Vietnam to see boom in supply of industrial property next year: Savills

Vietnam will see strong growth in industrial property next year due to higher demand for industrial parks as business expand production or relocate out of China, according to Savills Vietnam.

“In the coming years, particularly 2021 and 2022, I think we are going to see a big emphasis on supply,” said John Campbell, Industrial Services, Savills Vietnam.

“This is going to be increasingly pursued by multinational manufacturers as corporations seek to mitigate risk and diversify locations. Vietnam is on the top of many others outside of China and I think this is going to be a big focus for the future.”

In terms of land supply, Dong Nai province is planning eight additional industrial zones (IZs), including four new IZs in Long Thanh and four other IZs in Phuoc Binh, Tan Hiep and Binh An communes, according to the Savills’ Vietnam industrial white paper 2020 released in Hanoi last week.

The largest private conglomerate in Vietnam, Vingroup, plans to invest over 400 million USD in subsidiary Vinhomes IZ. Its first two projects will be in Hai Phong, the Nam Trang Cat Industrial Park (IP) is expected to open in the second quarter of 2021 and the Thuy Nguyen IP in the fourth quarter of 2021.

Also in the fourth quarter of 2021, a 238ha IP of the Kinh Bac City Holdings Company will bring much needed supply to Bac Ninh province. Over the same quarter, TNI Holdings Vietnam will open the 177ha Song Lo 1 IP in Vinh Phuc province.

In southern-based Long An province, TIZCO JSC and Vietnam Innovation Parks Group JSC (VNIP) will open the 1,800ha Viet Phat IP in 2021.

The white paper reported that ready-builds remain under high demand with suppliers reluctant to make long-term land lease commitments or rely on short term contracts. This has resulted in rental developers racing to secure land for expansion.

BW Industrial Development JSC (BWID)’s 10 sites with a total area of over 500ha across eight key cities continue their expansion as Vietnam’s biggest industrial developer of ready-built factories, warehousing and built-to-suit solutions.
Global logistics and warehouse developers have entered despite the ongoing COVID-19 pandemic. Logos Property from Australia has entered with a US$350 million logistics development joint venture.

GLP, the largest warehouse developer in Asia, is planning a US$1.5 billion venture with Vietnam’s SEA Logistics Partners (SLP). Republic of Korean firm Mirae Asset Daewoo Co and Naver Corporation have jointly invested US$37 million into warehousing in the LogisValley logistics hub in Bac Ninh province.

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