Despite a new outbreak of COVID-19 in Vietnam, the industrial property segment saw positive signs with new industrial zones established and key industrial projects beginning operations, according to a report by Savills Vietnam.

Illustrative image (Photo: VNA)

Despite a new outbreak of COVID-19 in Vietnam, the industrial property segment saw positive signs with new industrial zones established and key industrial projects beginning operations, according to a report by Savills Vietnam.

This year has witnessed new M&A deals and improvement in industrial land supply. The largest manufacturing projects in the first half of 2021 came from Hong Kong (China) and Singaporean investors that targeted northern Quang Ninh and Bac Giang provinces.

Vietnam’s FDI inflows rose by 3.8 percent year-on-year to 10.5 billion USD in the first seven months of 2021, with processing and manufacturing taking the lead, raking in 7.9 billion USD, or 47.2 percent of the total, data from the Ministry of Planning and Investment showed. The real estate came third with registered FDI of 1.16 billion USD.

“By region, the North received the majority of newly registered manufacturing investments with a substantial 1.97 billion USD, representing a 64 percent share,” said John Campbell, Manager of Savills Vietnam’s Industrial Services. The South followed with 728 million USD (23 percent), while the Central region attracted 395 million USD (13 percent).

In terms of provinces, Bac Giang received the highest amount of newly registered manufacturing capital with 589 million USD, closely followed by Quang Ninh with 569 million USD, and Bac Ninh with 222 million USD. Representing the South, Binh Duong came in fourth with 208 million USD.

For foreign investors, Hong Kong invested the highest amount of manufacturing FDI during the period with over 852 million USD, accounting for a 27 percent market share. Singapore was in the second place with 655 million USD (21 percent), followed by China with 549 million USD (18 percent), and the Republic of Korea with 330 million USD (11 percent).

John said the largest manufacturing projects in the first half of the year were from Jinko Solar and Fukang Technology from Hong Kong and Singapore investing 498 million USD and 270 million USD in Quang Ninh and Bac Giang, respectively.

Regarding new projects, Logos Property’s 81,000-sq.m project in the Vietnam-Singapore Industrial Park (VSIP) Bac Ninh 1 is expected to begin operation in the fourth quarter of 2021. New player in the market, KCN Vietnam Group JSC, acquired a significant 250-hectare land plot with an investment of 300 million USD, aiming to develop premium, sustainable factories and warehouses for rent in Vietnam with a national portfolio pning across Bac Giang, Hai Phong, Hai Duong, Dong Nai and Long An.

He also noted that various new M&A deals have been inked this year. Boustead Projects Co. Ltd., for example, singed an options agreement for the proposed acquisition of 49 percent stake in KTG & Boustead Industrial Logistics JSC. If successful, the partnership will consist of 13 real estate seed assets amounting to 141 million USD in gross asset value covering about 840,000 sq.m of land and about 550,000 sq.m of gross leasable area, he added.

ESR Cayman Limited, the largest Asia-Pacific-focused logistics real estate platform, and BW Industrial Development JSC (BW), the leading logistics and industrial real estate developer and operator in Vietnam, have entered into a joint venture to develop 240,000 sq.m in My Phuoc 4 Industrial Park near Ho Chi Minh City. The partnership marks ESR’s entry into Vietnam, expanding the group’s Asia-Pacific footprint in the high-growth Southeast Asia region./.