August 09, 2022 | 14:05 GMT+7

Investors expanding industrial real estate

Ngân Hà - Quoc Phong -

Stakeholders and observers share their thoughts on production shifts to Vietnam leading to the expansion of the industrial real estate segment.

Photo: Illustration
Photo: Illustration

The trend of production being shifted into Vietnam boosts demand for renting premises for factories, many stakeholders and observers have said.

According to a representative from the Bac Lam Thao Industrial Complex in northern Phu Tho province, investors in 30 per cent of its land area have in-principle contracts to keep the land but since the beginning of 2022, when Vietnam reopened to the world, many foreign investors have expressed a desire to invest at Bac Lam Thao.

“With Vietnam’s attractiveness, many foreign investors continue to choose the country as an investment destination in the region,” the representative said. “Therefore, the Bac Lam Thao Industrial Complex will boost sales promotions to quickly fill 43 ha of land fitted with infrastructure in the first phase and to move forward with plans to expand in the second phase, in early 2023.”

The Foreign Investment Agency at the Ministry of Planning and Investment has said that after a period of decline due to Covid-19, more enquiries are now being made for factories, online as well as in-person, between foreign investors and industrial parks.

According to SSI, the total area of industrial land put into operation in six key northern industrial cities and provinces increased 6 per cent in the first quarter of 2022, to 10,600 ha. With this, occupancy at industrial parks is at a high 86.6 per cent as demand continues to exceed new supply.

Moreover, momentum in FDI attraction is coming from various factors. First, production and business activities are no longer being interrupted by the pandemic. Second, limited supply and a recovery in demand are still keeping industrial park rental costs high. Third, FDI attraction policies encourage investors to return to Vietnam. Fourth, there are solid prospects for infrastructure improvements in the near future, with many public projects getting underway or being completed.

Additionally, the World Bank has said that this is the result of the government controlling the pandemic, promoting production and business, and preventing an economic downturn. Moreover, with the opportunities brought about by its many trade agreements, Vietnam’s growth prospects are still highly regarded.

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