return icon

Strong supply keeps pouring into the industrial market: JLL

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.


Thang Long II Industrial Zone in My Hao District, Hung Yen Province. 


The provincial governments have shown further plans to establish new IPs of roughly 23,400 ha in the future, which are all in notable markets surrounding HCM City. The ready-built factory market was also buoyant, with the expected new launch of roughly 897,000 sq.m of ready-built factories by the end of 2021.

Nguyen Hong Van, JLL Vietnam’s Director of Markets, said since technology conglomerates continue to eye Vietnam for production relocation, the demand for industrial land and ready-built factory remains vibrant.

To lure foreign investments, localities in the Northern area have shown strong commitment to promote IPs, with roughly 10,500 ha of additional supply in the future, she said.

In addition to existing markets, second-tier provinces like Hung Yen, Hai Duong or further North of Hanoi like Bac Giang and Vinh Phuc are emerging as potential destinations for foreign investors, fostering the rents in those areas to speed up at an expected year-on-year growth of about 8-10 per cent.

The ready-built factory market remains upbeat, with the expected new launch of roughly 332,000 sq.m of ready-built factories by the end of 2021, predominantly in Hai Phong and Bac Ninh.

According to JLL Vietnam’s quarterly report on Vietnam’s property market in the first quarter of this year unveiled on Thursday, Dong Nai and Binh Duong accounted for the biggest supply of both industrial land and ready-built factory sectors on the property market in the first quarter of this year.

The other localities still have a long journey to catch up to Binh Duong and Dong Nai’s industrial park supply as these two are the oldest-developed industrial markets. Whilst in terms of ready-built factory supply, Dong Nai overwhelmed other provinces due to its well-developed industrial base and sufficient land bank for ready-built factory developers to penetrate, Van said.

However, the report said that no new supply of either industrial parks or ready-built factories was launched in the market in the quarter, she said.

Industrial properties in the Southern area remained significantly desirable for manufacturers to penetrate, although the pandemic still posed difficulties. Keeping the healthy demand momentum, both industrial land and ready-built factories recorded high occupancy rates at nearly 86 per cent and 82 per cent, increasing 0.60 per cent and 0.76 per cent compared to the fourth quarter of 2020, respectively. Of which, industrial land recorded transactions which have been negotiated since last year, whilst ready-built factories witnessed new leasing expansions of existing tenants rather than newcomers.

Industrial land remained the hottest sector for either newcomers or to meet the manufacturing expansion needs of existing investors, backed by Vietnam’s strong manufacturing fundamentals, Van said.

Therefore, most industrial park developers in Southern markets still maintained strong momentum to raise land prices reaching a new high at US$111 per sq.m per lease term, up 8.1 per cent year on year in the first quarter of this year. Whereas ready-built factory rents averaged $4.5 per sq.m per month across the region, increasing 3.1 per cent year on year, driven by the healthy demands of small and medium-sized enterprises as they expanded operations.

According to JLL Vietnam, in the first quarter, no new supply in industrial land and ready-built factories were introduced in the Northern market. The cumulative leasable land area in the market achieved roughly 9,500 ha, while the total supply of ready-built factories stood at approximately 1.8 million sq.m.

Bac Ninh and Hai Phong dominated the total supply in both sectors thanks to their strategic locations, strong footprints in the industrial market and improving business environment.

The third wave of COVID-19 swept the Northern area in late January has led to the postponement of new investments in the region, especially the lockdown in Hai Duong freezing most of the transactions in industrial parks in the first quarter.

Nevertheless, thanks to the strong influx of FDI in high-tech industries starting in the second half of 2020, the average occupancy rate of industrial parks recorded a healthy rate, reaching 75 per cent, whereas the occupancy rate of ready-built factories stood at 98 per cent in the quarter.

Given healthy demand, backed by Vietnam's strong industrial fundamentals and combined with industrial park developers’ strong confidence in potential long-term investments, the land price continued its momentum to reach a new peak of $107 per sq.m per lease term in the first quarter, up 8.1 per cent year on year.

Meanwhile, ready-built factory rents also showed an increasing trend, at 5.8 per cent year on year, of which Bac Ninh recorded the strongest growth rate of nearly 9 per cent year on year fuelled by the launch of high-quality ready-built factories.  


Demand for industrial land rising: Savills Vietnam

Demand for industrial land rising: Savills Vietnam

The sudden increase in demand for land, factories, and warehouses in Vietnam has pushed up rental costs at industrial parks (IPs) near major cities, according to Savills Vietnam.

Industrial real estate is bright spot in 2020 market

Industrial real estate is bright spot in 2020 market

The industrial market is the only real estate sector that has enjoyed positive progress in both rental rates and occupancy rates during the COVID-19 pandemic.


16 Vietnamese designers to open Thailand Fashion Week 2022

A fashion collection by 16 young Vietnamese designers is set to open Thailand Fashion Week 2022 for the first time, with the outfits on show featuring images of Vietnamese cultural heritages.

The man who helps Vietnamese find their biological parents

Do Hung Phuc’s joy is to help those who lost their parents at birth to find their roots. In three years, the young man has created many magical and emotional reunions.

US increases coffee imports from Vietnamese market

The market share of Vietnamese coffee as part of the United States’ total imports increased from 8.95% to 9.6% during the opening four months of the year, according to statistics compiled by the General Department of Vietnam Customs.

Teenager specializes in diaphonization of animals

Two years ago, after he saw images of diaphonized specimens on the internet, Nguyen Tien Minh Duy, 15, from Buon Ma Thuot City began searching for information and learning about diaphonization.

Universities use ‘conflicts’ to help students learn more about business

Future schools need to be good at designing experiences for students to help them in their career and purpose, Lee Newman from Spain’s IE University said in an interview with VietNamNet.

Famous painter Bui Xuan Phai's works on display for first time

Sixty works by late famous painter Bui Xuan Phai, many of which were created toward the end of his life, are on display in Ho Chi Minh City.

5-year-old Hanoian conquers highest mountains in Vietnam

Dang Quang Vinh, together with his parents, has climbed the five highest mountains in Vietnam, including Lao Than, Lung Cung and Nhiu Co San, which even adults dare not climb.

Belgian comic artist, musician to attend Hue Festival 2022

Belgian comic artist Dany and musician-singer Konoba will represent artists from the Wallonie-Bruxelles region at Hue Festival 2022, according to the Wallonie-Bruxelles delegation in Vietnam.

Family has 3 kids with small stature

The family of Doan Thi Nhan in Hoang Viet hamlet, Tan Phuoc commune of Tan Hong district in Dong Thap, in the Mekong Delta, has a number of children with small stature.

Vietnamese player wins first int’l badminton title at Croatia Open

Vu Thi Anh Thu of Vietnam secured a gold medal in the Croatia Open badminton tournament on June 23 in Dubrovnik.

Face masks and community immunity

Recently, I visited a government agency. The security guards, who were not wearing face masks, did not allow me to enter the agency because I did not have a mask.

Indian naval ships start three-day visit to HCM City

Two Indian naval ships carrying with more than 500 crewmembers arrived at Nha Rong Wharf on June 24, beginning a three-day friendship visit to Ho Chi Minh City.


Efforts made to boost seafood cooperation between Vietnam, India


NA Chairman Vuong Dinh Hue to begin European tour this weekend

World’s first zero-emission boat visits HCM City

Energy Observer – the world’s first hydrogen-powered, zero-emission vessel that is self-sufficient in energy – continues its journey in Southeast Asia, with the 73rd stopover of its round-the-world Odyssey being in Ho Chi Minh City, Vietnam.