Firm foundation set for steady investment influx
Firm foundation set for steady investment influx
Vietnam has become an attractive destination for capital investment flow. CK Tong, CEO of BW Industrial Development JSC, shared his views to VIR’s Bich Ngoc on investment attraction and his company’s readiness to welcome international manufacturers.
What are the biggest challenges that real estate developers like BW Industrial have to face?
CK Tong, CEO, BW Industrial Development JSC
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The demand for industrial real estate in Vietnam has ramped up over the past several months in spite of COVID-19. I am honestly excited because Vietnam has achieved much in combating the pandemic and because of this, a lot of attention is now focused on this country.
As a result many multinational players like us have committed to pouring plenty of cash into Vietnam. We are definitely expecting very intense competition in the year to come.
The market is more active, and it means more competitors are coming. But I think that competition is good. Just like any other business, the challenges will bring out the best in the leadership. BW Industrial Development JSC has always been proud of being the number one player in this business.
This competitive environment and achievement which we have gained reflects how competitive we are. We welcome a good market economy that will further strengthen our achievement so far in Vietnam.
With market becoming more competitive, what are your advantages compared to others in such an environment?
In terms of footprint we have so far 518 hectares of industrial property in all over Vietnam, with 26 projects in 20 strategic locations. We also have a highly-qualified and strong team of around 150 staff located from north to south. They are skillful and experienced both in international business and the local market.
In addition to that, we have a profile of many blue-chip tenants that we have secured. Last but not least, currently we are seeing a lot of completed products which can be ready for tenants and all those things are a strong testament of our achievement in Vietnam.
Has COVID-19 impacted your investment process or expansion plans at all?
The Vietnamese government so far has been good in hindering the pandemic from spreading in the community.
This fact makes manufacturers more confident in the country’s capacity and efficiency and shows why Vietnam is one of the few economies worldwide that will experience positive GDP growth this year.
As a result we are expecting to see tremendous demand for the influx of foreign direct investment (FDI) moving forward whether the situation still continues or not.
I personally expect that the volume of FDI this year could be two or three times higher than that of 2019. That is why we are aggressively sourcing for new opportunities all over Vietnam and ensuring that we are in the position to capture this.
Tenant base and fill rate has been another pleasant surprise. I am happy to say that our leasing efforts in 2020 are actually better than in 2019. I can just imagine once the travel ban is lifted and once the pandemic is under control, results may perhaps even exceed previous efforts.
Among the drivers for growth in the market, including global value chain transition, FDI, and e-commerce, what are you most excited about?
I am excited about all of the above. Vietnam is in a very unique situation in that a few fields of engine are actually taking place concurrently. This is quite different from China where manufacturing occurs, and then consumption picks up and e-commerce follows.
In the case of Vietnam, we have these three things actually happening at the same time, which is great. It just speeds up the growth and the expansion of many areas. Therefore it offers a lot of opportunity for us as well as for our competitors.
It is said that there are few suppliers who are not moving some form of manufacturing out of China to aid diversification. What do you see as expected changes in supply chain strategies from manufacturers and their suppliers?
I am confident to say that what we have been seeing so far is a move up the value chain. In previous years we saw low-value, labour-intensive types of manufacturing coming to Vietnam only, but the situation has changed as we are now seeing more high-tech companies and electronic companies moving here to set up manufacturing bases. As a result, those companies bring about tremendous supporting industries related to them.
An entire industrialisation is involved into a higher value chain and it will automatically bring about upgrades in terms of people skills, then add enough for even a mixed level of investment in the value chain.
The good thing is that this cycle is probably bringing continuous growth for Vietnam for perhaps at least ten years more.
Also, it also creates a very young and productive workforce that helps improve consumption power, then bring in even more attraction for manufacturers who come here not just for export but also bringing more benefits for the local market.
All these elements are going to fill a tremendous growth in demand for industrial space in Vietnam for many years to come.
