicted to continue increasing by 8-10 percent compared with the same period last year. The market of ready-built workshops is also believed to be bustling in the Northeast with a lot of new investors joining the market, including GNP Industrial and KCN Vietnam Industrial JSC.

Vietnam has been recognized as controlling the Covid outbreak well, which further strengthens investors' confidence in the business environment.

Provincial authorities have built and upgraded infrastructure systems, including the Phan Thiet – Dau Giay, Bien Hoa – Vung Tau and Ben Luc – Long Thanh Highways.

It is expected that 940,000 square meters of ready-made workshops in the south will be marketed by the end of 2021. 

Duy Anh

Foreign investors attracted to industrial property

Foreign investors attracted to industrial property

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.

Multinationals may hesitate to enter Vietnam because of rising land rent

Multinationals may hesitate to enter Vietnam because of rising land rent

Rising land rent and shortages in industrial zones (IZs) may cause multinationals, which are seeking land near Hanoi and HCMC City, to hesitate to come to Vietnam.


Power shortage worries increase hunger for coal

Vietnam is maximising its coal mining output amid widespread power outages in the north.

Indicators ripe for wave of tech startup successes

Venture capital investment flows into Vietnam, particularly from Singapore, are on track to surpass the previous level, propelled by the country’s buoyant tech startup scene.

Tourism industry faces serious labor shortage

Because of low pay, many workers have left the tourism sector.

Industrial parks, economic zones absorb US$ 230 billion in foreign direct investment

Industrial parks (IPs) and economic zones (EZs) across the country have attracted nearly 11,000 foreign direct investment projects worth US$230 billion, according to Deputy Minister of Planning and Investment Tran Quoc Phuong.

Property, fishery sectors face hardship as credit chokes

At a government-to-business conference held yesterday, representatives of business associations expressed their concern over being unable to access bank loans as banks are running out of credit growth quotas.

Utilising every opportunity to grow and overcome challenges

That is the message and guideline of Minister of Planning and Investment Nguyen Chi Dung at the national conference on how to sustainably develop.

Outbound tours to Europe rocked by passport tangle

A number of Vietnamese outbound travel companies have already been affected by the decision of some European nations to not recognise Vietnam’s new passports.

Young people discover the universe via telescopes

Many young people have been spending time and money to buy telescopes and build rooftop observatories to admire the wonders of the universe.

Ample room remains for Vietnam’s exports to EU

There is still a lot of room for Vietnamese goods to expand their presence in the European Union (EU) market, but accessing its retail distribution systems is extremely important, heard a seminar in Ho Chi Minh City on August 11.

Vietnam yet rolls out Covid jabs for under-5s

Vietnam has yet planned to get younger kids aged under five vaccinated against COVID-19, according to the Ministry of Health (MoH).

Vietnam to host Mekong Tourism Forum in October

Vietnam is scheduled to host the 2022 Mekong Tourism Forum, themed “Rebuild Tourism, Rebound with Resilience”, from October 9 – 14, the first in-person meeting of the six Greater Mekong Subregion (GMS) destinations since the pandemic began in 2019.

Cryptocurrencies show high risks

Even though cryptocurrencies are not legally recognized in Vietnam, they have gradually become popular due to unlawful trading via specific platforms.

Pandemic-hit labourers continue to receive financial support

The Unemployment Insurance Fund plans to pay out 1.15 trillion VND (49.15 million USD) to support labourers affected by the COVID-19 pandemic, according to a resolution issued by the National Assembly (NA) Standing Committee.

Seven petroleum wholesalers’ licenses suspended

The Ministry of Industry and Trade suspended the operating licenses of seven key petroleum import and export businesses after inspecting 33 wholesalers in February this year.

President reduces death penalties to life sentences for 21 prisoners

President Nguyen Xuan Phuc on August 12 decided to reduce death penalties to life sentences for 21 prisoners, including two foreigners.