Foreign investment has continued to be poured into Vietnam recently, creating a driving force for industrial property development in 2019, said insiders.
Illustrative image (Source: VNA)
According to Troy Griffiths – Deputy Managing Director of Savills Vietnam, a strong increase in foreign direct investment,along with a shift in the value chain, has opened up a bright future for the industrial property market in Vietnam.
The industrial real estate market is showing positive signs as the number of foreign-invested enterprises in Vietnam is increasing, resulting in rising demand for specific workshops to meet technical requirements and maximise utility.
Therefore, in recent years, the trend of renting ready-built factories and building workshops based on customer requirements (Built-to-suit) has widely developed in many localities throughout the country.
Built-to-suit workshops are always designed and built flexibly by investors in accordance with requirements of enterprises, meeting standards of each manufacturing industry.
The ready-built factory market in Vietnam is becoming very bustling, satisfying the diverse leasing demand of customers.
In addition, the demand for warehouses also increases, with the logistics segment seeing positive changes.
The logistics market is said to be one of the most important factors to further develop industrial real estate in Vietnam.
Experts said that the logistics market will develop “prominently” in the next 5-10 years.
According to Savills Vietnam, international-standard management and operation companies are expanding their position and influence in Vietnam’s logistics industry by providing additional services such as supervising and managing inventory, packaging and labelling.
International outsourced logistics service providers are investing more in Vietnam, and this will help promote the development of more modern facilities, they noted.
The Vietnam National Real Estate Association said real estate is still the best investment channel in Vietnam at present.
By 2018, Vietnam had 80,000 hectares of land for industrial zone development, mostly in the northern, central and southern key economic regions.
According to Vietnam Jones Lang Lasalle Company (JLL Vietnam), Vietnam’s industrial real estate is strongly attractive to foreign investors who want to shift their production from other countries to Vietnam.The reason behind this is low production cost, just under 1 USD per hour, the lowest in ASEAN and even lower than China.
All of these advantages are creating momentum for Vietnam’s industrial real estate market to experience a booming development in the time to come.
