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Welcoming the wave of FDI, industrial real estate rental prices soar

Ho Chi Minh City has the highest industrial land rental price

The Covid-19 epidemic under control has helped many Real estate market “heats up” after a long period of paralysis. The policy of opening the market, welcoming international visitors and experts along with the business’s need to expand production has helped many segments revive quickly.

According to Cushman Wakefield Vietnam, the real estate market is receiving many positive signals as rents continuously increase. As of May, Ho Chi Minh City is a locality with industrial land rental price the highest in the country, about to reach 200 USD/m2. Meanwhile, Da Nang and Hanoi respectively reached the highest level of 80 – 140 USD/m .2 one rental cycle.

According to experts, Ho Chi Minh City and neighboring provinces possess a lot of potential to attract investment as this is the most vibrant economic area in the country. At the same time, this is also a long-standing industrial center, with a large concentration of rubber, plastic, textile industries…

Accordingly, the industrial capitals of the South welcomes a large demand for high-quality ready-built factories and warehouses with related services from newly established small and medium enterprises in this area.

The wave of FDI landed, the rental price of industrial real estate in Ho Chi Minh City increased - Photo 1.

P.HCM is the locality with the highest industrial land rent in the country. Photo: HT

Meanwhile, the report of Jones Lang Leasalle (JLL) also said that Ho Chi Minh City is leading industrial land rental price the whole country with an average rent of 120 USD/m2 for the entire lease period, up 9% year-on-year.

The annual rental rate growth rate of the industrial capitals in the South has always reached 8-9% a year in the past few years. With the land fund of industrial parks in Ho Chi Minh City not much left, Binh Duong, Long An and Dong Nai have become hot spots to attract investors to industrial parks.

Mr. John Campbell – Deputy Director of Industrial Services Savills Vietnam assessed that the Vietnamese Government is encouraging companies to move in, especially in the high value-added industry group. Vietnam’s industrial park market is facing a great breakthrough opportunity in the period of 2022 and later.

Real estate follows the wave of FDI investment

Ms. Trang Bui – General Director of Cushman & Wakefield Vietnam commented industrial real estate The increase in heat is due to the new wave of FDI investment pouring in after Vietnam reopens. At the same time, businesses are in need of expanding production.

According to Ms. Trang, the new FDI capital poured into Vietnam’s industrial zones in 2022 is tending to develop in two branches. The first is the manufacturing industry and the second is auxiliary logistics, ie industrial real estate that supports production and logistics.

The wave of FDI landed, the rental price of industrial real estate in Ho Chi Minh City increased - Photo 3.

Many enterprises expand production scale after the market opens. Photo: HT

“With the explosion of e-commerce in recent years, many Asian investors such as Singapore, Japan, Hong Kong, Korea… and a whole group of investors from the US and Europe. also appeared in the industrial real estate market in “, said the expert.

In fact, in the first months of 2022, the industrial real estate market was bustling to welcome Asian – European – American investors to approach the market, opening a new growth momentum. Accordingly, many big brands and enterprises have come to the Vietnamese market to set up factories and expand warehouses.

For example, the Danish jewelry brand Pandora in mid-May signed a memorandum of understanding to build a new jewelry manufacturing facility at Vietnam – Singapore Industrial Park III (VSIP) in Binh Duong province. This will be the company’s third production site and the first outside of Thailand.

The wave of FDI landed, the rental price of industrial real estate in Ho Chi Minh City increased - Photo 4.

Industrial real estate is forecasted to continue to be “hot” in the near future. Photo: HT

In addition, Germany’s Framas Group has just rented a 20,000 m2 ready-built factory at KTG Industrial Nhon Trach 2 project (Dong Nai). Framas specializes in manufacturing high quality plastic parts for customers like Nike and Adidas

Mr. Fabian Urban – Footwear technology director of Framas Vietnam, said the reason for choosing Vietnam to open the factory was because of its superior facilities compared to other locations. “The establishment of the new factory is part of the Group’s strategy to develop the footwear sector in Vietnam,” Urban said.

CEO Cushman & Wakefield commented, industrial real estate market Vietnam is still in the early stages of development but has great potential for growth in the next 5-10 years as the Vietnamese government is stepping up investment in infrastructure.

In addition, the strong growth of the middle class with high disposable income and the strong spread of e-commerce will be the driving forces for the development of the logistics market.

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