Foreign direct investment (FDI) continued to flow into Viet Nam's industrial property market, accounting for 19 per cent of total FDI or US$3.5 billion during the first nine months of the year, doubling the figure recorded during the same period last year.
Industrial properties will likely see the most growth, according to Savills Viet Nam. Strong economic indicators in recent years have sent foreign investment soaring, especially in the northern and southern economic hubs.
Savills Viet Nam, one of the country's leading property agencies, cited the country's early reopening, multiple free trade agreements (FTA), stable exchange rates in comparison with neighbouring countries, strong export economy, tax cuts and support policies for workers as major encouragements for foreign investors.
Matthew Powell, director of Savills Ha Noi, the agency's northern headquarters, said Viet Nam, in particular its industrial property market, was in a good position to attract additional FDI with a majority of its industrial hubs at full capacity and more projects underway.
In a report released by the agency in September, industrial property supply remained stable with demand soaring, especially in Ha Noi and HCM City. Improved infrastructure and enlarged land allocation have resulted in increased ability to compete but not without a surge in prices.
On average, rental for industrial property in Ha Noi has reached $140 per square metre (sqm), HCM City $200 per sqm. Prices tend to be slightly lower in the two industrial hubs' neighbouring provinces and could be strong alternatives as provincial authorities have distributed more land to industrial projects.
Strong contenders for FDI included Bac Ninh, Hai Phong, Hung Yen and Hai Duong in the north, Binh Duong, Ba Ria-Vung Tau and Long An in the south.
During the second quarter of 2022, nine industrial projects worth a total of VND29.4 trillion ($1.23 billion) with a land area of 2,472 hectares have been given the green light, which have been projected to go into operation during 2023-25.
Powell said rising prices and full capacity in major industrial hubs reflected strong demand in the market, setting the conditions for investors to introduce new products and regulators to improve industry standards. — VNS