These days, the VSIP 3 industrial zone construction site in Tan Uyen district, Binh Duong province is bustling with hundreds of machines, engineers, and workers busy building new factories.

Among the first customers of VSIP 3 is the Lego Group (Denmark). The conglomerate has invested 1 billion USD to build the world's first carbon-neutral factory. Another large Danish conglomerate, Pandora, is also deploying a new production facility with a total investment value of over 160 million USD.

Although just starting up, this industrial zone has attracted about 30 domestic and foreign corporations and companies exploring the potential for production development, in addition to the already announced customers.

In fact, Binh Duong has the highest occupancy rate of industrial zones in the country, according to statistics from the Vietnam Real Estate Brokers Association (VARS). The entire province has 29 operational industrial zones, with an occupancy rate exceeding 95%. Across the country, there are 400 industrial zones, of which 292 are operational with an occupancy rate consistently over 80%, while the rest are still under construction.

As recorded by Zing, within the first two months of 2023, numerous agreements have been signed between industrial zone investors and major global manufacturers, particularly in the electronics and energy sectors.

Recently, Goertek - one of Apple's largest partners - signed a memorandum of understanding to lease 62.7 hectares in Nam Son - Hap Linh Industrial Park (Bac Ninh).

Another major component manufacturing partner of Apple, Foxconn, has also signed a lease agreement for 45 hectares of land in Quang Chau Industrial Zone (Bac Giang) for $62.5 million to meet operational needs and expand production capacity. The lease contract is valid until February 2057.

According to some data from last year, the 2023 Mac Pro and new MacBook models are among the technologies that Foxconn plans to produce in Vietnam.

Similarly, Samsung is also planning to increase its investment capital in Vietnam to 20 billion USD in the near future. The South Korean conglomerate is also planning to manufacture high-tech products in Vietnam.

In addition, Ms. Thanh Pham, Deputy Director of Research and Consulting at CBRE Vietnam, said that other big names such as LG and Quanta will also pour billions of dollars into Vietnam in the coming time.

According to Ms. Thanh Pham, Deputy Director of Research and Consulting at CBRE Vietnam, the industrial land rental prices in Ho Chi Minh City, Dong Nai, Binh Duong, and Long An are expected to increase by 7-10% per year in the next two years. For markets such as Binh Thuan, Ba Ria - Vung Tau, Binh Phuoc, and Tay Ninh, the rental prices may increase by around 5-7% per year.

Looking back at 2022, CBRE recorded that the average industrial land rental price increased by 8-13% annually, reaching $166/m2/remaining lease term by the end of the year. In prime locations in Ho Chi Minh City, Binh Duong, and Long An, rental prices could reach over $280-300/m2/remaining lease term.

According to Savills' data, by the end of 2022, the rental price in Ho Chi Minh City had reached 300 USD/m2/lease term, the highest industrial land rental price ever. The occupancy rate of industrial parks is also almost absolute.

Experts believe that the policies and support commitments from the government are still a major driving force for industrial real estate to attract investment capital. The high-level leadership of Lego has also revealed that the main reason for choosing the Vietnamese market is the government's commitment to achieving net zero emissions by 2050. Therefore, there is still a lot of potential for development in the industrial real estate market in Vietnam.

Furthermore, Ms. Thanh Pham emphasized the importance of transportation infrastructure development strategy. In the southern region, improved transportation infrastructure is facilitating better connectivity between localities, such as the Ho Chi Minh City - Trung Luong - My Thuan expressway (completed in 2022), the Dau Giay - Phan Thiet expressway, the My Thuan - Can Tho - Bac Lieu expressway (expected to be completed in 2023), and the Nhon Trach bridge (expected to be completed in 2025)...

Meanwhile, the reopening of China - the world's second-largest economy - is expected to boost Vietnam's economy. Relevant agencies are working with Chinese partners to negotiate cooperation activities for the benefit of both sides.

"Although supply chain disruptions have largely subsided, companies are still diversifying their risk by seeking additional sources of supply and production locations. Recently, Chinese electric vehicle manufacturer BYD Auto Co. plans to build a factory in Vietnam to produce car parts in order to reduce dependence on China and increase supply chain in Southeast Asia as part of its global expansion strategy," Ms. Thanh Pham added.

However, according to experts at Colliers, if comparing the total FDI capital into Vietnam and Indonesia in 2022, Vietnam is facing fierce competition with other countries in the region as the inflow of investment into these countries is concentrated in the fields of electric vehicles and semiconductors.

This unit emphasizes that these are two important industries that will shape the investment context in Southeast Asia.

On the other hand, the market is also facing trade recession. Chi Vu, Senior Manager of the Industrial Services Department at Colliers Vietnam, believes that the reduction in scale, postponement or cancellation of orders from developed markets is affecting to some extent the plans in Vietnam of foreign investors in the short term.

"However, Vietnam is still seen as a strategic choice for diversifying supply chains. The next challenge is how to attract and retain high-quality investment capital. One example is the problem of transforming existing industrial parks into more sustainable models in the coming years," said Mr. Chi Vu.

Source: Zing