Making news

Growth boosts demand for industrial land

Demand for industrial land around the country is expected to increase thanks to significant growth in terms of both industrial production and FDI.

Last year HCM City’s index of industrial production grew by 7.9 percent while Hanoi’s expanded by 7.1 percent.

FDI flows into HCM City topped 6.3 billion USD while for Hanoi they were worth 2.4 billion USD, a national year-on-year increase of 22.5 percent, and most foreign and domestic investors are seeking to expand production.

At HCM City IPs, according to real estate service consultant Colliers International, at the end of 2017 the average annual rent was 142.2 USD per square metre, an increase of 0.9 percent from the previous year.

HCM City now has 20 operating IPs with a total area of 3,025 hectares. Cu Chi district has the largest number of industrial parks totally measuring 863 hectares, but the price is lowest there at 80-90 USD per square metre.

By 2025 it is expected that more 2,300ha in eight new industrial parks will come into the market with a promise of better infrastructure and services.

From now through 2025 rents are expected to increase sharply.

Authorities around the country continue to offer incentives to promote supporting industries.

The HCM City science and technology department has set up a database for all enterprises in supporting industries, including foreign companies, for easy connection and technology transfer.

Around 200 hectares in the Hiep Phuoc and Le Minh Xuan 3 Industrial Parks will be earmarked for supporting industries.

Hanoi has 11 industrial parks with 2,700 hectares, mostly in outlying districts.

Rents in Hanoi’s IPs increased more than in HCM City in 2017 with an occupation rate of 82.6 percent, 5.3 percentage points higher than the year before.

By 2020, Hanoi will have 14 more IPs with 6,100 hectares in operation.

“With a business-friendly environment and high demand from customers, we hope the trend will continue through 2018,” David Jackson, General Director of Colliers International Vietnam, told the Thoi bao Kinh te Vietnam (Vietnam Economic Times) newspaper.

“Hanoi is a good location close to northern industrial centres like Hai Phong, Hung Yen and Bac Ninh, and this helps the city be the best location for IPs.”

In other cities too, demand for industrial land has increased as many enterprises have expanded their production since the beginning of this year.

For instance, HTMP Ltd signed a contract with TNI Holdings Vietnam to expand its production at the Quang Minh Industrial Park, Japanese automobile parts maker Toyoda Gosei started construction of a new plant in Tien Hai Viglacera Industrial Park in the northern province of Thai Binh.

Industrial production has recovered and is expected to expand, and the occupancy ratio at industrial parks has significantly increased, especially this year.