Investors upbeat about Vietnam’s industrial property market

The market showed signs of recovery in the third quarter with increases in both supply of warehouse and rental prices in the south. Some 92,000 square meters of ready-built factories and 174,400 square meters of ready-built warehouses were launched, up 2% and 3%, respectively, from the previous quarter.

The net absorption of industrial land during July-September was 83 hectares, up 14.7% against Q2. Long An, Ba Ria – Vung Tau and Binh Duong provinces emerged as bright spots in investment as they lured various enterprises operating in different industries.

Knight Frank held that the development of new industrial parks is expected to enhance the South's attractiveness to investors.

In the North, leasing prices for ready-built warehouses averaged 5 USD per square meters per month, up 0.6% quarter-on-quarter and 3.4% year-on-year, reflecting the growing demand for modern and high-standard industrial space.

Bac Ninh has been a hotspot for industrial property leasing, boasting a strategic location and robust infrastructure. The first phase of the Industrial Centre Yen Phong Expansion is under construction while KTG Industrial Yen Phong have lured tenants from various sectors.

In the meantime, BWID ESR Nam Dinh Vu industrial hub in Hai Phong city added more than 70,000 square meters of warehouses to the market.

Despite a surge in supply, the northern industrial zones recorded high occupancy rates, averaging about 90%.

It is positive to see continued construction of ready-built factories, enhancing investment choices when considering Vietnam a destination to start or expand operations. Landlords are competing with each other which invariably creates a good environment for occupants and encourages growth.

The range of products now available is significant and includes developments with environmental accreditation which brings Vietnam more in line with global supply chain requirements, said Alex Crane, Managing Director of Knight Frank Vietnam.