Industrial land on high demand

The strong demand for industrial land has pushed up land rents at industrial parks in southern Vietnam, which averaged US$120 per square meter in the first quarter of the year, up 9% year-on-year.

In its report on the industrial real estate market, the property consulting firm JLL attributed the land rent hike to a new wave of foreign direct investment into Vietnam after the country reopened its economy and enterprises showed a higher demand for expansion.

Meanwhile, real estate service provider Colliers Vietnam said the average industrial land rent in HCMC alone reached US$190 per square meter and the occupancy rate hit 90% in the January-March period.

Over the past few years, land rents in the industrial parks in the southern part of the country have grown 8%-9% per year. Many industrial parks in HCMC have run out of land for lease, paving the way for neighbouring provinces such as Binh Duong, Long An and Dong Nai to attract more investors.

According to a report on Vietnam’s industrial highlights by Savills Vietnam, industrial parks reported the most positive growth in the real estate market during the Covid-19 pandemic, with rents and occupancy rates leaping in the first quarter.

John Campbell, associate director of industrial services at Savills Vietnam, said after Vietnam reopened international air services, investors could travel to Vietnam to see projects, sign contracts, establish manufacturing facilities and file for investment certificates, which has fuelled the demand of industrial land, warehouses and workshops.