Demand for industrial lands sluggish

In the north, Hanoi saw no growth in rents this year, while Hai Duong and Hai Phong posted increases of 3 percent and 4 percent, according to the real estate consultancy’s Vietnam Industrial Whitepaper 2021.

Occupancy rose by just 1 percent in Hanoi and Hai Phong, while in Hai Duong the rate was 5 percent.

In the south, in Binh Duong, rentals rose by percent and occupancy fell by 8 percent.

In Dong Nai, lease prices increased by 6 percent in and occupancy by 1 percent.

"With international investors and tenants unable to visit, choose properties or sign lease contracts, industrial developers have not leased as much property as they had hoped this year," John Campbell, manager of industrial services at Savills, said.

However, developers believe 2022 would be more fruitful in terms of leasing and tenants and investors would have a choice of new supply when the restrictions are lifted, the report said.

In the first half this year, Vietnam became the second largest exporter to the U.S. after China after its exports rose for five years until 2020, when Covid hit.

"Vietnam is one of the most cost-efficient markets for industrial construction costs," the report said.

Manufacturing salaries in Vietnam reached an all-time high of $315 per month in the first quarter of this year, but still remained regionally competitive.

The comparative figures were $1,072 for China and $968 for Malaysia.

The country has 286 operational industrial parks.