Vietnam Industrial Park Infrastructure Report 2022
In 2022, Vietnam’s GDP continuously achieve impressive numbers compared to the highest quarterly GDP figures in the last five years (Q2 GDP reached 7.72% and Q3 reached 13.67%). These numbers reflect Vietnam’s extremely good recovery and growth rate after two years of being heavily affected by the Covid-19 epidemic. However, in the fourth quarter of 2022, the GDP index dropped to only 5.92%. This is the scenario that has been predicted before export orders decreased, foreign investment also decreased, the economic situation and world demand did not show clear signs of improvement. For the whole year of 2022, GDP wil grow at 8.02%.
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Vietnam’s CPI in 2022 increased 3.15% and core inflation at 2.59% compared to the same period of last year. This inflation figure is still within the Government’s forecast. However, we can see more thoroughly that the quarterly CPI growth rate in 2022 is increasing continuously, especially the fuel import price index (still increasing by more than 40%). Inflation in Vietnam has a close relationship with money supply. As money supply increases, inflation increases and on the contrary. The policy that Vietnam is applying to fight inflation is to strictly control the money supply, and the credit ceiling is also be used to achieve this goal. On the contrary, it also shows many consequences, it is necessary to have reasonable and flexible fiscal and monetary policies, with a longer-term orientation to continue to control inflation well in 2023 which is still forecasted to be very difficult.
IP rate of Vietnam improved and continuously increased since the beginning of 2022. The highest increase was recorded in the second and third quarters of this year. In the final months of the year, IIP still increased, but the number tended to decrease. Especially, IIP in December only increased 0.2% compared to November. The manufacturing and processing industry still record a high increase in IIP compared to other industries, but the general trend decreased gradually in the last months of the year.
According to our survey on the internal traffic infrastructure of nearly 400 industrial parks across the country, the construction of some roads around the industrial parks has basically met the design standards of the internal transport infrastructure of the industrial parks. Thereby, the use of 4 lanes on main road and 2 lanes on the secondary road accounts for the majority. Recently put into operation Industrial Parks also have the same size of internal roads. Next is a group of 2-lane main roads and 2-lane secondary roads, mainly in areas that were put into operation before 2010. Other lane groups account for a small percentage. Internal roads in industrial parks are now basically completed with good quality, meet the needs of internal movement in the industrial park, and are quite synchronized with each other, especially in new areas. Along with the basic design in the style of a chessboard, it is convenient and easy to travel in the industrial park.
Nationwide, a total of 411 industrial parks have been put into operation. Based on a survey of 357 IPs, we have synthesized and analyzed factors related to industrial park real estate. The average occupancy rate of industrial parks is over 87%. Besides, warehousing services are also increasingly being promoted. Currently, more than 53% of industrial parks have been providing this type of service and are concentrated in the South.
When dividing Industrial parks into groups 1,2,3 depending on the geographical distance from major cities, found that in the North, mainly industrial parks of group 1 were built because they were mainly located near Hai Phong city, group 2 and group 3 industrial parks are also very diverse. The industrial real estate market in the North in the near future promises to bring a lot more diversity in terms of location, as well as increase the supply of industrial real estate, focusing on attracting investors. Meanwhile, in the South, mainly industrial parks of group 3 will be built a lot, mainly in Long An and Can Tho provinces. And in the Central region, mainly industrial parks of group 3 were built, in provinces such as Binh Thuan, Quang Tri and Quang Nam.
HOUSELINK selects projects with investment capital over two (02) million USD (equivalent to about 48 billion VND) to analyze the type of industrial real estate. Accordingly, we believe that the average capital size and the ratio of land lease projects to factory lease projects are still at a higher rate. But analyzing more deeply about the uptrend, we find that factory rental projects are still maintaining an upward trend from 2021 to now. On the contrary, the rate of land lease projects is tended to decrease, although the capital scale of land lease projects is tending to increase. In 2022, electronics is the leading industry among project industries that rent a lot of factories but also ranked 2nd among project industries that lease construction land.
Recognize electronics as the most newly registered FDI projects. Following are projects in the industry: Plastic-rubbber, metal, logistics, textiles, footwear, etc. It can be seen that in the past time, electronics is in the top 5 prominent industries in all three regions. However, in each region we see a number of different prominent attractive industries, associated with the formation of different supply chains. This is further clarified in the investment supply chain report published by HOUSELINK monthly.
Some of the top investment capital sources of projects in 2022, in addition to the large proportion of DDI capital projects, FDI-China, FDIKorea and FDI-Taiwan is the top 3 sources of investment capital in the Vietnamese market. Positive signals next year will come from Chinese capital investment projects thanks to the relaxation of this country’s anti-epidemic measures after 3 years of applying the Zero Covid policy. However, we are still concerned that after easing, the outbreak will be inevitable, the appearance of new strains or the re-imposition of blockade orders, if any, will have a significant impact on other markets.
