Rents in industrial parks are on an upward trend

The recently released Savills Vietnam report shows that industrial real estate rental prices are still climbing during the new epidemic due to the dwindling supply of existing supply. The existing supply has almost filled the room and the new supply needs more. time to launch, has created leverage that causes industrial real estate rental costs to skyrocket. These indicate that the market is still in a high bull cycle.

The latest industrial real estate market data of this unit recorded an increase in occupancy rate in the Northern key economic area over the same period. Occupancy rates in Hanoi are up to 90%, Bac Ninh (up to 95%), Hung Yen (89%) and Hai Phong (73%). Meanwhile, the southern area recorded the occupancy rate in Ho Chi Minh City at 88%, Binh Duong at 99%, Dong Nai (94%), Long An (84%), Ba Ria - Vung Tau (79%). ).
With the expectation of import and export growth and domestic production, the demand for logistics infrastructure is being promoted, in recent years, the total observed warehouse area has increased significantly, and the price has increased. 5-10% per year. Meanwhile, the average rent for warehouses in the Northern and Southern Economic Regions in 2020 is 4.1-4.4 USD per square meter per month, respectively. In provinces like Long An and Binh Duong, new warehouse projects and distribution facilities are springing up as HCMC and Binh Duong face supply shortages.
Khu công nghiệp Tân Tạo. Ảnh: Quỳnh Trần.

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Although the cost of renting industrial land has increased, a report by Savills Vietnam from 54 markets in 21 countries shows that Vietnam is the place with the lowest operating costs in the ranking, becoming a very attractive destination. attract multinational companies. At the same time, since 2020, the Government of Vietnam has been planning to invest in infrastructure and industrial parks to attract businesses in the supply chain. Timely policies such as corporate tax exemption and reduction ensure competition in the region such as Indonesia, Thailand, and other Southeast Asian countries.
The fact that industrial parks do not have much-existing supply leading to an increase in rents also brings a positive business picture for industrial real estate giants despite the re-emergence of the pandemic and complicated developments. There are many signals that 2021 will be a bountiful year for industrial real estate developers who already have a large land bank.
Compared to the general level of the world, Vietnam is still considered a country with good disease control, and also benefits from the wave of investment shifts away from China. Therefore, the demand for industrial real estate increased, leading to better business result of some businesses in this industry in the first quarter of the past.
Kinh Bac Urban Development Corporation announced the consolidated financial statements for the first quarter of 2021 with a revenue of VND 2,002 billion, nearly 4 times higher than the same period in 2020, in which, revenue from land rental and transfer real estate accounted for more than 1,904 billion dong, up 3 times over the same period. This is the record quarterly profit achieved by this enterprise from the company's adjustment to update the cost price increase for the industrial park.
Another industrial real estate giant, Sonadezi, announced first-quarter revenue of VND 1,266 billion, up 14% over the same period, of which the industrial zone business alone reached more than VND 365 billion. In addition, other enterprises in the real estate industry group with high-profit growth during the same period include Tan Tao, IJC, and Nam Tan Uyen.
Mr. Troy Griffiths, Deputy General Director of Savills Vietnam confirmed when the US-China trade war has not shown any signs of cooling down, many companies have applied the China + 1 model to look for new locations to diversify. diversify and secure supply. With its adjacent location to China, as well as converging many strategic advantages, especially the very competitive cost of renting industrial real estate, Vietnam is being interested by many domestic and foreign businesses and considered as an alternative destination to China.
Mr. Troy Griffiths analyzed, Thanks to the Free Trade Agreement between Vietnam and the European Union countries EVFTA signed in August 2020, the cost of renting industrial land has grown quite steadily. The planned industrial parks are expected to be the objects to attract foreign capital in the coming time.
Through the Free Trade Agreement, the cooperation relationship between the European Union countries and Vietnam will be strengthened, promoting the recovery of the manufacturing industry after the quiet period caused by Covid-19. The free trade agreement will also provide additional impetus for the transition from low-value, labor-intensive and low-skilled industries to high-value industries.


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