Demand for industrial land in southern Vietnam skyrockets

By Dat Nguyen   September 6, 2019 | 12:08 pm GMT+7
Demand for industrial land in southern Vietnam skyrockets
Bau Bang Industrial Park in Binh Duong Province. Photo courtesy of Becamex IDC.

Demand for space in southern industrial parks has surged in the first half of this year as foreign firms expanded production.

The occupancy rate in Ho Chi Minh City parks rose by 24 percentage points year-on-year to over 90 percent, and rents are around $150 per square meter per year, highest anywhere in the country, according to a recent report by real estate firm Savills.

Neighboring Binh Duong Province saw occupancy increasing by 28 percentage points to 97 percent despite a 55 percent jump in rentals to $102.

In Dong Nai Province, both occupancy and rental rose 21 percent, while Tay Ninh Province on the Cambodia border saw occupancy rise by 64 percent and rents by 31 percent.

Interest in Vietnam’s industrial real estate market is now at all-time high because of foreign companies’ increasing investment, the report said.

The pledged FDI in manufacturing in the first six months rose by 40 percent year-on-year to $13.1 billion, accounting for 71 percent of total pledges, according to the Ministry of Planning and Investment.

The U.S.-China trade war has seen companies move or consider moving their production from China to Vietnam, increasing demand for industrial land.

Investment management firm VinaCapital said in a note in July that at least five companies had moved a part of their production from China to Vietnam, and another eight, including Chinese supplier GoerTek and Chinese TV maker TCL, were in the process of moving.

Eight companies, including giant Taiwanese contract manufacturer Foxconn and Japanese electronics firm Sharp, were considering moving, it added.

Vietnam had 251 industrial parks as of the first half of this year, and 75 more are under construction or acquiring lands.

 
 
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