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IZs and office/apartment market receiving more foreign capital

The land rent in industrial zones (IZs) has been increasing, while offices and apartments are believed to escalate soon. The real estate has heated up on the good news about TPP and other free trade agreements (FTAs).
VietNamNet Bridge - The land rent in industrial zones (IZs) has been increasing, while offices and apartments are believed to escalate soon. The real estate has heated up on the good news about TPP (Trans Pacific Partnership Agreement) and other free trade agreements (FTAs).


The land in IZs heated up soon after the news about the end of TPP negotiations was released. 

Thai Van Men, CEO of Tan Tao Group, said Tan Tao is following necessary procedures to lease 6,000 square meters of land in Tan Duc IZ in Long An province to an investor from the US who will set up a garment factory there. The investor said he may consider to lease more land in the IZ in the future.

“We plan to receive another big investor this week. With the current high demand, our 160 hectares of land left in Tan Duc IZ will be fully occupied in one or two years,” Men said.

Viet Huong Group’s President Hang Vay Chi said Viet Huong began preparing to grab the opportunities to be brought by TPP one year ago by spending $60 million to expand its textile & dyeing workshops and seeking to purchase land for production premises. However, Chi was still a bit too late.

According to Vu Van Hoa, head of the HCM City IZ and Export Processing Zone (EPZ) Board of Management (Hepza), some months ago, an investor from Hong Kong invested $300 million to build a textile & garment company in Tay Bac Cu Chi IZ as soon as it got an investment license. This shows the demand for land lease from investors.

CBRE Vietnam, a real estate service consultancy firm, noted that TPP will encourage investors to push up their investments into Vietnam, especially investors from the countries which import many products from Vietnam such as the US and Japan.

The investors would benefit from low tariffs. IZs in the south will be the favorite destinations for investors.

Meanwhile, many multinational groups are considering relocating their factories from non-TPP countries to Vietnam to be able to enjoy preferential tariffs. This will lead to a sharp increase in the demand for land. IZ developers are expected to be the biggest beneficiaries from the investment wave.

Meanwhile, other real estate market segments will be able to ride on the wave. 

The latest report by Savills Vietnam, also a real estate consultancy firm, showed that multinational groups have high demand for A- and B-class offices over 700 square meters. However, the supply is still limited, especially in central district 1.



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