Insights
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Industrial property outlook Industrial real estate is closely related to industrial production activities, economic sectors and plays an important role in the country’s production and economic development.
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he Government’s Decree No. 82/2018/ND-CP dated 22 May 2018 is regulating the management of industrial zones and economic zones. According to the Ministry of Planning and Investment, by the end of June 2021, Vietnam had 394 industrial zones. There were about 10,853 valid foreign production and business projects with a total registered capital of USD228.4 billion, 69 percent of which has been realised. Domestic investors had 10,186 valid projects with a total registered capital of about VND2.53 quadrillion (USD110 billion), 45.4 percent of which has been realised. BIDV Training and Research Institute has recently released a report analysing advantages, challenges as well as updating the outlook of this sector.
Vietnam leads in cost advantage Cost is still an important factor that helps Vietnam's industrial zones compete with other countries in the region and globally. According to Savills’s research in 2021, operating cost of an industrial zone is scored on 3 main factors, namely land rent, labor, and electricity and gas cost. Vietnam's cost score is at the best level compared to other countries in the world. Vietnam is an attractive destination in the China-Plus-One strategy of many multinational corporations for diversifying investment and dispersing
global production and supply chains. The country received large industrial production projects from different countries such as South Korea with 9,076 projects worth USD71.8 billion, Japan with 4,701 projects valued at USD63.2 billion, Singapore with 2,706 projects totaling USD61.8 billion. Foreign investors also express interest in industrial property business given the influx of foreign investment into Vietnam. According to the Ministry of Construction, in 2020 industrial property saw positive growth in both
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rent and occupancy rate (the national average occupancy rate was about 73 percent). Due to the shift of production from China as well as the EVFTA, demand for industrial land has also increased across the country. In the first 5 months of 2021, average rent of industrial zones in Ho Chi Minh City and Hanoi continued to be high while the supply remained unchanged.
Challenges for industrial zones Ability to fight against the Covid-19 pandemic effectively to ensure business
