Industrial real estate in the South sets a new price peak

Jul 05, 2021

With an average rent of 113 USD/m2/lease term in the second quarter of 2021, industrial park developers in the South have established a new average price level…

Thanks to the optimistic economic growth indicators, the industrial real estate market in Vietnam still retains its great potential along with many unique advantages inherent in the country, helping to attract manufacturers and investors in logistics and supply chain.

 STABLE COMPLETE RATE

According to the report of the second quarter of 2021 by JLL Vietnam, the industrial land market for lease in the South (including Ho Chi Minh City, Binh Duong, Dong Nai, Ba Ria - Vung Tau and Long An) has increased the total area of ​​public land leasing industry to 25,220ha.

Currently, Binh Duong and Dong Nai are the two provinces with the largest area of ​​industrial real estate for rent in the South.

Meanwhile, under the impact of the 4th wave of Covid-19 epidemic, the ready-built factory market has not recorded new supply in this quarter, the existing supply reached 3.2 million m2 of floor space.

In addition, JLL also recorded that many transactions were completed in Ba Ria - Vung Tau despite the outbreak of the pandemic, the land lease agreements mainly came from heavy industry manufacturers that required a large land fund.

Therefore, the occupancy rate of the industrial park reaches 85% and the ready-built factory reaches 86%. Industrial land recorded new transactions during the outbreak, showing that both investors and tenants have gradually found ways to accompany the pandemic to continue operating.

 In contrast, ready-made factories witnessed business expansion of existing businesses rather than new ones.

 

COMPLETE INFRASTRUCTURE PROMOTE RENT INCREASES

 Industrial land as a form of long-term production investment has always maintained a strong price growth momentum over the years.

In the second quarter of 2021, industrial park developers in the South set a new average price peak of $113/m2/lease cycle, up 7.1% over the same period last year.

The average rental price of industrial land has increased to 113 USD/m2/lease term in the South.

While the rent for ready-built factories averaged 4.5 USD/m2/month for the whole region, only increased by 0.5% over the same period last year due to the outbreak of the pandemic, which had a great impact on operations rental of this type of ready-made real estate.

Up to now, Vietnam is still recognized as a successful country in controlling the Covid-19 epidemic, which further strengthens investors' confidence in Vietnam's potential business environment.

With bright visions of the country's production in the future, provincial governments constantly improve and build new infrastructure systems, typically the Phan Thiet - Dau Giay expressway projects, Bien Hoa - Vung Tau Expressway, Ben Luc - Long Thanh Expressway, all located in key industrial markets around HCMC.

JLL Vietnam forecasts that industrial land rents in the South will continue to grow. As for ready-built factories, about 940,000 square meters of new factories will be put on the market by the end of 2021 if the epidemic situation is controlled and the market recovers.

According to Ban Mai – VnEconomy

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