With expectations for a breakthrough and more sustainable development in 2022, the operation of the industrial real estate market in the Northern key economic region continues to show stability.
BEIJING: BIG POINT OF SUPPLY
The pandemic has caused many difficulties for industrial production in the third quarter of 2021, especially in localities with many large industrial parks after prolonged periods of social distancing.
According to a report by Savills, industrial production in October 2021 across the country decreased by 1.6% year-on-year, the deepest drop since July, after falling 7.5% in September.
Industrial output fell for 4 consecutive months from July to October 2021, especially in the context of high Covid-19 infections and supply chain disruptions. Despite the challenges posed by the pandemic situation, the occupancy rate of industrial real estate in some provinces in the Northern key economic region has generally remained stable.
The average occupancy rate of the whole area is 87% of the total land area of the industrial park and the leasable area of 20,567ha, up 2.35% over the same period last year. Bac Ninh and Hanoi continue to be the two leading markets in the region.
With 15 projects, Bac Ninh leads the Northern key economic region with a total industrial park area of 5,797 hectares and an average occupancy rate of 99% in 2021. This is also the province with the most approved projects in the first quarter of 2021 with 5 industrial parks about to be implemented.
The most prominent is Que Vo III industrial park with an area of 208.54 hectares with a total investment of 120.9 million USD or Gia Binh II industrial park with an area of 250 hectares with 172.2 million USD of total investment capital.
Hanoi with occupancy rate increased slightly by 1%, reaching 91% with 13 projects and ranked second in the whole region.
Similarly, the supply of factories and warehouses in Bac Ninh also increased 10.2% higher than the whole region at 10.2% compared to the total supply of the whole country. It was followed by Hai Phong with a gain of 7.6%, Hai Duong with an increase of nearly 5% and Thai Nguyen with an increase of 4.6%.
Hai Duong with an increase of 5% over the same period last year made the occupancy rate 86% with 10 projects. Vinh Phuc and Hung Yen are both higher at 88%.
In terms of rents, travel restrictions and relatively stable occupancy rates have resulted in less price escalation compared to 2018-2020.
On average, land rent increased by 9.89% over the same period last year, reaching 100 USD/m2. Prices in Hanoi still occupy the highest position with the price reaching 129 USD/m2.
Other markets saw price increases with Bac Ninh at USD 106/m2, Hai Phong at USD 101/m2 and Hai Duong at USD 79/m2. Hung Yen had the strongest increase, reaching 22% over the same period last year and the price was 101 USD/m2.
According to Mr. John Campbell, Manager of Industrial Real Estate, Savills Vietnam, industrial developers have not been able to rent out as many properties as expected because foreign investors and tenants are unable to visit directly. Continue to visit, select and sign a rental contract for this service. However, in 2021 there will be a large supply of industrial real estate due to the introduction of new industrial zones and projects.
If in 2020, the US-China trade war, free trade agreements (FTAs) have created a wave of multinational companies factory relocation out of China and boosted the Vietnamese economy. The South develops along the value chain.
By 2021, blockades and travel restrictions have slowed the expected relocation of operations from China. However, the developers believe that leasing will be more efficient in 2022. Tenants and investors will also have more options for new supply when many of the distancing orders are lifted.
“Most of the FDI invested in the manufacturing sector in the first nine months of 2021 came from value-added products such as phones, computers and electronic devices. Comparing with FDI capital 10 years ago, Vietnam is developing along a value chain”, emphasized Mr. John.
Quang Ninh "navel" to attract FDI
In terms of FDI, in the first 9 months of this year, the North received the most new registrations in the largest manufacturing sector with USD 3.99 billion (accounting for more than 72.92%), followed by the South with 1 .06 billion USD, accounting for 19.44%, the Central region reached 7.63%, equivalent to 418 million USD.
Considering the FDI capital of the Northern key economic region alone, electrical equipment accounted for 18% while computer and electronic products received 16%.
By the end of the third quarter of 2021, Quang Ninh had the most newly registered FDI capital in the manufacturing industry with US$935 million, accounting for 17% of the total capital.
Following is Vinh Phuc with USD 693 million, accounting for 12.6% and Bac Giang with USD 597 million, or 10.9%. Bac Ninh is in a more modest position with 5.4%.
Mr. Le Huy Dong, Manager of Industrial Real Estate Services, Savills Hanoi, said that the supply in Bac Ninh is not much and newly approved projects are being partially implemented. However, the demand here is still very large with the rental price will increase, approaching the rental price in Hanoi.
Besides, Quang Ninh province is a new bright spot next to Hung Yen, Bac Giang, and Hai Duong. This is an area with a lot of advantages in terms of resources and convenient location. Quang Ninh has both land and sea borders, a deep-sea port and Van Don airport under construction. Moreover, the distance of Quang Ninh from Hanoi will be shortened when the bridges are completed.
One of the attractions of the Northern key economic region lies in its well-developed transport network and prime industrial land supported by the development of many new infrastructures.
In Hanoi, key projects are under construction and expected to be completed in 2022, including ring road 2, metro line 3, road connecting Thuong Cat bridge with national highway 32 and Vinh Tuy bridge (phase 2). ).
With a vision to 2030, the city will expand Noi Bai airport, build more ring roads, metro lines, and add 6 new bridges, making transportation in the city more convenient.
In general, the development potential of industrial zones in the North is very large. According to Mr. Le Huy Dong, although the South is Vietnams economic locomotive, new FDI enterprises in Vietnam will have to consider looking for leased land in the North due to the more reasonable rents and supply. relatively abundant future.