Kinh Bac City Development Holding Corporation (KBC) is arranging a meeting with one of China’s largest corporations to cooperate in promoting industrial park development, attracting high-calibre Chinese investors into Vietnam.

The demand for various types of industrial production, research, testing centres, and more is expanding

The information was disclosed by leaders of KBC at the company’s annual shareholder meeting in Bac Ninh on June 19. According to the company, many foreign investors have already registered to invest in Trang Due 3 IP in the northern city of Haiphong.

Along with new investors, current partners of KBC also wish to be active at Trang Due 3 for their expansions, including LG and its satellites. CEO Dang Thi Thu Huong at the corporation’s AGM said, “The company is eager to complete the procedures for the development of Trang Due 3 IP in Haiphong. During the last two weeks, we worked with LG and its satellites to discuss the agreement to hire land here. We completed the land clearance and compensation for 200 hectares. Many foreign investors registered to put their facilities in our expanded IP in Haiphong.”

“During our trip to South Korea, many businesses expressed their attention to investing in Trang Due 3 IP. They plan to invest $1 billion and are waiting for Kinh Bac to solve legal procedures,” said Huong.

Large manufacturers continue to see Vietnam as a potential candidate in their supply chain diversification strategies. Big moves in early 2024 included the microchip project of US firm Coherent and a scheme to build warehouses for rent by Singapore’s SLP in the southern province of Dong Nai.

In addition, Chinese automobile manufacturer Chery, Chinese tech firm Victory Giant, Hyosung TNC of South Korea, and PepsiCo of the US have leased land to build or expand factories in Vietnam.

The International Monetary Fund forecasted that Vietnam will be one of the fastest-growing economies in the world in 2024, on par with India, and the Philippines. Foreign direct investment into Vietnam during the first five months of the year reached $11.07 billion, a 2 per cent increase compared to the same period in 2023, according to data from the Foreign Investment Agency under the Ministry of Planning and Investment.

In terms of capital, manufacturing and processing led the pack with investment capital of over $7.43 billion, or 67.1 per cent of the sector’s total investment, an increase of 11.9 per cent compared to the same period last year.

The property sector ranked second with a total investment of nearly $1.98 billion, or nearly 17.9 per cent of total registered capital, and an increase of 70.8 per cent on-year.

In the first quarter, CBRE Vietnam continued to record large transactions in various industries and from diverse nationalities.

Statistics published by CBRE showed that in 2023, industrial parks (IPs) in the northern region leased nearly 900ha of industrial land and more than 700,000 square metres of warehouses, achieving an occupancy rate of over 80 per cent for both types. Those in the southern region leased nearly 600ha of industrial land and nearly 600,000 sq.m of warehouses, equivalent to respective occupancy rates of 90 and 80 per cent.

Opening up opportunities

At the end of May, through its subsidiary, Marubeni Group acquired 20 per cent of shares of Amata City Ha Long JSC, the developer and operator of Amata City Ha Long IP, from Amata Vietnam.

According to Nikkei Asia, this deal is worth about $11.2 million and officially marks Marubeni’s participation in commitments to develop and operate IPs in Vietnam. Amata City Ha Long is located in Quang Yen town of the northeastern province of Quang Ninh, and is being developed in five phases over an area of ​​715ha.

The project has attracted manufacturers from Japan, South Korea, Taiwan, and Europe in the electronics and electrical equipment, automobile, and machinery industries because of the advantages of easy access to Asia-Pacific markets.

In March, SPX, a logistics provider for cost-effective and reliable delivery services together with Frasers Property, signed an agreement to provide a built-to-suit premium industrial space in Binh Duong IP.

Also in March, VDL ETG, the high-tech arm of VDL Groep, ratified a cooperation agreement with Frasers Property for the construction of a new facility to make semiconductor manufacturing components in Vietnam.

So far, Frasers Property Vietnam has more than 180ha of industrial land area, within strategic locations in both the north and south of Vietnam, with almost a million sq.m of international grade and green-certified industrial facilities that will be developed to support the country’s growing manufacturing economy.

Elsewhere, over the last two weeks, leaders of Vietnam Singapore Industrial Parks (VSIP) arrived in the northern provinces of Thai Binh and Nam Dinh to discuss plans to develop two more VSIP facilities there.

In addition, VSIP commenced construction of VSIP Lang Son on June 14, marking its 16th complex in Vietnam. This year, VSIP has plans to implement the construction of five more IPs as well as a residential project located in Binh Duong.

Motivation creation

At the 2024 Real Estate Finance Forum taking place in May in Ho Chi Minh City, Truong An Duong, general manager of North Vietnam and Residential, Frasers Property Vietnam said that in the past few years, industrial real estate has developed forcefully, especially new rivals in IP development.

“We can see that the foundations of the Vietnamese economy, especially the production, import, and export sectors, are developing very well. Along with that, the government has done a fantastic job promoting foreign investment and signing trade agreements, which has created motivation and competitive advantage for Vietnam, especially in industrial real estate development. Investment from foreign partners and foreign capital sources have continued to increase in recent times,” Duong told VIR.

“In the past five months, we have continued to see very optimistic signals from foreign investors who are interested in utilising Vietnam’s advantages in production,” he said. “The demand for various types of production, as well as research and data and testing centres and even conference exhibition centres in IPs, will expand. We are also moving towards establishing research centres for the semiconductor industry in the next 5-10 years.”

Vietcombank Securities assesses that Vietnam possesses a series of significant advantages in attracting foreign funding, such as electricity prices for production being about 40-50 per cent lower than other countries in the region, competitive labour costs and Vietnam’s macroeconomic environment being kept stable.

“The recovery of exports, especially high-tech products, is creating increasing investment attraction for the IP real estate industry, encouraging more overseas funding inflows from enterprises producing high-technology products, creating added value and increasing rental prices in IPs,” it added.