Industrial real estate will be the bright spot

Nov 13, 2021

According to the Ministry of Construction, industrial real estate is a potential segment of the real estate market, because Vietnam is gradually becoming a "stop" for many foreign businesses.

However, from the beginning of the year until now, especially in the second quarter of this year, the re-emergence of the Covid-19 epidemic with many complicated developments has made this market wobbly. Prolonged social distancing, broken production and supply chains, and import and export stagnation have caused some businesses to shift orders out of Vietnam to cope with the epidemic situation. It is worth mentioning that depending on the extent of the impact of Covid-19, industrial real estate forms different pictures between the North and the South.

In the south, due to the severe impact of the epidemic with an increase in the number of F0 infections, the market also became quiet, there was no new supply and the rent did not increase. The whole market did not record any notable transactions in both industrial land and ready-built factories. The occupancy rate is about 85 - 87%.

Meanwhile, due to better control of the epidemic, the northern market still recorded excitement with many new supplies, and rents returned to a rapid increase. The average industrial land price in the North region reached 108 USD/m2, up 6.1% over the same period last year. Factory rent also maintained an upward trend at 4.7% over the same period in 2020, reaching $4.6/m2 per month. New supply in the North was recorded mainly from Pho Noi A Industrial Park (Hung Yen), Yen Phong 2C Industrial Park (Bac Ninh), Nam Dinh Vu Industrial Park (Hai Phong). In addition, the market in provinces such as Thai Binh, Phu Tho, Vinh Phuc also has many large projects.

Vietnam is still considered an attractive destination thanks to its advantages in human resources, diverse free trade agreements and the Government's commitments in infrastructure development. Therefore, when the epidemic is soon controlled, industrial real estate will be the "bright spot" of the market

Source: NDH