Tran Quoc Trung - Deputy director general Department of Economic Zones Management, Ministry of Planning and Investment
There are 374 IZs nationwide with the total area of over 114,000ha. Of these, 280 make up 77,000ha and are already in operation, while 75 based over 29,000ha are paying for land clearance. The average occupancy at working IZs is 73.7 per cent.
Total foreign capital pouring into IZs in the first half of 2020 decreased a little compared to last year. Due to the global health crisis, there were 335 foreign-invested projects pouring a total of $6 billion into IZs, while these figures were 340 and $8.7 billion in 2019.
Additionally, as many as 561 IZs on an area of 201,000ha have been approved to be put into master plans. Of these, 259 will be based on 86,500ha and have yet to be established, capturing 43.1 per cent of total area in master plans. This area is estimated to be enough to welcome the new wave of investment and relocation in the coming years.
The Department of Economic Zones Management will perfect the legal framework for IZ development, strengthen management and innovation, and enhance the efficiency of master plans. IZs will become diversified with such types as ecological industrial parks, supporting IZs, associated IZs, and combined models of IZ and urban area services.
However, IZ infrastructure will have to be improved synchronously to enhance their performance while policies, mechanisms, and management will be perfected to accelerate the efficiency.
David Nardone - Group executive of Industrial and International, WHA Industrial Development
The opportunities in Vietnam are substantial for a host of reasons, including a well-educated labour base, investor-friendly central government and provinces, and improving infrastructure – all with reasonable costs. Thus, WHA is continuing to expand in Vietnam.
Companies are relocating a portion of their manufacturing to access the growing markets of Vietnam and its surroundings, as well as an export base. Business coming from China will be significant to Vietnam, considering the differences in the sizes of the economies.
WHA has a host of initiatives to attract investors to our locations in Vietnam. This includes tapping into our more than 1,000 customer base from Thailand, 80 per cent of whom are in marketing. Rental rates are a supply and demand issue.
In the central province of Nghe An, with a large population and labour base and WHA developing 3,200ha, we will be able to welcome investors for years to come. To improve industrial land access, provinces need to have a one-stop process for developers to apply for the land, environmental, relocation, rental, landfill, and other approvals in a timely and transparent basis. The land acquisition process for IZs need to be streamlined. Provinces need to balance land compensation, relocation, and land rental rates in the context of their overriding investment objectives. Investment leads to economic growth, competitiveness, prosperity, and exports, as well as meaningful employment, and increasingly higher tech and value-added products.
Dang Trong Duc - General director, KTG Industrial
Vietnam is highly appreciated as a promising destination for investors to withdraw from China. The country is the portal connecting to the ASEAN, as well as benefiting from free trade agreements.
With the relocation, demand steps up, supply and land lessen, changing land leasing fees. This also drives investors to develop infrastructure and gadgets to make their IZs more competitive, and bring new experiences and services to investors.
After the pandemic, local businesses should be prepared and willing to catch up with trends and seize opportunities, and industrial property will get hotter via the attention of international investors.
Foreseeing this trend, KTG Industrial provides more selection of high-quality factories to welcome foreign investors. Industry 4.0 combines ready-built factory, warehouse, and 4.0 technology to optimise management, performance, environmental protection, and sustainable development.
These 4.0 factories are designed to be modern and convenient to help businesses reduce costs. Operators and management will be able to keep their fingers on the pulse through the use of virtual reality tech to view inside KTG Industrial’s factories in real-time, anytime. So KTG Industrial applying 4.0 technology at this time, when Vietnam has just controlled the pandemic and other countries are fighting against it, confirms the efforts of KTG Industrial to support local and foreign businesses to overcome the global crisis and expand business scale.
Koen Soenens - General sales and marketing director, DEEP C Industrial Zones
We are aware of the significant jump in rents in industrial real estate. However, the rent of DEEP C’s ready-built factory is based on the market value and driven by market forces such as supply and demand. We have full control of what it takes to run our workshops and warehouses while still striving to create a better experience for our tenants.
While anticipating the arrival of new international manufacturers, DEEP C Industrial Zones has continuously rolled out more land suitable for multiple types of industries. So far, we have expanded our land bank to 3500ha stretching over five industrial zones in Haiphong and Quang Ninh.
Improvement in services and infrastructure are being carried out as well. DEEP C liquid jetties are being upgraded to cater more clients in our petrochemical zones, along with the energy transition by renewable energy projects.
Furthermore, DEEP C has embarked on a new journey towards the digitalisation of industrial properties with smart meter reading and cloud computing.
I am confident about Vietnam’s appeal to giant players despite an uplift in rent. More multinational companies have made their way into Vietnam like Foxconn, Pegatron, GoerTek, to name a few. But Vietnam has a lot more to offer: positive macro-economic fundamentals, open economy with easy access to global market, and a competitive labour force.
Lam Dieu Tam Hieu - Deputy general director, Kizuna JV JSC
The new EU-Vietnam Free Trade Agreement will greatly contribute to Vietnam’s economic picture and create motivation for post-pandemic recovery.
Vietnam’s success with the pandemic will draw in more international companies. This and the foreign capital pouring into manufacturing, will increase demand for industrial property.
Foreign investment in the first half declined, however, we believe the decline is only momentary.
In addition, Vietnam’s good disease control will be a superior factor compared to India and Indonesia so that foreign investors can access the market, especially in the context of some international routes may be resumed in July.
Khanh Nguyen - Senior director of Vietnam Capital Markets, JLL
In recent years, the industrial market has attracted many foreign investors, including newcomers, looking for industrial operating assets and land bank. We also see local real estate developers expanding into the industrial sector.
These investors tend to look for logistics land where they can develop ready-built or built-to-suit warehouses and factories to lease out in established industrial areas.
With the limited supply, some started to look further out, where the market could be immature, leading to insufficient demand for logistics, or infrastructure could be weak.
We expect industrial to remain the hottest real estate sector in Vietnam, with strong demand from foreign investors.