In the first two months of 2023, more than $900 million was poured into three industrial areas in Bac Giang province.

China’s Yadea Group registered to invest $100 million in a factory to manufacture and assemble electric motorcycles with an expected capacity of about 2 million vehicles per year in Tan Hung Industrial Park (IP). Covering 23.2 hectares, the project will be implemented in the second quarter of 2023.

Companies from the US, Japan, and elsewhere are continuing to look at expanding presence in Vietnam, photo Le Toan

The Fulian Precision Technology Factory by Singaporean group Ingrasys, located in Quang Chau IP, is expected to be put into operation at the end of 2023. The almost 50-ha scheme will manufacture electronic components, computers, and high-tech communications equipment.

Further, Chinese firm Hainan Longi Green Energy Technology has funded a solar panel manufacturing plant at Hoa Phu IP in Hiep Hoa district. The construction started in Q1.

According to Phan Xuan Can, chairman of Sohovietnam, there have been many orders from investors for industrial real estate.

“There are currently millions of dollars ready to invest in industrial park real estate. This partly confirms the attractiveness of this segment, which is considered as a golden field as the rental price has continuously maintained an upward trend in recent years,” Can said.

Meanwhile, dozens of American company representatives were in Vietnam last month for the likes of Boeing, SpaceX, Netflix, and Apple in hopes of pushing further into the fast-growing Vietnamese economy.

According to the US-ASEAN Business Council, American companies are witnessing the trend of continuing to expand their production centres and global supply chains in Vietnam in semiconductors, fast-moving consumer goods, toys, furniture, food and beverages, the digital economy, banking and financial services, and healthcare.

Can added that many foreign investors are looking for opportunities to penetrate deeper into the Vietnamese real estate market, especially in the industrial and commercial real estate segment. In the current expensive period, this is a great advantage of foreign investors, known as a strong and powerful group in finance.

“In the normal context, the domestic sector usually dominates because they understand domestic business practices. However, in the current expensive loans period, many investors have difficulties in cash flow, and this is an opportunity for foreign investors thanks to the advantage of cheap capital flow, with interest rates in many host countries still low,” Can said.

Real estate still ranks second among industries with the largest amount of foreign investment with total capital in the first three months of the year reaching $766 million, accounting for nearly 14.1 per cent of total registered investment capital and down 71.6 per cent over the same period.

Despite the belief that such investment in 2023 will slow down due to the economic recession, many experts estimate that the industrial real estate market in Vietnam can maintain demand from investors thanks to the advantages in terms of labour, population, infrastructure development, and incentives for foreign investors, as well as the government’s efforts in maintaining macroeconomic stability.

According to John Campbell, head of Industrial Services at Savills Vietnam, the nation’s real estate market is benefiting from a stable exchange rate and attractive corporate tax rates.

“Faced with the fact that multinational companies are still looking to diversify their areas of operation or relocate out of China, the Vietnamese industrial real estate market is a bright spot in creating strong conditions for investment attraction,” Campbell said.

“In addition to experienced investors from South Korea, Japan, China, and elsewhere, the market also needs to attract the participation of multinational corporations from America and Europe,” Campbell added.

According to SSI Securities Corporation, demand for industrial park land rental in Vietnam will grow strongly from the second quarter of 2023, thanks to policies promoting a return to investing in the Southeast Asian country.

Due to short supply this year, forecasts from SSI show that rental prices are expected to continue to rise by an average of 8-20 per cent on-year, depending on the region. Last year, industrial real estate rents rose by an average of 10 per cent due to high demand.

Figures from the Ministry of Planning and Investment released that up to the end of 2022, there were almost 400 industrial zones with a total land area of nearly 123,000ha nationwide; of those, 292 IZs are currently operational.