Foreign investors invest heavily in industrial parks

At the end of the first quarter, Fuchs Group, a German lubricant giant, announced its expansion of operations in Vietnam with the move of renting a 20,000 m2 land area at Phu My 3 Specialized Industrial Park (PM3 SIP) in Ba Ria – Vung Tau. Ship to build new factory.

With a 55-year lease, the German lubricant manufacturer with over 90 years of experience shows its long-term commitment in Vietnam. Mr. Kazama, Deputy General Director of PM3 SIP, said that Fuchs Group is the second European company in PM3 SIP, opening up an opportunity to attract other Western investors who want to join this coastal industrial park.

In February, the industrial real estate market recorded a factory lease deal between Framas and KTG Industrial. Framas, Germany’s leading injection molding machine manufacturer, has leased a 20,000 square meter prefabricated facility at KTG Industrial Nhon Trach 2, Dong Nai province, for a 10-year lease term.

On February 17, LOGOS and Manulife Investment Management established a joint venture to acquire a modern, built-to-suit logistics factory with a total area of ​​116,000 m2 with an investment value of $80 million.

CapitaLand Development also signed a memorandum of understanding to invest USD 1 billion with Bac Giang province to develop CLD’s first industrial park, logistics area and urban area in Vietnam. Along with that, BW Industrial Development Joint Stock Company acquired DEEP C Industrial Park with a scale of about 74,000 m2 in Bac Tien Phong Industrial Park, Quang Ninh province.

In the first two months of the year alone, Thai Nguyen attracted US$924 million in FDI, accounting for nearly 18.5% of the country’s total FDI in the period. Prominent among them is the additional capital of 920 million USD of Samsung Electro-Mechanics Vietnam Co., Ltd., belonging to Samsung Group (Korea). As a result, the total investment capital in Yen Binh Industrial Park in Pho Yen town, Thai Nguyen has increased to 2.27 billion USD (nearly 52 trillion dong).

Also in the first quarter, Denmark is the largest investor in the industrial capital of Binh Duong with a total investment of 1.3 billion USD, accounting for 78.9% of the total registered capital. In mid-March, Binh Duong awarded the investment certificate to LEGO Group of Denmark in VSIP III industrial park for a project with a total capital of more than 1 billion USD. This is Lego’s sixth largest factory globally and second in Asia (the first was built in Jiangsu, China).

The heat of the industrial real estate market continued to spread to the second quarter when at the beginning of April, Hoa Loi Group (HuaLi Group) signed an investment cooperation agreement with infrastructure investors WHA 1 and Industrial Park. Hoang Mai Industrial Park I.

In Hoang Mai I Industrial Park, a Taiwanese manufacturer built a footwear manufacturing and processing factory for export. The project will be started in June and completed and put into operation in March 2023. When the factory comes into operation, it will have an output of 25 million pairs of products a year, creating jobs for about 16,000 workers.

In WHA Industrial Park 1 – Nghe An, HuaLi Group built a factory on an area of ​​7.3 hectares with a total investment of 38 million USD. The project will start construction in August this year and complete and put into operation in June 2023. When the factory comes into operation, it will have an output of 13 million pairs of products a year, creating jobs for about 8,000 workers.

The massive influx of international investors into the industrial real estate market has pushed up industrial land rents further.despite the high price level in the past 2 years.

JLL’s industrial real estate market report in the first quarter of 2022 shows that industrial land prices still maintain a strong growth momentum (up 8.5% over the same period) thanks to the new wave of FDI pouring into Vietnam. after the restoration of flights and the opening of international borders. The average rental price of industrial land is 120 USD per m2 for the lease period.

JLL said that the ready-built factory market has moved to a larger scale to meet the needs of tenants, especially international customers who choose to lay a foundation or expand production in Vietnam but want to save money. Save time, costs and quickly get into operation.

Savill Vietnam confirmed, Vietnam has attracted a lot of international industrial real estate developers with new projects under construction in early 2022. Besides factories, another branch of real estate The data center and logistics industries are seeing an increase in high-quality investment. Many large US and European companies are looking for opportunities to enter the Vietnamese market at the step of in-depth research and analysis to choose the right location.

Mr. Trang Minh Ha, Chairman of the Board of Directors of North Stars Asia, said that the resumption of international routes and signed trade agreements are opening up great opportunities to attract foreign capital for industrial real estate. Vietnam in 2022.

Mr. Ha analyzed that Vietnam is the second country in Asia (after Singapore) in terms of number and coverage of world trade agreements. The total GDP of countries that have signed trade agreements with Vietnam accounts for 53% of global GDP.

He said that the US-China trade war and North Korea tension in previous years have created a trend for Korea and China to invest in Vietnam in the last 1-2 years. Singapore and the first Asian investor group in terms of newly registered FDI in the first months of 2022 could be an indirect investment channel of China into the Vietnamese market.

Vietnam also attracts a huge FDI inflow when the labor cost is only 60% of Thailand, 31% of Malaysia and 25% of China. Corporate tax in Vietnam is also the lowest in the region at only 20%, along with many tax incentives in each province for FDI enterprises. Taxes and labor are not the final advantages because in terms of industrial land rental costs, Vietnam is also very low compared to ASEAN countries.

In addition, according to Mr. Ha, the Government’s 350,000 billion support package to promote public investment in projects of North-South expressway, Long Thanh airport… will also help improve logistics costs in Vietnam significantly. thereby helping to increase investment prospects in industrial zones.

John Campbell, Head of Industrial Services at Savills Vietnam, said that Vietnam’s economy is forecast to grow positively in 2022 when domestic demand recovers and foreign investment inflows maintain an upward momentum. stable. In addition, business conditions have improved significantly in the past 5 months following the obstacles of the Delta mutant Covid-19 outbreak in 2021.

Mr. John Campbell forecasted that, along with the resumption of international flights to bring back international investors, the Government’s active support for foreign investors as well as the ability to recover and adapt. The good performance of domestic enterprises is opening a promising future of the industrial real estate market in 2022 and also in the coming years.

Vu Le