The growth of industrial land price and high occupancy rate of Vietnam industrial zones during 2020 will continue strongly in 2021, according to experts. As the only real estate type with hot growth indexes throughout 2020, the market of industrial parks, factories, and warehouses for rent continues to be ranked in the industry with the highest optimism index in 2021.
JLL Vietnam said, industrial real estate is the hottest growth in the past few decades while still attracting investment during the season. In 2020, the rental price of industrial land increased on average by 7.9% over the same period last year. And most likely, this price increase in the next 12 months will be equal to or higher than 2020. In terms of growth rate, industrial real estate is in a rapid growth cycle. Sharing the same point of view, SSI also forecasts that industrial land rental in Vietnam will continue to escalate this year. Accordingly, the price of industrial land in Vietnam is expected to grow 7-8% in the South and 5-6% in the North. According to SSI, a huge advantage of Vietnam is the lower rental price of industrial land compared to some countries in the region. Specifically, about 25-30% lower than Indonesia and Thailand - countries benefiting from FDI inflows. SSI confirmed that the demand for land rent increased sharply due to the transfer of production from China to Vietnam. The Covid-19 translation has spurred movement in recent years and Vietnam is considered to be one of the countries benefiting from this trend. The relocation of production from China to Vietnam is a major trend that has the potential to accelerate the post-Covid era. According to Colliers International, the average rental rate of industrial real estate in Ho Chi Minh City is the highest in the country, at 160 USD per m2 according to the lease term. Among the southern provinces, Long An is an impressive FDI attraction, including 1,079 projects and a capital of 6.6 billion USD (December 2020 data) and is emerging as a capital of Ho Chi Minh City in the industrial real estate segment. Mr. Chi Vu, Head of Brokerage Services of Colliers International Industrial Park, assessed that industrial real estate is a rare segment that is still thriving despite the epidemic. This trend is likely to continue in 2021 when Vietnam has consecutive positive macro signs. Moving towards smarter governance models, optimizing resources and contributing effectively to environmental protection should be the priority of industrial park developers in the near future. An expert of Savills Vietnam also said that industrial real estate will continue to have a strong potential for growth in 2021 thanks to the policy and direction of the Government in expanding the industry to support foreign investors. At the same time, changes in the world economic situation as well as the trade war between the US and China are also a plus point for the supply chain in the Vietnamese market.
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