Viet Nam Industrial real estate status report Q2/2021

Vietnam’s socio-economy in the second quarter of 2021 is on a slight growth but is still significantly affected by the Covid-19 epidemic

Following the trend from the first quarter of 2021, the number of newly registered projects decreased by about 43% over the same period last year, but the total value of newly registered capital increased by more than 13%. This shows that the trend of foreign investors who have registered to invest in large-scale projects is still continuing in the second quarter of 2021.

The consumer price index (CPI) in the first 6 months of 2021 increased by 1.47% on average compared to the same period in 2020, the average inflation in the first 6 months increased by 0. 87%, mainly due to the price of raw materials, input materials increased according to world prices; electricity and water prices increase according to consumer demand. Specifically, the prices of some raw materials tend to increase the most, such as gasoline, steel, and construction materials. In addition, the prices of some agricultural products such as rice, sugar, etc. also increased.

From the beginning of 2021, the price of construction materials, especially the high price of steel, has greatly affected the production costs of construction enterprises. The survey results in the second quarter of 2021 showed that 43.5% of enterprises demonstrate the total cost of production per unit of the product increased compared to the first quarter of  2021; 33.5% of enterprises said did not change, only 23.0% of enterprises perceive the total cost per unit of product to decrease. Forecasting the third quarter of 2021 compared to the second quarter of 2021 with 48.3% of enterprises forecasting an increase in total production costs per product unit, 33.5% of enterprises forecasting unchanged, and 18.2% of sales forecast-ed to be unchanged. The industry forecasts a decrease in total cost per unit of output.

Industrial real estate development status

Nationwide, a total of 301 Industrial Parks (1) have been put into operation with a total planned area of ​​114,747 hectares and the average occupancy rate (2) of industrial parks reaching 83%. However, if divided by region, the occupancy rate of the Industrial Park in the southern provinces is slightly higher than that in the North and Central regions. In which, this rate in the Central region is the lowest. Specifically, in 19 southern provinces and cities, with 146 industrial parks in operation, the planned area reaches 76,735 hectares, double the total planned area of ​​industrial parks in the North and Central regions. The occupancy rate of the Industrial Parks in the South has the highest average value in the region, with 89% of the industrial land area being filled.

Meanwhile, the planned area and occupancy rate of industrial zones in the North and Central are lower, the lowest is in the Central region. The occupancy rate of the Industrial Park in the North reaches 81% with a total planned area of ​​27,249 hectares. In the Central region, the total planned area is still very modest at 10,763 hectares, and the average occupancy rate in the central provinces is only approximately 73%.

If divided by regions, we can see that, in the Northern market, land for rent of industrial parks which still have available land mostly fluctuate in the price range of 71-90 USD/m2/ rental period and < 50 USD/m2/lease period. While in the Central region, 82% of industrial real estate for rent has a price range of < 50 USD/m2/lease period. And in the South, the majority of the land is leased at the price range of 50-70 USD/m2/lease period and 111 – 150 USD/m2/lease period. Through this preliminary study, it can be seen that the rental land product of the Industrial Parks in the southern provinces and cities tends to be higher than the other regions

Status of industrial zones grouped by geographical distance from the center of big cities

The Industrial Parks that belong to Group 3 for the largest number (182 Industrial Parks), the occupancy rate of Industrial Parks in this group is also relatively high (81%). Group 2 has the number of Industrial Parks of 71, but the occupancy rate is the lowest (79%) but it is close to this rate of Group 3 Industrial Parks. And finally, Group 1 – Near the big cities, due to the limited land fund, the number of occupations is the lowest (47) but the occupancy rate of Industrial Parks in this group is very high (92%). This shows that geographical distance is always one of the important factors that investors consider when choosing an Industrial Park. Industrial parks are close to the center of big cities, convenient to move, especially convenient when most industrial parks in Vietnam have not yet provided housing for workers and experts, the selection of Industrial parks near the center is always the optimal choice to ensure production and business and ensure the daily life of personnel working in the Industrial Park.

 Development of new industrial parks in the first half of 2021

42 Industrial parks are added to the planning in the first 6 months of 2021 nationwide. In which, 29 zones were added to the Northern Region, and 7 industrial zones were added in the South to the planning, while this number in the Central region was 6 zones. Both the number and the planned area of the new industrial parks in the North account for the majority, showing that the supply of the Northern provinces is ready to welcome new investment capital, especially the wave of investment shifting from China to Vietnam.

Transfer of manufacturing from China to Viet Nam QII/2021

According to statistics and surveys by HOUSELINK, in the second quarter of 2021, there are 16 enterprises registered to invest in production projects which have capital is more than 10 million USD, have existing factories in China, and are expanding production to Vietnam. Most of these industries include electronics, building materials, apparel, food processing, etc.

Following the success of previous periodic reports, the report on the current state of industrial real estate in Vietnam Q2/2021 will be emailed by HOUSELINK  to more than 100,000 large manufacturing investors with many industries from different countries. countries with great investment value in Vietnam. And the entire community of more than 2000 member businesses on the #HOUSELINK system including industrial infrastructure developers, real estate, manufacturing business owners, construction businesses.

Registration for details report here!

Read report here!

Hương Trà- Vietnamconstruction

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