Đình Vũ Industrial Park in the northern port city of Hải Phòng. The demand for industrial land for rent in Việt Nam will remain high this year. VNA/VNS Photo

HCM CITY — The demand for industrial land for rent in Việt Nam will remain high this year thanks to policies promoting investment in the country, experts said.

Due to short supply, rental prices for industrial land are expected to continue to rise by an average of 8-20 per cent year-on-year in 2023, depending on the region, according to a report by the SSI Securities Corporation.

Last year, industrial real estate rents rose by an average of 10 per cent due to high demand, according to the report.

Trang Minh Hà, chairman of North Stars Asia Company, said that in Việt Nam, industrial real estate leasing has seen a hike in demand and rental prices, especially for logistics and warehousing.

The industrial land-for-rent market is likely to remain strong over the next 12 months, she added.

Demand for industrial land has surged as the occupancy rate in industrial hubs has reached almost 100 per cent, she said.

Many ready-built warehouses, factories and logistics and data centres are being built in industrial parks (IPs) across the nation, she added.

The average rent for industrial land in the southern region was $159 per square metre in the last quarter of 2022, up 3 per cent over the previous quarter and 10 per cent year-on-year, according to global real estate services firm Cushman and Wakefield.

The highest rent in HCM City was $300 per sqm. The occupancy rate increased to 92 per cent from 91 per cent. The average rent in Bình Dương and Long An provinces was $180.

According to the Ministry of Planning and Investment, Việt Nam has 292 industrial parks with a total land area of 87,100ha and 106 more are under construction.

They are home to some 10,000 domestic companies and 11,000 foreign-owned firms that have invested over $340 billion.

Việt Nam continues to be an appealing destination for industrial real estate investors, according to Cushman and Wakefield.

The firm attributed this to the country’s stable growth rate, an export-oriented economy, a young labour force, investment incentives, a strategic location and a positive economic outlook.

With a stable political environment, Việt Nam has also become popular for foreign investors moving out of China.