Industrial, apartment property in good shape: analysts

By Ngoc Diem   October 26, 2023 | 07:41 pm PT
Industrial, apartment property in good shape: analysts
Song Than Industrial Park in the southern province of Binh Duong. Photo by VnExpress/Quynh Tran
Industrial property will continue to thrive and the apartment segment’s recovery will gather pace in the remaining months of this year thanks to growing demand, analysts have said.

Property consultancy Savills Vietnam said it has been receiving an increasing number of inquiries about industrial property from manufacturers and logistics and cross-border e-commerce companies, indicating a growing interest in the segment.

There is also increasing interest among solar power producers from China and Singapore to set up plants in Vietnam.

China’s Trina Solar is the biggest among them with plans for a $275-million project in Thai Nguyen Province.

In the Mekong Delta, Singapore-invested Vietnam Singapore Industrial Park is building a park in Can Tho City, which will eventually spread over an area of 900 hectares.

Industrial parks are reporting a national average of over 80%, with some key localities in the north and south having 83% and 91% occupancy rates.

Industrial land lease has risen 30% year-on-year in the north and 15% in the south.

John Campbell, associate director of industrial services at Savills Vietnam, said the purchasing managers’ index and manufacturing growth in the third quarter showed promise, especially now that there are many different types of industrial property in the market to suit the needs of various customers.

Another property consultancy, CBRE Vietnam, forecast industrial land lease to grow by 6-10% a year in the north and 4-8% in the south for the next two years driven by rising demand, including from foreign investors.

The fact that Vietnam has strengthened ties with many countries such as the U.S., South Korea and China would continue to drive demand for industrial land, it said.

The apartment segment is set to see more signs of recovery in the last months of this year thanks to declining loan interest rates and more flexible sales policies from developers, CBRE said.

In the third quarter over 3,600 apartments were sold in Hanoi, a 1.5 surge from the second quarter and nearly as much as the third quarter last year.

There is a slight increase in supply with 4,500 apartments set to be launched in the remaining months of this year.

In HCMC over 2,600 apartments were sold, or 55% of new supply, a rate double that of the second quarter.

CBRE Vietnam executive director Duong Thuy Dung said that property transaction is set to improve as the year comes to an end. Some projects launched in July in HCMC actually recorded an absorption rate of 80-90%, she added.

The Ministry of Construction has said that apartment is the least affected property segment as there is high demand for it in recent years. The most sought-after apartments are in the range of VND2-4 billion per unit.

In the third quarter the number of commercial projects being completed triple from the second quarter, and over 8,000 units were ready to be sold, up 132%.

In the last quarter around 2,200 apartments will be launched in Hanoi, according to Savills Vietnam. The figure will rise to 52,000 units from now until 2025.

Property consultancy Cushman & Wakefield saw a 291% quarter-on-quarter surge in apartment supply in HCMC in the third quarter.

It said that the recovery of the market will be driven by improved policies and rising public investment.

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