(Photo: Ngoc Lan)
Promoting Vietnam’s process of industrialization and modernization as well as enhancing the attraction of FDI during the process will result in the country’s industrial real estate market seeing strong growth momentum in the time to come.
This was the main topic of discussion at the “Vietnam Industrial Property in 2019: New Context - New Policy - New Opportunities” forum held by the Vietnam Real Estate Association (VNREA) in cooperation with the Central Institute for Economic Management (CIEM) at the Ministry of Planning and Investment (MPI) on April 23 in Hanoi.
Mr. Nguyen Tran Nam, Chairman of VNREA, said that Vietnam has been growing and continues to grow into a major destination attracting investment in the manufacturing industry in Southeast Asia, with investors having greater belief in its industrial real estate market. “Industrial real estate is therefore considered to be the most attractive segment in 2019 as well as in the medium and long terms,” he said.
Similarly, Mr. Nguyen Dinh Cung, Director of CIEM, said the attractiveness of Vietnam’s industrial real estate market is currently higher than the regional average and continues to be driven by factors such as low production costs (less than $1 per hour - the lowest in ASEAN), low labor costs, and reasonable land rentals.
He added, however, that the development of Vietnam’s industrial real estate market is still inadequate. “Infrastructure for multimedia connections lacks synchronization, infrastructure at factories has low technical standards, the contribution of industrial parks and economic zones to GDP is not commensurate with potential, and the policy orientation of the State is not clear or strong enough to support investors and promote the market’s development,” he said.
Mr. Tran Quoc Trung, Deputy Director of the Department of Economic Zone Management at MPI, said it is necessary to study, build, and diversify models of industrial zone development, such as ecological industrial parks, industrial parks linking sectors, support industrial parks, and specialized industrial parks according to sectors. “At the same time, it is necessary to complete the provisions of the law on industrial, urban, and service models to synchronously develop technical and social infrastructure,” he noted.
According to Mr. Nam, to continue attracting quality FDI inflows, thereby creating momentum for industrial real estate to break out and develop towards sustainability and efficiency and meet requirements in the new context, the government should focus on innovating thinking and management methods and improving the capacity and efficiency of State management over the real estate market in general and industrial real estate in particular, based on the market mechanism and international practices in line with Vietnam’s circumstances.
