Industrial property sector optimistic – EIN Presswire
VIETNAM, February 19 –
A view of the Đình Vũ Industrial Park in the city of Hải Phòng. In 2022 and 2023, the supply of industrial land is expected to increase by more than 7,000 ha for the North and South regions. Photo VNA/VNS Photo
HÀ NỘI — The industrial real estate sector is seen as a bright spot this year, and real estate businesses with industrial parks are expected to benefit from increased demand and rental prices.
According to SSI Securities Inc., public investment in improving infrastructure linking industrial parks is helping to recover demand for leased land in industrial parks.
Infrastructure projects that will create convenient traffic connecting industrial parks include Biên Hòa – Vũng Tàu, Dầu Giây – Phan Thiết, North – South, Thị Vải – Cái Mép port and Gemalink port highway projects.
Cushman and Wakefield, one of the world’s leading real estate services companies, reported that Việt Nam continues to be an attractive destination for industrial real estate investors due to a stable growth rate, a forward-looking economy exports, an increase in free trade agreements, a young workforce, preferential investment policies and strategic location.
With favorable government incentives, competitive labor costs, stable political environment, positive economic outlook and free trade agreements, Việt Nam has also become favored by foreign investors leaving China.
To seize this opportunity, in early 2022, information about the expansion of the land fund was announced by listed companies.
IDICO Corporation – JSC (IDC) aims to complete the entire demining of Hựu Thạnh Industrial Park site in Long An province this year. The industrial park has completed site clearance of over 91% of the total area with 150 hectares ready for lease.
In addition, high land rents in industrial parks will also contribute to the growth of industrial park real estate businesses in the future.
The Société Anonyme Sonadezi Châu Đức experienced a sharp increase in its net income in the fourth quarter of 2021 thanks to the impressive increase in leasable areas and rents.
Its revenue increased by 108.9% year-on-year to VNĐ147.7 billion, mainly due to the leasing of land in industrial parks. Its gross profit margin increased by 24.1 percentage points to 64% thanks to a 10-15% increase in ground rent in the Châu Đức industrial park. As a result, fourth quarter net profit jumped 186.7% year-on-year to VND 68.1 billion.
With an increase of 5% per year in basic land prices applied in Bình Dương this year, more companies expect positive business performance.
According to SSI, the Investment and Industrial Development Corporation can achieve a profit growth rate above 43% from 2022 because it owns a commercial land of 648 hectares in the new city of Bình Dương and residential areas in Bầu. Bang and Mỹ Phước.
In addition, the company also has 590 hectares of space available for lease in industrial parks, reports the Vietnamese news agency.
Meanwhile, the Industrial Development and Investment Corporation’s major joint ventures such as VSIP (it owns 49%) and Warburg Pincus (it owns 30%) are expected to see profit growth due to the recovery in demand for rental of land and facilities starting this year. .
The SSI reported that in 2021, the stock value of listed real estate companies in industrial parks increased by 62 percent, especially small- and mid-cap companies.
Industrial Market 2021
In 2021, Việt Nam Industrial Market was challenged by two waves of COVID-19 in key industrial regions in North and South regions. The supply chain was temporarily disrupted in the third quarter due to various COVID-19 prevention measures.
According to CBRE Việt Nam, the government provided strong support in helping the industrial market maintain a positive overall performance and recover quickly when COVID-19 prevention measures eased in the fourth quarter of 2021.
In the fourth quarter, the average occupancy rates of existing industrial parks in five key industrial cities and provinces in the North (Hà Nội, Bắc Ninh, Hưng Yên, Hải Dương and Hải Phòng) reached 79.3%, up 3 .6 percentage points year-over-year. Likewise, the occupancy rate of four key industrial cities and provinces in the South reached 87.3 percent, up 0.11 percentage points year on year.
Regarding the transactions recorded by CBRE in 2021, the size of land rental transactions varied between 3ha and 40ha, with land sizes generally ranging between 3ha and 5ha. Large transactions with land of 20 to 40 ha have been recorded by tenants in the logistics, electronics and toy manufacturing sectors.
On the industrial side, logistics and electronics have been active with various transactions in the northern and southern regions of Việt Nam.
Additionally, the packaging and solar energy industries in the North, as well as furniture and medical equipment in the South were emerging with an increasing number of closed deals.
Due to improving occupancy rates, average asking rents have remained stable in major cities and industrial provinces despite COVID-19. Industrial parks within a one-hour drive of HCM City and Hà Nội have increased asking rents by 15-32%.
With solid rental demand resulting from the reorientation of the supply chain and the improvement of infrastructure (Trung Lương – Mỹ Thuận, Dầu Giây – Phan Thiết in the South; Vân Đồn – Móng Cái expressway, Ninh Bình – Hải Phòng in the North), the industrial market recorded expansion and entry of new developers.
Foreign developers have expanded their portfolios by acquiring land and assets, joint venture with local developers. On the other hand, powerful local developers can negotiate and acquire land directly from the government.
The performance of warehouses and prefabricated factories remained stable. In new ready-to-use warehouses/factories, asking rents increased by 5-17%, mainly due to better specifications.
In 2022 and 2023, the supply of industrial land is expected to increase by more than 7,000 ha for the North and South regions.
Average asking rents are expected to grow at an annual rate of 4% in both regions due to stronger supply. —VNS