The latest report about industrial real estate by CBRE Vietnam shows that the market has become busy with increased land leasing demand from existing and new investors.

 

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Vietnam has a great opportunity to become a new production center as many foreign investors are considering leaving China because of US-China trade conflicts. Multi-national manufacturers are setting up production bases in other countries as well in order to ease reliance on China.

The new strategy pursued by the manufacturers has prompted investors to develop industrial real estate. Vingroup, well known for its housing projects, has joined the industrial estate market. Its Vingroup Ventures has been renamed Vinhomes IZ which has a new business target – developing industrial real estate projects.

Meanwhile, Hoa Phat Group, a steel manufacturer, has stated it wants to enlarge the IZ in Hung Yen province to 400 hectares. Most recently, Cengroup announced a plan to join the IZ service and logistics market segment.

Large corporations from different business fields have begun injecting money into Industrial Zone projects as they can see great opportunities from an expected FDI wave in Vietnam.

Other real estate developers are seeking opportunities in providing services and developing utility areas in IZs.

Apec Group, for example, is developing a chain of utilities and services in Diem Thuy IZ in Thai Nguyen, including Apec Diem Thuy Center Point.

Covering an area of 28,915 square meters, the area is reserved for groceries, private preschools and other utilities. The investor also plans to build an outdoors sports park, filling station, parking lots and service houses with public utilities.

Analysts believe that after Covid-19, together with the explosion of Vietnam’s real estate market, the development of services in or near IZs for specialists and workers will be an important for IZ sustainable development.

Explaining why it decided to make investments in service and utilities in IZs, a representative of Apec Group said the demand for accommodations and entertainment utilities for workers in IZs will be very high in the future.

However, analysts warned that not all IZs can attract manufacturers. They prefer IZs in advantageous positions, with good infrastructure items.

Bui Nguyen Huyen Trang from Jones Lang Lasalle, said foreign investors are interested in the network of material suppliers, licensing procedures and others. If IZ developers lack good development plans with connections and don’t follow all legal procedures, benefits from other preferences will have have no significance to foreign investors.

Mai Lan 

 

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