While most industrial zone (IZs) and export processing zone (EPZ) developers in Ho Chi Minh City and other Southern provinces prioritize leasing large-area premises (at least 3,000 sqm), Kizuna JV leases small-scale ready-made workshops.
The firm utilizes new technology to design workshops to the orders specified by clients. There is no need to destroy walls to change workshops’ structure or remove supporting works. With this way of execution, its Kizuna 3 workshop area in Tan Kim commune of Can Giuoc district in Long An province can satisfy all requirements, even a small area of 80-100 sqm.
Build-to-suit mini workshops are favored by foreign companies.
At present, Japanese occupy 45 percent of three Kizuna areas, and South Koreans 35 percent, while English speaking and Vietnamese investors are leasing the remaining 20 percent.
The areas only lure investment in clean and green industries, including electronics, precise mechanics, high technology, fashion, cosmetics, healthcare and packaging.
On average, land rent in Kizuna is $4.4 per sqm, about $1 higher than the rent applied in other IZs. However, Dung affirmed that the high rent is justified.
Attracted by initial achievements, Dung plans to build multi-story workshops and accept payment by installments to lure more investors.
Deputy CEO of Savills Vietnam, Troy Griffiths, forecast a bright prospect for the IZ real estate market in Vietnam in the context of the FDI boom.
The increased number of foreign invested enterprises in Vietnam has led to increasingly high demand for specifically-built workshops that can satisfy specific requirements of investors and optimize the use, he said. That is the reason why more and more build-to-suit IZ workshops, with different area levels from 500 to 2,500 square meters have appeared.
For example, the groundbreaking ceremony of the first multi-story workshop complex in Long An province, developed by Long Hau JSC took place in mid-March. The six-storey 6,000 square meter workshop area is expected to be completed by November 2019.
The kind of workshops are built flexibly as demanded by investors to meet standards and fit the uses of different production fields. Since the workshops are ready made, it does not take investors much time to prepare before starting production.
A recent report quoted by Bnews showed Vietnam has 80,000 hectares of land to reserve for IZ development in the three major economic centers in three major regions of Vietnam.
One of the reasons behind the strong rise of Vietnam IZ real estate is the lower production cost, less than $1 per hour, the lowest level in ASEAN and lower than China, said the report.
