Industrial land rents to rise 7-9% per year: forecast

By Ngoc Diem   April 16, 2024 | 09:54 pm PT
Industrial land rents to rise 7-9% per year: forecast
A view of an industrial zone in Binh Duong Province. Photo by VnExpress/Quynh Tran
Industrial land rents are expected to rise by 7% in the south and 9% in the north every year for the next three years, property consultancy CBRE has said.

Demand from various industrial sectors and foreign businesses would boost rents in the segment across the country, it said in its first-quarter report on the real estate market.

The potential for growth could be seen from the segment’s performance in the first quarter, it said.

In the north, average rents in top markets such as Hanoi and Hai Phong City and Bac Ninh, Hung Yen and Hai Duong Provinces increased by 7.8% year-on-year to $133 per square meter over the lease cycle.

The average occupancy rate at industrial zones also rose 1.3 percentage points to 83%, it said.

Meanwhile, in the south, industrial zones particularly in HCMC and Binh Duong, Dong Nai and Long An Provinces had an occupancy rate of 92%, the same as last year, and average rent of $189, up 2.4%.

With supply drying up in the top markets, more domestic and foreign enterprises would expand into new areas like Ba Ria-Vung Tau and Tay Ninh Provinces, driving up rents there,

Concurring with this, experts from real estate agency Avison Young said as more FDI flows into Vietnam, demand for industrial land across the country would rise, dragging up rents.

"HCMC, Da Nang and Hanoi are attracting more investment in high-tech fields such as semiconductor manufacturing and high-value industries that are less labor-intensive."

CBRE said other industrial real estate segments such as ready-built warehouses and factories also saw 2.2-3.9% hikes in rent and high occupancy rates of 57-87%.

The demand in these segments was mainly from manufacturers in high-tech, renewable energy and semiconductor materials such as Taiwanese energy firm JiaWei, VDL and Dutch drive motor producer Tecnotion, and e-commerce players such as Singapore’s Shopee, it said.

Looking at the next three years, rents of ready-built warehouses and factories across the country would likely see a 1-4% uptick per year, CBRE added.

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