According to JLL's Vietnam Real Estate Market Overview report in the fourth quarter of 2021, the reopening after the fourth wave of Covid-19 and the resumption of industrial activities helped southern land prices recover, reaching 117 USD/m2, up 7.3% year on year.

At the same time, rent for ready-built factories increased by 4.9%, reaching a new peak of 4.7 USD/m2/month, of which the largest increase was in Long An.

"The fact that the industrial zones in Binh Duong and Dong Nai have almost been filled, and at the same time, the infrastructure connection from Long An to Ho Chi Minh City has improved, making producers pay more attention to Long An, creating opportunities for the price of land and ready-built factories here to escalate," said experts at JLL.

Lack of supply, occupancy rate up

According to JLL, in the fourth quarter of 2021, due to the heavy impact of the pandemic, the industrial land market had no new supply.

The total area of leased land in Ho Chi Minh City, Binh Duong, Dong Nai, Ba Ria - Vung Tau and Long An remained at 25,220 hectares. This year, Nam Tan Lap Industrial Park (Long An) and VSIP III Industrial Park (Binh Duong) are expected to open, helping Binh Duong and Long An continue to be vibrant markets in the region.

As for the ready-built factory segment, although there is only one new project in Nhon Trach, Dong Nai, many new projects have begun and are expected to hit the market within the year. By the end of 2021, the total supply of ready-built factories reached about 3.3 million m2.

Notably, the occupancy rate of industrial zones and ready-built factories in the South increased, reaching 90% and 86% respectively.

In Hanoi, Hai Phong, Bac Ninh, Hung Yen and Hai Duong, the occupancy rate grew rapidly from 72% in the third quarter to 80% in the fourth quarter. The ready-built factory segment also increased strongly, reaching 95.6% when domestic enterprises resumed operation following the recovery of the economy.

Industrial land price grew steadily by 7.1%, reaching 110 USD/m2, while ready-built factories for rent recorded a good growth momentum compared to the third quarter of 2021 and increased by 4.9% over the same period of 2020.

According to JLL, key industrial zones in the North are still promising destinations for investors. The industrial real estate market in the North is still bustling with new projects including Yen Phong II-A Industrial Park (Bac Ninh), Vietnam - South Korea economic cooperation industrial park belonging to the Ly Thuong Kiet industrial park and service complex (Hung Yen), the Lach Huyen non-tariff - logistics and industrial zone (Hai Phong). The total area of industrial land for lease in the North in the coming time is expected to reach more than 10,200 hectares.

Meanwhile, the ready-built factory market had new source of supply in the Nam Dinh Vu Industrial Park with an area of 62,000 m2, bringing the area of this segment to nearly 2.2 million m2 in the fourth quarter of 2021.

In general, Long An, Ho Chi Minh City and Binh Duong are still in the top 5 in the country in terms of attracting foreign investment, proving the strong attraction of the southern provinces to investors.

JLL forecasts that this year, besides traditional industry, the pharmaceutical, medical device and data center industries will be the new growth drivers for the market.

The logistics market will also be active, with investors stepping up their search for land to build logistics infrastructure to serve the e-commerce market and foreign investors.

"Due to great demand from domestic and foreign businesses, many real estate developers are paying special attention to industrial land to build high-quality warehouses and factories, not only in provinces and cities in the Northern key economic region but also in neighboring localities such as Bac Giang, Thai Nguyen and Vinh Phuc,” the JLL report said.

Mai Lan

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