In 2022, Vietnam's GDP continuously achieve impressive numbers compared to the highest quarterly GDP figures in the last five years (Q2 GDP reached 7.72% and Q3 reached 13.67%). These numbers reflect Vietnam's extremely good recovery and growth rate after two years of being heavily affected by the Covid-19 epidemic. However, in the fourth quarter of 2022, the GDP index dropped to only 5.92%. This is the scenario that has been predicted before export orders decreased, foreign investment also decreased, the economic situation and world demand did not show clear signs of improvement. For the whole year of 2022, GDP wil grow at 8.02%.

Vietnam's CPI in 2022 increased 3.15% and core inflation at 2.59% compared to the same period of last year. This inflation figure is still within the Government's forecast. However, we can see more thoroughly that the quarterly CPI growth rate in 2022 is increasing continuously, especially the fuel import price index (still increasing by more than 40%). Inflation in Vietnam has a close relationship with money supply. As money supply increases, inflation increases and on the contrary. The policy that Vietnam is applying to fight inflation is to strictly control the money supply, and the credit ceiling is also be used to achieve this goal. On the contrary, it also shows many consequences, it is necessary to have reasonable and flexible fiscal and monetary policies, with a longer-term orientation to continue to control inflation well in 2023 which is still forecasted to be very difficult.

IP rate of Vietnam improved and continuously increased since the beginning of 2022. The highest increase was recorded in the second and third quarters of this year. In the final months of the year, IIP still increased, but the number tended to decrease. Especially, IIP in December only increased 0.2% compared to November. The manufacturing and processing industry still record a high increase in IIP compared to other industries, but the general trend decreased gradually in the last months of the year.

According to our survey on the internal traffic infrastructure of nearly 400 industrial parks across the country, the construction of some roads around the industrial parks has basically met the design standards of the internal transport infrastructure of the industrial parks. Thereby, the use of 4 lanes on main road and 2 lanes on the secondary road accounts for the majority. Recently put into operation Industrial Parks also have the same size of internal roads. Next is a group of 2-lane main roads and 2-lane secondary roads, mainly in areas that were put into operation before 2010. Other lane groups account for a small percentage. Internal roads in industrial parks are now basically completed with good quality, meet the needs of internal movement in the industrial park, and are quite synchronized with each other, especially in new areas. Along with the basic design in the style of a chessboard, it is convenient and easy to travel in the industrial park.

Nationwide, a total of 411 industrial parks have been put into operation. Based on a survey of 357 IPs, we have synthesized and analyzed factors related to industrial park real estate. The average occupancy rate of industrial parks is over 87%. Besides, warehousing services are also increasingly being promoted. Currently, more than 53% of industrial parks have been providing this type of service and are concentrated in the South.

When dividing Industrial parks into groups 1,2,3 depending on the geographical distance from major cities, found that in the North, mainly industrial parks of group 1 were built because they were mainly located near Hai Phong city, group 2 and group 3 industrial parks are also very diverse. The industrial real estate market in the North in the near future promises to bring a lot more diversity in terms of location, as well as increase the supply of industrial real estate, focusing on attracting investors. Meanwhile, in the South, mainly industrial parks of group 3 will be built a lot, mainly in Long An and Can Tho provinces. And in the Central region, mainly industrial parks of group 3 were built, in provinces such as Binh Thuan, Quang Tri and Quang Nam.

HOUSELINK selects projects with investment capital over two (02) million USD (equivalent to about 48 billion VND) to analyze the type of industrial real estate. Accordingly, we believe that the average capital size and the ratio of land lease projects to factory lease projects are still at a higher rate. But analyzing more deeply about the uptrend, we find that factory rental projects are still maintaining an upward trend from 2021 to now. On the contrary, the rate of land lease projects is tended to decrease, although the capital scale of land lease projects is tending to increase. In 2022, electronics is the leading industry among project industries that rent a lot of factories but also ranked 2nd among project industries that lease construction land.

Recognize electronics as the most newly registered FDI projects. Following are projects in the industry: Plastic-rubbber, metal, logistics, textiles, footwear, etc. It can be seen that in the past time, electronics is in the top 5 prominent industries in all three regions. However, in each region we see a number of different prominent attractive industries, associated with the formation of different supply chains. This is further clarified in the investment supply chain report published by HOUSELINK monthly.

Some of the top investment capital sources of projects in 2022, in addition to the large proportion of DDI capital projects, FDI-China, FDIKorea and FDI-Taiwan is the top 3 sources of investment capital in the Vietnamese market. Positive signals next year will come from Chinese capital investment projects thanks to the relaxation of this country’s anti-epidemic measures after 3 years of applying the Zero Covid policy. However, we are still concerned that after easing, the outbreak will be inevitable, the appearance of new strains or the re-imposition of blockade orders, if any, will have a significant impact on other markets.

Tải bảo cáo

In the second quarter of 2022, the country’s GDP growth is estimated to increase 7.7% compared to Q2/2021 according to the calculations of the General Statistics Office of Vietnam. This is the highest Q2 growth rate in 10 years. In the context that the world situation is still complicated with inflation shock in many countries at the beginning of 2022 and Vietnam is in the first stage of growth after the pandemic, this growth finger is really impressive, showing that the economy is getting thriving. In which, more than 39% contributed to the increase from the Industry and Construction.

In the first 6 months of 2022, IIP in Vietnam increases about 9%, of which the manufacturing industry increases the most by about 10%. The total of the IIP and the manufacturing industry in 2022 are lower than the growth rate of the same period in 2021 and only higher than the rate of 2020, almost equal to the rate of the same period in 2018. Despite maintaining the growth rate from appearing the pandemic, the world’s price fluctuations, rare materials, especially the price of materials increases highly due to Russia-Ukcraine war and China’s Zero-covid policy has restrained the growth of product output.

Some factors directly affect to attracting of investment capital to the industrial park

At the end of 2020, according to GSO’s survey, Vietnam is in a golden population structure. In which, people of working age from 15 years old and above are evenly allocated among regions and the number of workers in the industry and construction tends to grow.

The government prepares to apply many policies to attract and promote investment

Replacing for Decree No. 82/2018/ND-CP on the management of Industrial parks and Economic parks is  Decree No. 35/2022/ND-CP on the management of Industrial parks and Economic parks which is officially effective from July 15^th, 2022. This new decree is expected to help improve the business and investment environment, and reduce administrative formalities for enterprises…

Current status of developing the industrial park infrastructure

According to HOUSELINK’s survey about the internal transportation infrastructure of 277 industrial parks in the country, the construction of some roads around the industrial parks has basically met the design standards of internal transportation infrastructure of industrial parks. Accordingly, using 4 main road lanes and 2 side road lanes accounts for the majority (nearly 70%), especially industrial parks operating from 2003 to 2009 because this is a period that many industrial parks were built and came into operation.

When we delimit the industrial parks in regions according to distance group to the nearest highway, airport, or seaport. The central region is bordered by the sea so the industrial parks are close to the seaport (57.75% of the total of the center’s industrial parks) which is convenient for export-import and trading goods. And in the South, the industrial parks near the seaport also account for 50%. In contrast to the Central, the North’s industrial parks are far from the seaports but near the highways (91.74% of the total of the North’s industrial parks).

According to our survey and research, currently, more than 70% of the industrial parks in the country use electricity from the national power grid with a capacity of 22/110kV. In recent years, industrial parks start to pay attention to the use of renewable electricity from solar and wind power. About 8% of the industrial parks have built solar electricity systems in the area. The construction projects of renewable power factories are being built with a steady frequency every year and more and more factories are installing rooftop solar panels. When the investors especially FDI investors are really interested in the use of renewable electricity and green technology, combined with the State’s policy to achieve net zero emissions by 2050, the industrial parks use renewable power, build wastewater, and waste treatments will contribute to attracting more quality investment capital. Especially, developing eco-industrial parks, and attracting green investment capital are becoming a tendency not only in the world but also in Vietnam. There are 5 industrial parks that are tested to apply the eco-industrial park model with high efficiency in emission reduction, some of the investors of big industrial parks are gradually transferring this eco-industrial park model.

The majority of the industrial parks in the country built water supply systems with a capacity of 10,000-20,000 m³/day (36%). Regarding the wastewater treatment system, most of the parks have a wastewater treatment system with a capacity under 5000m³/day (38%). Particularly in the South, for the industrial parks with a distance of less than 30km compared to Ho Chi Minh City, nearly 45% of the industrial parks have a wastewater treatment capacity of 5,000- 10,000 m³/day.

Currently, most industrial parks have not had any accommodation for workers and experts. This is a serious issue because most of the industrial parks are far from the center, residential districts, and workers’ and experts’ moving is inconvenient. According to our research, about 50% of the total industrial parks in the country have not had accommodation for people working directly in the industrial park. The number of industrial parks with accommodation for workers and experts is at 51% nationwide. Especially the number of industrial parks with accommodation for workers and experts in the North is nearly 53%, in which the industrial parks with a distance of less than 30km compared to big cities are more than 70% of the parks with this social infrastructure, other 2 groups are under 50%. But in the South, about 62% of the industrial parks have accommodation for workers and experts. In, all 3 groups of industrial parks within the distance have a number of accommodations for workers and experts at a high rate. In Central, there are not many industrial parks of this type.

About 62% of the industrial parks in the country have utility services for laborers in the industrial park or near the industrial park. Although building housing for workers and experts in the South and in the Central have not been paid attention to, other social facilities for laborers such as trade centers, supermarkets, markets, hospitals, schools, and banks are infrastructures that are more interested in these 2 regions.  In the central, about 93% of the industrial parks have social utility infrastructures in the industrial park or near these social utility infrastructures. And in the South, this finger is 67%. In general, area of industrial parks in the country, more than 60% of industrial parks have these social utility infrastructures.

In addition, we recognize that 6 industrial parks in the country have a one-stop service, while, in the South, there are 5 industrial parks. This is a new service of the industrial parks providing full supporting service before, during, and after building, installing the factories of the investors and the labors will help the industrial parks in Vietnam increase more competitive ability, especially 2 factors are the most attractive: cheap labor and preferential tax are getting tighter and tighter.

Land leasing prices in the industrial parks

Industrial land for rent is the most popular and oldest developed form of industrial real estate in Industrial Parks in Vietnam. Based on a survey of 258 active industrial parks, we found that 33% of the industrial land banks are leased for less than 50 USD/m2/lease period, and 26% of industrial parks with land leasing prices from 51-70 USD/m2/lease period. Especially in 2021, there have appeared a number of industrial parks with land leasing prices of more than 200 USD/m2/lease period, mainly in the South, although it only accounts for 3%, it also shows that the land rent has increased especially in the Southern Region in the past year.

Nowadays, ready-built factories are very attractive and have an increasing scale of investment capital but mainly towards the projects with a factory scale that is not too large and complicated as well as requires high technology. High-tech ready-built factories are tending to increase in recent years because the State has supporting policies, creating momentum for the development of high-tech industrial parks. However, this ratio is not much, and the fact that currently, high-tech industrial parks in Vietnam have not fully developed yet so they have not attracted many investors. Currently, Vietnam still mainly concentrates on the heavy industry with little high technology requirement so this type of real estate has not increased too fast. The increasing need of investors as well as the focus on the quality of factories of industrial park investors currently contributes to increasing more choices for the investors when referring to the industrial park market in Vietnam.

The new industrial parks in 2022

According to the HOUSELINK data, in the first 6 months of 2022, about 27 new industrial parks are added to the country. In which, the Northern region is added the most with 15 parks, the Southern region is 7 parks and in the Central, there are 5 parks. In both quantity and planning areas, the new industrial parks in the North account for the majority, showing that the supply of provinces in the North is ready to take over new investment capital in the next years.

Status of some investment projects for the industrial park

Real estate of newly registered FDI projects in 2021 and the first 6 months of 2022 was very developed. Whereby, we can see that the trend of warehouse rental was raising both sides in a number of projects and registered investment capital. Especially in 2022, this trend is more and more clearly expressed when the number of warehouse rentals in the first quarter of 2022 raised 132% than the fourth quarter of 2021 and raised 193% over the same period of 2021. In the second quarter of 2022, the number of warehouse rental projects also raised 100% over the same period of 2021. The scale of investment capital of warehouse rental projects was also highly raised when the total registered investment of newly registered FDI projects in 6 months of 2022 up to 93% over the same period of 2021. Meanwhile, land lease projects were, on the contrary, both numbers of projects and investment capital scale were trending decreased.

In the first 6 months of 2022, we concluded that the textile industry was the industry that had many newly registered FDI projects. After that was: Electronic, metal, logistic, footwear,v..v. As we can see, textile was the industry that got much FDI capital in all 3 domains. Especially in central and southern, this was the industry that attract the most projects. And in northern, electronic and logistic was still top industry. This is completely matched with industrial park infrastructure in 3 domains. In Southern, a long time ago, textile was very developing because this was the convergence of many big textile projects, moreover, IPs from southern had a good infrastructure and an abundant number of workers. In northern, factories and warehouse for the logistic industry was very focusing on investment. Moreover, Nothern had a lot of IPs that invested in high-tech infrastructure, import of special electronic materials from China had many advantages in terms of geographical location, and traffic infrastructure had been improved so that it can attract FDI inflows in the electronic industry.

Industrial Parks attract most newly registered FDI projects in the first 6 months of 2022

When analyzed about the top 10 IPs, we conclude that from the beginning of the year until now, the Industrial Parks selection trend of FDI investors was still leaning towards the location of IPs that are convenient in terms of geographical location. When 80% of every industry is adjacent to the route and more than 50% of them only less than 30km from the port/airport/highway.

Tải bảo cáo

The Covid-19 epidemic has greatly affected major economies in the world since it appeared in 2020. And Vietnam’s economy has not escaped this influence of the pandemic. Before the outbreak of the epidemic, in 2018 and 2019 Vietnam’s GDP continuously recorded a good growth rate (7.08% and 7.02% accordingly). In 2020, although the economy also was affected by the Covid-19 epidemic, Vietnam’s GDP still recorded a positive growth rate (2.91 percent), which is a remarkable achievement and effort of the whole country. Vietnam’s economy in 2021 started with the steadfastness thanks to increased demand from developed countries, the Government deploys to accelerate disbursement of public investment and stimulate investment and attract more domestic as well as foreign investment. The economy reached very good GDP growth in the second quarter of 2021 (6.61%).

However, the emergence of the 4th wave of Covid-19 starting from the end of April has taken a heavy toll on the country’s economy, causing serious damage to all economic sectors. Especially, in the third quarter of 2021, when the number of infections in many provinces and cities increased rapidly, the social distancing policy was applied in most major provinces and cities, Vietnam’s GDP in the third quarter of 2021 decreased 6.17% compared to same period of 2020, this is the lowest quarterly growth rate ever recorded from 2018 so far. In 2021, Vietnam’s GDP increased by 2.58% – the lowest growth rate since 2018.

The total value of foreign direct investment into Vietnam in the 12 months of 2021 reached 31.15 billion USD, increased 9.2% over the same period last year. In which, the value of newly registered capital and adjusted capital increased sharply compared to the same period last year, reaching USD 15.25 billion (up 4.1%) and USD 9.01 billion (increased 40.5%).

Continuing the trend from the beginning of 2021, the number of newly granted projects decreased by about 31.1% over the same period last year, but the total value of newly registered capital increased by more than 4.1%. If in the period of Q1 and Q2, although the number of newly granted projects decreased significantly, the newly registered capital increased sharply (> 16% compared to same period of last year), then in the 12 months, the value of newly granted capital increased only 4.1%. This shows that the trend of foreign investors who have registered to invest in large-scale projects still occurs from the beginning of the year to the end of 2021, but due to the complicated development of the Covid-19 epidemic in the third quarter of 2021 so by the end of the year, large-scale projects tend to increase but not as much as before.

Industrial Real Estate Development Status

After conducting a survey on the development status of industrial parks nationwide in 2021, we summarize and analyze the development of industrial parks and export processing zones by geographical region,  including North, Central, South.  In which, the expanded industrial park is counted by us as a separate industrial park, separate from the existing industrial park. Nationwide, a total of 366 Industrial Parks(1) have been put into operation with a total planning area of ​​92,686 hectares.  Through the survey of 355 industrial parks, the average occupancy rate (2) of industrial parks reached 81%.  However, if divided by regions, the occupancy rate of the Industrial Parks of the southern provinces is slightly higher than that of the North and Central regions.  In which, this rate in the Central region is the lowest.  Specifically, in 19 southern provinces and cities, the area of ​​industrial land is more than 45,000 hectares and the occupancy rate of industrial zones in the South reaches the highest average value in the region, with more than 88% of the total area industrial land has been filled.

Meanwhile, industrial land area and occupancy rate of Industrial Parks in the North are only slightly lower with more than 82% of the more than 32,000 hectares of industrial land occupied and this figure in the Northern region.  Central is just over 70% on nearly 15,000 hectares of industrial land, the lowest in the three regions.

Currently in Vietnam, mainly land for lease and ready-built factories are the two main types of industrial real estate. Industrial zones are also gradually diversifying into more industrial real estate products such as houses for experts, housing for workers, and living and dining areas, but not much. The type of ready-built factory has also emerged in recent years when the demand for renting factories is increasing. For the whole country, only 49% of industrial zones have ready-built factory products, and 51% of industrial zones currently do not have this type of industrial real estate. In which, the South has the highest concentration of industrial zones with ready-built factories (61% of IPs have ready-built factories), followed by the North (69% of IPs have ready-built factories, but the number is still less than in the South). ) and the Central region currently very few IPs deploy this type of real estate because in the Central region, currently mainly investors in agriculture and energy, the demand for renting factories is not much.

New industrial zones in 2021

In this section, we focus on analyzing industrial zones with investment policy, investment certificate and planning of 1/2000, 1/500 in 2021 (expanded IP is counted as a new IP). According to HOUSELINK’s data, in 2021, about 57 new Industrial Parks will be added nationwide. In which, the Northern region is added 38 zones, the South has 11 industrial zones added to the planning, while this number in the Central region is 8 zones. Both in quantity and in planned area, the new zones in the North account for the majority, showing that the supply in the Northern provinces is very ready to welcome new investment capital in the coming years.

Current Situation Off New Level FDI Projects in Industrial Parks In 2021

In 2021, there will be more than 500 new FDI projects with factories and headquarters in industrial zones in Vietnam. Industrial zones in the North in the past year were especially prominent, when more than 46% of newly registered FDI projects in the year chose IPs in the North as destinations, especially 63% of newly registered capital as well poured into industrial zones in the North and of more than 1000ha of registered industrial land, 49% is in the North. It can be said that although in 2021 the North of Vietnam will also be heavily affected by the Covid-19 epidemic, but with a quick recovery and effective Covid prevention strategies, industrial zones in the northern provinces had a quick recovery, attracting a lot of attention from investors.

In the South, we recorded the highest number of newly registered FDI projects in the country (48%) but the scale of the projects was not too large (27% of the total value of registered investment capital and 39% of the total investment capital) registered industrial land area). In the Central region, IPs only attract a small number of newly registered FDI projects with nearly 1 billion USD of total registered investment capital.

Some industrial zones attract many new FDI projects in 2021

Tải bảo cáo

The report provides readers with an overview of the development of the  Industrial Real Estate market, Vietnamese logistics system in the last quarter of 2020. In the report, HOUSELINK researchers also give  analyses about development trends of the logistics system in general and warehouse / logistics centers in particular in the upcoming period.

Opportunities for Vietnam when US-China trade tensions escalate

The tensions between the world’s two largest economies paved the way for the shift of the global supply chain. Many large manufacturing corporations in the world with factories and production lines in China are looking for new destinations to avoid tariff barriers when exporting to the US, while reducing dependence on China.

Vietnam is one of the potential choices of the “giants” in the electronics and textiles industry with stable politics, favorable mechanisms to promote cooperation and foreign investment.. In addition, in the context of the pandemic in 2020, Vietnam will be given more priority due to the good Covid-19 control, and the economy is not frozen.

However, Vietnam’s infrastructure is the lowest among countries that directly compete for capital flows for production and investment shifting such as India, Indonesia, Malaysia, and Thailand. Logistics costs are very high, estimated to be nearly 20% of the country’s GDP. Therefore, investing to change the quality of infrastructure and logistics is Vietnam’s top priority in the current situation.

Foreign businesses take advantage of opportunities to invest heavily in the logistics real estate market

Foreseeing this development trend, more and more domestic and foreign enterprises are investing in the development of warehouse systems / logistics centers in Vietnam. In which there are some outstanding projects such as: GLP joined a venture with SEA Logistic Partners (SLP), invested in the logistics real estate sector, focusing on markets in Hanoi, Ho Chi Minh City and neighboring provinces with a total investment capital up to 1.5 billion USD; LOGOS established a joint venture in Vietnam (Logos Vietnam Logistic Venture) with an initial investment of about US $ 350 million to develop logistics facilities in the areas of Ho Chi Minh City, Hanoi, and Da Nang; GawNP invested in developing a complex project for leasing logistics in Thai Nguyen with an investment value of up to 200 million USD.

Report on Industrial Real Estate Quarter IV / 2020

Following the Report of Industrial Real Estate Quarter III / 2020, HOUSELINK publishes the Quarter IV Industrial Real Estate Report with in-depth perspective on the linkage between industrial real estate and logistics system, detailed analysis of the two-way tie between logistics and manufacturing supply chains.

Report on Industrial Real Estate Quarter IV / 2020 includes the main contents: Current status of the development of the Logistics system and its impact on the development of production activities; Analyzing the existing factory system, forecasting the trend of the development of the Logistics system in general and warehouses, logistics centers in particular.

End

The complicated changing international context, together with the Free Trade Agreements taking effect in 2020, have forced both the Government and enterprises to find a way to increase the competitiveness of Vietnamese national brands in the world. Investment in infrastructure and Logistics is an inevitable direction, bringing long-term benefits to the economy and the manufacturing industry.

Report on Industrial Real Estate Quarter IV / 2020 will be published in January 2021 with two language versions: Vietnamese and English. The report will be sent to 100,000 investors, manufacturers from many countries around the world and the entire community of more than 2,000 members on the HOUSELINK system.

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