The cost of leasing industrial land continued to rise and became a bright spot in the market, despite the Covid-19 epidemic.

The cost of leasing industrial land continues to increase.

According to the latest report from Savills Vietnam, despite the effects of the pandemic on the entire economy in general, the industrial land/industrial real estate market is still on the upswing.

Positive business results

Right from the beginning of the year, many forecast that 2021 will be a "bounty year" for industrial real estate developers who already have a large land bank.

Because, compared to the common level of the world, Vietnam is still considered a country with good disease control, and also benefits from the wave of investment shift away from China.

Therefore, the demand for industrial real estate increased, leading to better business results of some enterprises in this industry in the first quarter of the past quarter.

Specifically, Kinh Bac Urban Development Corporation - Joint Stock Company (KBC) announced its consolidated financial statements for the first quarter of 2021 with a revenue of VND 2,002 billion, nearly 4 times higher than that of the first quarter of 2020.

In which, revenue from land rental and real estate transfer accounted for more than 1,904 billion VND, up 3 times over the same period last year.

This is the record quarterly profit achieved by KBC, and also the quarter in which the business index of the business continued to grow, following the momentum of 2020, coming from the company's adjustment and update to increase the cost of capital. for the industrial zone.

Or Sonadezi (SNZ) announced Q1 revenue of 1,266 billion dong, up 14% over the same period. In which, the industrial zone business alone reached more than 365 billion VND.

In addition, other enterprises in the real estate industry group with high profit growth during the same period include Tan Tao (ITA), IJC and Nam Tan Uyen (NTC).

The Vietnam Real Estate Brokers Association said that the industrial real estate market is witnessing a strong boom in demand in many provinces and cities, such as: Long An, Dong Nai, Binh Duong, and Binh Dinh. , Thanh Hoa, Quang Ninh, Hai Duong, Bac Giang...

With 260 industrial parks in operation and 75 industrial parks under construction, the occupancy rate in Vietnam's industrial parks averages over 70%.

The average factory rental price across the country is about 60,000-80,000 VND/m2 and the purchase price of industrial park land with infrastructure ranges from 3-5 million VND/m2.

With limited supply in other segments such as commercial housing, offices and retail, industrial real estate is being sought after by domestic and foreign investors, thereby creating leverage to reduce costs. Industrial real estate leases escalate.

Many advantages

According to a forecast of Focus Economics, the average growth of Vietnam's economy in the period 2021-2025 will reach 6.7%, ranking 4th out of 130 countries with the highest economic growth in the world.

Driven by a stable political environment, low labor costs and a relatively skilled workforce, Vietnam has been very successful in attracting FDI, especially in the garment and textile sectors. wear and electronics.

Besides, Vietnam is also an attractive location for companies looking to move out of China due to the US-China trade war and a series of trade agreements have been signed to promote market access. for its goods, including the RCEP and FTA with the European Union.

Troy Griffiths, Deputy General Director of Savills Vietnam, said that while the US-China trade war has not shown any signs of cooling down, many companies have applied the China + 1 model to look for new locations to diversify. diversify and secure supply.

With its adjacent location to China, as well as converging many strategic advantages, especially the very competitive industrial real estate rental costs, Vietnam is being interested by many domestic and foreign businesses and considered as a alternative destination to China.

According to Mr. Troy, industrial real estate will continue to be "the darling" of the real estate industry in general, with high demand and increased capital market activity.

Savills' latest industrial real estate market report recorded an increase in occupancy rates in the northern key economic region over the same period.

Specifically, in Hanoi, the occupancy rate is up to 90%, Bac Ninh is up to 95%, Hung Yen is 89% and Hai Phong is 73%.

Meanwhile, the southern area recorded the occupancy rate in Ho Chi Minh City is 88%, Binh Duong is 99%, Dong Nai is 94%, Long An is 84%, Ba Ria - Vung Tau is 79%.

Steady growth in rental price

Savills expert said that, thanks to the Free Trade Agreement between Vietnam and the European Union countries EVFTA signed in August 2020, the cost of renting industrial land has grown quite steadily.

The planned industrial parks are expected to be the objects to attract foreign capital in the coming time.

Through the Free Trade Agreement, the cooperation relationship between the EU countries and Vietnam will be strengthened, promoting the recovery of the manufacturing industry after the quiet period caused by Covid-19 .

In addition, the free trade agreement will also create more impetus for the transition from low-value, labor-intensive industries as well as using low-skilled workers to industries. has a higher value.

“Thanks to the Government planning development strategies for all 63 provinces, industrial real estate investors will have a broader view of the current land fund and development direction in Vietnam. So 2021 is a very exciting year and the start of a very good road ahead,” said Troy Griffiths.

According to John Campbell, Savills Vietnam industrial real estate manager, with the expectation of growth in import and export and domestic production, demand for logistics infrastructure is being boosted.

In recent years, the total warehouse area has increased significantly, and the price has increased by 5-10% per year.

According to data from Savills Vietnam, the average rent for warehouses in the Northern and Southern Economic Region in 2020 is 4.1 USD/m2/month and 4.4 USD/m2/month, respectively.

In provinces like Long An and Binh Duong, new warehouse projects and distribution facilities are springing up as the HCMC and Binh Duong regions face supply shortages.

Although the cost of leasing industrial land has increased, but a report by Savills Vietnam from 54 markets in 21 countries shows that Vietnam is the place with the lowest operating costs in the ranking.

Leading the way is Hanoi when the cost of labor plus energy costs are low, making operating costs in Vietnam more competitive compared to other countries in the region, becoming an attractive destination for tourists. Multinational companies.

Industrial real estate in Vietnam possesses great opportunities for strong growth and development.

However, experts said that, if localities do not have careful calculation in granting new industrial real estate projects, a crisis is quite possible.

According to cafeland.vn