Industrial real estate witnesses robust growth in Q3
Industrial real estate witnesses robust growth in Q3
Vietnam's industrial real estate sector has shown remarkable signs of growth in the third quarter of 2023, with substantial new project launches contributing significantly to the market.
According to the Department of Housing and Real Estate Market Management under the Ministry of Construction, several large-scale projects have now kicked off, including the 500-hectare VSIP II Nghe An, the 900ha VSIP Can Tho, the 282ha VSIP Bac Ninh II, the 250ha Gia Binh II Industrial Park in the northern province of Bac Ninh, and the 410ha Long Thanh High-Tech Industrial Park in the southern province of Dong Nai.
The entry and expansion of multinational corporations in Vietnam, particularly in the industrial manufacturing and processing sector, are significantly contributing to the industrial real estate market.
The first nine months of 2023 alone have seen foreign direct investment (FDI) in this sector exceed $14 billion, a 15.5 per cent on-year increase that accounts for nearly 69.3 per cent of the total registered investment capital.
This surge in FDI has directly impacted the demand for industrial properties, propelling a positive growth trajectory in 2023. Industry surveys by various real estate service organisations indicate a slight up tick in the rental demand and occupancy rates for industrial real estate in the third quarter of 2023.
Occupancy rates in key industrial markets, both in the north and south of Vietnam, have remained robust, hovering around 85-90 per cent across industrial land, factories, and ready-built warehouses.
The transaction rate for industrial land has increased by approximately 5.9 per cent from the previous quarter, cumulatively marking a 20 per cent increase in the first nine months compared to the whole of last year.
Rental prices in industrial parks during Q3/2023 have remained generally stable, with a minor increment compared to Q2.
The average rent for industrial land in top-tier southern markets reached approximately $189 per square metre for the remaining lease term, witnessing a 1 per cent increase from the previous quarter and a notable 13 per cent rise from the same period last year.
This data underlines a buoyant Vietnamese industrial real estate sector, bolstered by increasing foreign investment and a burgeoning manufacturing and processing industry.
