The trade war has brought great opportunities to Vietnam to receive a new wave of investments in industry sector, said Troy Griffiths, Deputy Managing Director at Savills Vietnam. He expected the occupancy rate in local industrial zones (IZs) and land leasing would rise this year.
Another real estate consultancy firm JLL Vietnam said the Eastern part of the Southern region is now the country’s fastest growing industrial property market, with 75 percent of land occupied.
Meanwhile, the Northern industrial property market is expected to witness bigger changes thanks to its close proximity to China, therefore, it is more favorable for the workshop relocation. Northern cities/provinces like Hai Phong, Quang Ninh, Hung Yen, Bac Giang, Bac Ninh may become the new destinations for investors and firms.
Nam Tan Uyen industrial zone in Binh Duong province.
Firms that would see the biggest benefits include Kinh Bac Urban Development, Viglacera in the North, and Nam Tan Uyen IZ, Long Hau IZ in the South, Rong Viet Securities forecast.
Specifically, Viglacera owns 911 hectares of land for lease, while Kinh Bac offers 843 hectares in Hai Phong, Bac Ninh and Bac Giang, where the demand is always high.
However, experts have warned developers of industrial zones that the conditions will be not favorable for them.
Site clearance is one of the biggest problems for IZ developers. Cost of site clearance normally accounts for 40-55 percent of total investment costs.
Due to bottlenecks in site clearance, developer of Long Hau 3 IZ in Long An province may not offer 90 hectares of land for lease, while the demand for land lot there is high thanks to advantageous location.
Covering an area of 255 hectares, Nam Tan Uyen 3 IZ in Binh Duong province officially got a license in Sep 2018. The IZ is expected to be the major driving force for its developer’s growth in the next 5 years. Bright prospects have raised prices of Nam Tan Uyen up by 50 percent since last August.
Land rent at Dong Nai province’s Giang Dien IZ has increased to $90 per sqm from $70 recorded last year.
Analysts have warned of risks that IZ developers may face once the trade war cools and foreign investors cancel their plans of relocation to Vietnam.
