Why has Minh Hung Sikico IP allured so many investors?

Why has Minh Hung Sikico IP allured so many investors?

Vietnam is seeing the booming development of industrial real estate, with the strongest activity and tailwinds experienced in 25 years. In this trend, market actors are pondering one question: “How can industrial real estate developers draw in large investors?”

The year 2020 witnessed a strong emergence of southern “industrial hubs” such as Binh Phuoc, Tay Ninh, and Vinh Long thanks to their a vast land fund and competitive rents compared to those in Ho Chi Minh City, Binh Duong, and Long An.

Seeing a lot of opportunities, localities and industrial parks (IPs) must carefully prepare policies, infrastructure, and services to welcome foreign investors who have strict requirements and stringent appraisal procedures.

Well-planned clean land, synchronous connection, and regulatory transparency

Currently, the land fund in more established industrial hubs such as Bac Ninh and Hung Yen in the north and Ho Chi Minh City, Binh Duong, and Dong Nai in the south is shrinking and rentals are rising. This scarcity is creating great difficulties for investors looking for large land plots to match their production scale.

In particular, when deciding to relocate their production facilities to Vietnam, big investors will not come alone – they will bring their entire supply chain ecosystem in tow. Taking Samsung as an example, the investment shift of this "queen bee" has brought hundreds of foreign suppliers to Vietnam.

Therefore, industrial park developers must have a large, well-planned, and seamless land fund to accommodate a variety of industries and embrace the ecosystem that goes with leading investors.

Moreover, these investors, when entering the Vietnamese market, have a long-term vision. Thus, expansibility is another requirement for land banks to accommodate future expansion plans.

Therefore, new IPs which lie not too far from the centres, have a large seamless land fund, and offer many different options are basking in the attention of investors.

Recently, Japfa Comfeed Vietnam – a member of Singapore-based Japfa Limited –has decided to invest in Minh Hung Sikico Industrial Park in the southern province of Binh Phuoc. The project will construct a series of animal and fish feed production factories and farms, as well as pork and poultry slaughtering and processing facilities, costing more than VND5.3 trillion ($230 million). As a new industrial park (opening for investors in the first quarter of 2021with a large land fund in the first phase (655 hectares), Minh Hung Sikico IP easily meets Japfa's demand for large coherent land for building adjacent factories in the early phase.

The perspective of Minh Hung Sikico Industrial Park

Along with the abundant land fund, the ability to accommodate different industries like clean industries, supporting industries, and supporting waste- and wastewater-generating industries to meet environmental standards is creating competitive advantages for Minh Hung Sikico IP to become the No.1 priority for investors seeking for a destination for their supply chain.

With the advantages of large land funds, infrastructure, especially the wastewater treatment system with a capacity of 25,000 cubic metres a day for phase 1, many healthcare equipment (gloves) investors are looking for land in Minh Hung Sikico IP to quickly build factories to serve the growing export demands during COVID-19.

Besides, a complete legal status and a separate ownership certificate for each land plot are also advantages Minh Hung Sikico IP offers over its peers. Tenants will easily find solutions of financial leverage and ease off pressures on an investment fund.

Support from the developer

What concern investors most when deciding to invest in a new locality are the legal corridor, the time to complete administrative procedures, worker recruitment, and vendor/supplier availability. Investors not advised by knowledgeable experts will encounter many difficulties and see project timelines extended significantly.

Tenants are supported by the “one-stop service” of Minh Hung Sikico

Understanding these concerns, when investing in Minh Hung Sikico IP, tenants will receive ample support to quickly complete all procedures to apply for investment certificates, business registration licenses, and corporate seals under a “one-stop shop” mechanism. As a bridge between tenants and local authorities, the developer supports investors from the very beginning of business operations to quickly resolve operating difficulties.

Supportive local policies

Despite their optimistic views on the Vietnamese investment environment, global corporations are still concerned about some risks. At a dialogue between the Vietnamese government with Japanese businesses on December 21, a number of shortcomings, especially prolonged administrative procedures and complicated tax policies, were raised. Some projects had to wait more than one year to receive investment registration and land use-right certificates. The time was even longer if projects were licensed by central authorities.

Therefore, besides the efforts of the IP developer, the dynamism of the local government is another pivotal factor to successfully attract investment flows. Among them, Binh Phuoc province is one of the “rising stars” of FDI inflows thanks to breakthrough administrative reforms and many tax incentives for businesses.

With the motto “The success of the business is also the success of the province”, the government of Binh Phuoc is making efforts to reduce the time for handling administrative procedures and apply the interconnected one-stop service to receive and lodge applications and procedures at the public administrative centres, reducing the time required for approval by a third.

Tenants in Binh Phuoc province-based IPs are also offered tax incentives. For example, a corporate income tax of 17 per cent for 15 years is applicable from the time the first revenue is generated, along with a tax exemption for two years from the time the business becomes profitable, followed by a preferential tax rate of 8.5 per cent in the next four years. The provincial government also reduced deposit requirements by 25 per cent to ensure project implementation and apply tax exemption and reduction, according to regulations.

Binh Phuoc Investment Promotion Conference on December 23, 2020

As a result of these positive efforts, more investors have chosen Binh Phuoc province as a desirable location for business investment and development. Recently, at the Binh Phuoc Investment Promotion Conference on December 23, in the presence of Standing Deputy Prime Minister Truong Hoa Binh, the Provincial People’s Committee awarded investment registration certificates to 35 companies with 46 projects with a total registered investment of nearly $2 billion. Of these, Minh Hung Sikico IP attracted 11 projects.

With good planning, full legal titles, professional business support, and investment incentives from the province, Minh Hung Sikico IP has become ideal destination for domestic and foreign investors alike.

VIR