Vietnam’s industrial zones: A vibrant market segment

14:10 | 26/05/2019 Industry

(VEN) - With open and competitive investment attraction policies, (IZs) are expected to remain a fast-growing market segment in Vietnam, according to a recent report by JLL Vietnam on the real estate market in the first quarter of 2019.

a vibrant market segment

Despite a 7.6 percent annual increase in rental prices, the demand for IZ land continues to grow due to the rapid growth of manufacturing industries. In the first quarter of 2019, the average occupancy rate of IZs in the five most dynamic cities of the Northern Key Economic Zone was 72 percent, with Hanoi taking the lead, followed by Bac Ninh and Hung Yen. Among localities in the north, Bac Ninh and Hai Phong are the top foreign direct investment (FDI) attractors. Adequate infrastructure connects these localities with major consumer markets nationwide, and along with improved business support policies by local governments, these localities will remain attractive investment destinations.

JLL Vietnam data show that five major cities and provinces in the north have 9,371ha of industrial land for lease. An additional 13,077ha of industrial land in the five cities and provinces of the Northern Key Economic Zone, including Hai Phong, Bac Ninh, Hung Yen, Hai Duong and Hanoi, are expected to join the IZ market segment.

“Vietnamese IZs have attracted investors from Japan, the Republic of Korea and Hong Kong (China). The growing list of foreign firms moving their manufacturing facilities away from China will enable Vietnamese IZs to attract more foreign investment,” the report says.

Last year, the government promulgated a decree (82/2018/ND-CP) governing the management of industrial and economic zones. Economists believe the decree will provide investors with new opportunities for land ownership, change the way in which IZs are managed and promote stronger growth of the IZ market segment in the future.

Vietnam is forecast to have about 500 IZs totaling 500,000ha by 2020, promising existing and potential investors

opportunities to invest in the industrial real estate market segment.

Quang Loc