Why investors choose industrial real estate in Vietnam?

Dec 05, 2022

According to experts, compared with neighboring countries in the region, Vietnam is in a rather favorable position in attracting investment in the field of industrial real estate (illustrated image).

Despite being affected and negatively impacted by the Covid-19 epidemic, the industrial real estate segment will continue to be vibrant in the coming time and attract the attention of many investors.

Citing the above statement, Colliers Vietnam General Director David Jackson said that Lego Group's decision to build a $1 billion factory in VSIP 3 industrial park (Binh Duong) recently was an event with many This decision is made by Lego after about a decade of consideration, showing that this group has carefully researched before officially choosing Vietnam to deploy the second factory. 6 globally (2nd in Asia). Notably, this is Lego's first carbon neutral factory with the use of solar energy for related activities.

According to Mr. David Jackson, the increasing number of foreign investment projects with high science and technology content and environmental friendliness is a sign that Vietnam is gradually becoming more successful in attracting quality FDI capital. high quantity. This can also be seen as an important signal that big corporations around the world continue to see Vietnam as a destination.

Moreover, the successful control of the Covid-19 pandemic, the reopening of international routes and many more Efforts and initiatives to quickly recover the economy have been implemented continue to help Vietnam have more advantages compared to many countries in the region in attracting FDI into the real estate sector in general and the development of the real estate segment. industrial real estate in particular.

Production and business activities were able to take place again at this time, creating a very positive impression of Vietnam's dynamic investment environment in the eyes of international investors. This will help many large corporations in the world have more compelling reasons to choose Vietnam in their global supply chain diversification strategy.

Another advantage according to Mr. Jackson is the rental price of public real estate. Industrial production in Vietnam is still about 20-33% cheaper than some countries in the region such as Thailand or Indonesia. Vietnam's industrial real estate is still in the early stages of development, so the usual advantages of this stage such as land rent or labor costs will also last for at least 5-7 days. 

Besides, an important driver of industrial real estate in the coming years is the "unstoppable" growth of e-commerce. Statistics from the Vietnam E-commerce Association - VECOM show that the compound annual growth rate of this industry's revenue is more than 40% in the period 2020 - 2025 and is estimated at 52 billion USD in 2025. It is estimated that about 350,000m2 of new warehouses will be needed to meet the needs of this industry when the revenue reaches 25-27 billion USD.

Sharing the same view, Director of Savills Hanoi Matthew Powell also said that, compared to neighboring countries in the region, Vietnam is in a rather favorable position. With many job opportunities and development, labor prices in Vietnam are at a relatively low level in the region. Moreover, because of the relatively simple legal framework, businesses feel comfortable investing in and working in Vietnam. Besides large corporations, Vietnam also attracts FDI from companies. operating in the field of production, logistics…

These can be considered as some important reasons for many domestic real estate enterprises, even those outside the industry, to race to invest in the industrial real estate segment. Before that, the decision to decide Opening the route on March 15 will make it easier for foreign-invested enterprises to access industrial park projects in Vietnam. This will create a big step forward for the growth momentum of this segment in 2022.

Source Xay Dung Newspaper