Industrial property market heats up on trade recovery

HCM City – The industrial realty market has recorded robust development on the back of recovering foreign trade which grew 15.7 per cent year-on-year to 368.53 billion USD in the first half of the year, insiders have said.

Deputy Director of property consulting firm CBRE Vietnam Pham Ngoc Thien Thanh said that as much as 10.8 billion USD in foreign direct investment was disbursed during the six-month span, the highest figure recorded in the past five years, highlighting construction was kicked off on large factories across the nation such as Pandora in Binh Duong province, Suntory Pepsico in Long An province, and SK in Hai Phong city, which is seen as a positive sign of the industrial property market.

According to the company, the occupancy rate in the southern market remained stable at 89 per cent while over 259 hectares of land were rented during January - June. Producers tended to expand operations in Long An and Ba Ria - Vung Tau provinces, where industrial land remains abundant and rental prices are more competitive than other Tier-1 markets.

Meanwhile, real estate services firm JLL held that the domestic market continued to be the motivation for warehouse demand, with the net absorption being nearly 16,000 square metres in Q2, nearly tripling the amount in Q1.

Average warehouse rental prices in the southern region were stable, at 4.5 - 4.9 USD per square metre per month in the first half, a year-on-year pickup of 2 per cent for warehouses and 1 per cent for workshops.

Demand for ready-built facilities came from high-tech producers, renewable energy firms, and e-commerce enterprises.

In the next three years, rentals for industrial land are expected to grow 5 - 8 per cent in the north and 3 - 7 per cent in the south, with those of ready-built warehouses/workshops forecast to rise 1 - 4 per cent.

CBRE Hanoi Branch Director Nguyen Hoai An said the industrial realty market is expanding to new regions like Tier-2 markets and border gate economic zones thanks to the development of transport infrastructure. With the business expansion of current investors and participation of new ones, the market will become more dynamic in the coming time.

Commenting on the market prospect, head of Research and Consulting Services at JLL Vietnam Trang Le said around 100,000 square metres of facilities will be completed in the second half of this year while key players, namely the BW Industrial Development JSC and the Vietnam Industrial Park Investment Joint Stock Company, continue launching new projects in the market.